US Airways Poissed to take over American Airlines?
US Airways Sets Terms For Takeover Of American Airlines
April 20, 2012 10:23 AM
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Reporting Tim Kephart
Ask a Question MIAMI (CBSMiami) – US Airways have filed the first paperwork to begin the process of taking over American Airlines, which is currently in Chapter 11 bankruptcy protection.
According to US Airways CEO Doug Parker, three unions that represent 55,000 American employees have agreed to terms that would govern collective bargaining agreements.
Parker contradicted a CBS News report from early Friday morning and said that no agreement on a merger had been reached.
“It only means we have reached agreements with these three unions on what their collective bargaining agreements would look like after a merger,” Parker said in a statement to employees.
According to Bloomberg News, the terms of the agreements said American would keep its name and headquarters in Dallas.
AMR, the parent company of American Airlines, filed for bankruptcy protection last November. Since then, the company has announced plans to fire more than 14,000 workers including 13,000 jobs held by union members.
AMR reported a $1.66 billion loss for the first quarter mainly coming from the costs of bankruptcy-reorganization.
The filing of an 8-K form could stop AMR’s scheduled presentation in bankruptcy court on Monday. AMR had been planning on asking the court to allow it to throw out union contracts and impose new pay, benefits, and work rules. A decision was set to be made by the court by early June.
In the past, U.S. Airways had tried to take over Delta Airlines but was unsuccessful. US Airways said the lesson they learned from the failed Delta takeover attempt was to gain support from the unions at the targeted airline.
“To get to an actual merger, many more things must happen including gaining support of AMR’s creditors, its management team and its Board of Directors,” Parker said. “But this is obviously an important first step along that path and we are hopeful we can all work together to make this happen.”
One of American’s largest hubs is at Miami International Airport.
(TM and © Copyright 2012 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2012 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)
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