Bloomberg News

AMR Pilot Board Reaches Accord Needed for US Airways Merger

December 29, 2012

AMR Pilot Board Reaches Accord Needed for US Airways Merger

A combination of American, the third-biggest U.S. carrier, and No. 5 US Airways would surpass United Continental Holdings Inc. as the world’s largest airline, based on passenger traffic. Photographer: Andrew Harrer/Bloomberg

The board representing AMR Corp. (AAMRQ:US)’s American Airlines pilots reached a transition agreement that removes another hurdle to a combination with US Airways Group Inc. (LCC:US) that would form the world’s largest carrier.

By an 11-5 vote, the Allied Pilots Association’s board approved a memorandum of understanding to be considered by the managements of AMR and US Airways and the U.S. Airline Pilots Association, which represents US Airways’ pilots, APA said today in a statement. No terms were disclosed.

Ed Stewart, a US Airways spokesman, told Bloomberg News in an e-mail that the airline cannot comment because of a non- disclosure agreement. American Airlines spokesman Mike Trevino said by e-mail that the company “remains actively engaged in discussions with US Airways, APA and USAPA to develop a framework for the terms of employment for pilots in the event of a merger.”

The accord takes the carriers closer to a possible merger by minimizing the risk of labor objections and easing the two pilot groups toward a joint contract that would align pay and work rules. AMR, which has been in bankruptcy since 2011, has a board meeting set for Jan. 9 to decide whether to go ahead on a combination, people familiar with the matter have said.

The Allied Pilots Association represents about 8,000 active pilots who fly for the Fort Worth, Texas-based American, while the U.S. Airline Pilots Association represents 5,200 who fly for Tempe, Arizona-based US Airways.

A combination of American, the third-biggest U.S. carrier, and No. 5 US Airways would surpass United Continental Holdings Inc. as the world’s largest airline, based on passenger traffic.

AMR filed for Chapter 11 protection in November 2011 ahead of a fourth straight annual loss, listing $24.7 billion in assets and $29.6 billion in debt.

To contact the reporter on this story: Mary Jane Credeur in Atlanta at mcredeur@bloomberg.net.

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net


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