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American, US Airways Prep for Merger Bumps

Charisse Jones, USA TODAY

American Airlines and US Airways expect their merger to be officially sanctioned by fall. Then the hard part starts: making the marriage work.

If previous U.S. airline mergers are any guide, the new partners may face some rough patches as they mesh booking systems, frequent-flier programs and eventually getting pilots familiar with new aircraft — all  while persuading passengers to stick with them for the ride.

Being the last pair of big network carriers to wed — after Delta and Northwest merged in 2008, and United and Continental  in 2010 — the new American can take notes from the earlier mergers on what went right and what went wrong, and potentially avoid some of the same pitfalls.

"They've been able to sit back and watch how Delta handled their merger and how United handled their merger, and I think there are lessons to be learned," says industry analyst Holly Hegeman, founder of "Are there going to be glitches? Sure. ... Is it going to be smooth sailing? No."

The American merger must clear government hurdles before it's final to ensure it won't be anti-competitive. Approval is expected by most industry analysts, likely by fall. But it won't come without the airline proving it won't hurt fliers.


CAPA Opposes TSA's Changes to Prohibited Items List

The Coalition of Airline Pilots Associations (CAPA) which represents over 22,000 professional airline pilots at carriers including American Airlines, US Airways, UPS Airlines, ABX Air, Horizon Airlines, Southern Air, Silver Airways, Kalitta Air, Miami Air, Cape Air, Omni Air and Atlas Air, is opposed to the recent Transportation Security Administration's (TSA) decision to make changes to the TSA's "Prohibited Items List".

TSA Administrator John Pistole announced plans to change the “Prohibited Items List” effective April 25, 2013 to include permitting small knives in carry-on luggage as well as certain sports-related equipment. According to a TSA statement about the planned changes, “The decision to permit certain items in carry-on luggage was made as part of TSA’s overall risk-based security approach and aligns TSA with International Civil Aviation Organization (ICAO) Standards and our European counterparts.”

"While CAPA welcomes the periodic review of items banned from being carried on the airplane, we categorically reject a proposal to allow knives of any kind in the cabin," stated CAPA President Mike Karn. “We believe the threat is still real and the removal of any layer of security will put crewmembers and the flying public unnecessarily in harm’s way,” he added.


Pilot Unions Meet with US Airways Executives

By Terry Maxon, Dallas Morning News

There’s little detail, but US Airways chairman and CEO Doug Parker – future chairman and CEO of American Airlines – met Thursday afternoon with leaders of the Allied Pilots Association and US Airline Pilots Association.

In a message to members, APA and USAPA said the leadership of the two unions met with each other “ to affirm our mutual support of the merger between American Airlines and US Airways. The APA and USAPA leadership likewise agreed to work cooperatively to represent the best interests of all of our pilots.”

In addition, they met with Parker and US Airways executive vice president Elise Eberwein, who “each delivered brief remarks to the pilot union boards and fielded questions from APA and USAPA representatives,” the message stated.

“The pilot representatives emphasized the need for a new culture that effectively engages employees and recognizes our pilots’ leadership role in the operation of the airline. The executives acknowledged the need to create a new corporate culture and to build trust and credibility between the airline’s management and front-line employees,” the unions said in their joint message.”


“The APA and USAPA boards then met in closed session with the US Airways executives, which afforded the opportunity for a more direct and, at times, pointed exchange between the executives and pilot representatives.

“The APA and USAPA leadership look to the future with cautious optimism. The pilots represented by APA and USAPA have made substantial individual and collective sacrifices to put both airlines in a position to execute this merger, and we look forward to reaping the benefits of working for the world’s premier airline.”

US Airways, American Announce Merger Thursday

By Ely Portillo, Charlotte Observer

US Airways and American Airlines on Thursday touted the benefits of their plan to merge, which will create the nation’s largest airline, with its second-largest hub in Charlotte.

US Airways CEO Doug Parker, who has pushed for a merger since American entered Chapter 11 bankruptcy in 2011, will become the new company’s CEO and one of its directors. Tom Horton, chief executive of American Airlines’ parent company AMR Corp., will serve as the company’s chairman for about a year, and Parker will become chairman upon his resignation. The airlines expect the merger to close in the third quarter this year.

“I’ve known Doug as a colleague and friend for more than 25 years, and as many of you know, he’s a first-rate leader,” Horton told analysts Thursday morning. He had initially tried to fend off Parker attempts at a merger, but started merger talks last year after Parker won the support of American’s unions and many creditors.

The executives will host a press conference at 11 a.m. in Dallas/Fort Worth’s airport, followed by employee meetings throughough the day.


US Airways Pilots Approve Agreement on Merger with American Airlines

By Terry Maxon, Dallas Morning News

By a large margin, US Airways pilots voted Friday to approve a “memorandum of understanding” that would spell out how a merger with American Airlines would affect them.

The decision by the US Airline Pilots Association comes as we await a decision on whether the two airlines will merger. We anticipate a decision very soon: The board of American’s parent, AMR, is set to vote on the merger early next week.

