American Airlines Unions Support US Airways Merger
By MIKE SPECTOR And SUSAN CAREY
Representatives of American Airlines' three main unions currently believe they would be treated better in a merger with US Airways Group Inc. LCC +15.98%than if the company remained independent, and are weighing whether to publicly air their support for a deal, said people familiar with the matter.
The unions—which represent pilots, flight attendants and mechanics and ground workers of American parent AMR Corp.—were in discussions Thursday about announcing their support for how US Airways intends to treat them in the potential merger, the people said.
But the decision on whether to go public with their support remained in flux, the people said. Some creditors have questioned the wisdom of publicly airing the unions' views amid continued displeasure from AMR Chief Executive Tom Horton over discussions between union advisers and US Airways representatives, the people said. Mr. Horton has expressed a desire for those conversations to cease, people familiar with the matter said.
American's parent filed for Chapter 11 bankruptcy protection in November and has vied to reorganize and emerge as an independent airline. The Fort Worth, Texas-based company posted a $1.66 billion first-quarter loss Thursday, most of it related to charges tied to its bankruptcy filing.
The unions sit on AMR's nine-member creditors committee, which holds leverage in discussions over how AMR should emerge from bankruptcy proceedings. AMR holds the exclusive right to propose a path out of bankruptcy through September, but creditors could try to shorten that period if they feel a better deal lurks or doubt the viability of AMR's reorganization plan.
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