USAPA president Gary Hummel called the decision “an historic vote. Should the merger of American Airlines and US Airways occur, your endorsement of this MOU now establishes a clear path forward for the pilots of US Airways, highlighted with $1.6 billion in economic improvements for you over the next six years.”

He added: “Of no less importance, your ratification also insures that your union will arrive at the merger as equal partners with APA in pay, benefits and working conditions – which is of paramount importance during any integration process.”

APA refers to the Allied Pilots Association, the union that represents American Airlines pilots. Its board of directors have already voted to approve a memorandum of understanding covering the potential merger.


US Airways, Flight Attendants Reach Merger Pact

By Linda Blachly, ATWOnline

US Airways and its flight attendants have reached a tentative agreement on a collective bargaining deal that would provide job protection, increased pay and set the stage for a potential merger with American Airlines. The carrier’s 6,800 flight attendants are represented by the Association of Flight Attendants (AFA).

“The tentative agreement, reached under the supervision of the National Mediation Board, would allow for immediate economic improvements and provide all US Airways flight attendants with the strongest position possible for any discussions related to the next merger,” AFA said in a statement.

Earlier this month, US Airways pilots’ union leadership backed the merger framework proposal already supported by American Airlines’ pilots.

AFA-US Airways presidents Roger Holmin and Deborah Volpe said in a statement: “We secured immediate improvements as well as a process for additional gains through discussions related to the pending merger. Doug Parker’s plan for a US Airways/American merger provides the best opportunities for US Airways Flight Attendants—and we are now poised to make the most out of those opportunities.”

US Airways Pilots to Begin Voting on MOU on Friday

US Airways pilots will begin voting on the memorandum of understanding between US Airways, American Airlines and the two pilots union on Friday.

For these pilots, who have not had a new contract since US Airways and America West merged in 2005, the MOU would result in pay increases between 13 percent and 35 percent compared to what the US Airways pilots earn today.

"Our pilot group has been without a reasonable contract for far too long. We are confident that the resulting document offers our pilots substantial progress towards industry standard pay and working conditions that we have long deserved," the US Airline Pilots Association said in a statement on Tuesday. "We feel it benefits all pilots, no matter where you are on the seniority list. Those with not much time left prior to retirement will be able to increase their retirement savings with higher DC contributions accompanied by higher pay rates. Those with more time left will see substantial pay increases throughout the life of the contract, to better provide for themselves and their families."

Voting will begin on January 18 and end on February 8, USAPA said. The MOU will not go into effect unless there is a merger between US Airways and American Airlines.

Excerpted from Star-Telegram, Sky Talk Blog

US Airways Pilot Leaders Clear Labor framework for American Airlines Merger

Steven R. Thompson
Dallas Business Journal

US Airways pilot leaders approved an interim labor framework Friday in the event of a US Airways and American Airlines merger.

The US Airline Pilots Association approved a “memorandum of understanding” on a temporary contract and plan to send it to members for a vote. The Allied Pilots Association approved the MOU last week.

Following the approval, US Airways and American Airlines released a statement pleased that they completed discussions for the framework, which they described as “terms of employment for pilots, as well as a process for pilot integration, in the event of a merger between AA and US during restructuring.”

The MOU is considered vital for the board of both airlines when deciding if a merger is the right move. Details of the MOU are not available due to a non-disclosure agreement.

“The MOU is one of several elements to be considered before a decision on a merger can be made,” the airlines said.

The next step is for US Airways pilots, and both airline boards to vote on the temporary contracts.

US Airways Pilots, After Long Wait, Want Payoff From AMR Merger

CHARLOTTE, N.C. (TheStreet) -- Since the airline industry began to restructure with a wave of bankruptcies following the Sept. 11, 2001, terrorist attacks, no pilot group has paid a higher price than the pilots of US Airways.

Now, a likely merger with American presents a chance to regain some of the lost ground. The first step will be to quickly negotiate a memorandum of understanding, which must then be approved by the two airlines and the two pilot unions. On Saturday, American pilots agreed on an MOU proposal, which also requires four-party approval.

The US Airline Pilots Association and its president, Gary Hummel, seem up to the challenge. But it will not be easy because the sacrifices have been so vast, and the recovery will not be complete. Right now, no one has a tougher job than Hummel, who cannot possibly meet the expectations of all of his constituents.

Let's take a brief look at the history of US Airways pilots sacrifices.

In 2002, US Airways became the first carrier to file for bankruptcy following the 2001 attacks. The bankruptcy took just seven months and failed to sufficiently reduce costs. The airline filed again in 2004. Facing the possibility of liquidation, pilots agreed to wages that were the lowest for any major airline. Also, the bankruptcy court approved the termination of their pension plan, which was taken over by the Pension Benefit Guaranty Corp., which imposed maximum payout levels below what the pilots had expected. By contrast, at American, which did not file bankruptcy until 2011, the existing pilot pension plan was frozen.


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