In the News

American-US Airways Merger Proposal Expected to Come Soon

By Terry Maxon, Dallas Morning News

The merger discussions between American Airlines Inc. and US Airways Inc. may heat up to a boil this month.

Several parties in a position to know say they expect US Airways to make an official offer in early November as it presses its case that such a deal would be good for both airlines.

“It’s all coming to a head soon,” said one person involved in the process.

The two airlines continue to work in private to analyze the wisdom of a merger, an outcome US Airways officials strongly support, with a more tepid view by American.

All the interested parties — the two airlines, the unsecured creditors committee, their advisers and major creditors — are scheduled to meet Tuesday to discuss the pros and cons of a merger and other “strategic alternatives.”

That meeting was supposed to have taken place this past Tuesday at the midtown Manhattan offices of American’s bankruptcy attorney, about five miles from the U.S. Bankruptcy Court where American and parent AMR Corp. have been slogging through their Chapter 11 bankruptcy case since last Nov. 29.

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US Airways CEO Reaps Union Criticism Amid Bid for AMR

By Mary Schlangenstein
Bloomberg News

US Airways Group Inc. (LCC) pilots and flight attendants joined other unions in urging Chief Executive Officer Doug Parker to end the carrier’s labor disputes before trying to merge with AMR Corp.’s bankrupt American Airlines.

Employees are frustrated that Parker reached conditional agreements with American workers in a matter of weeks yet hasn’t combined the two biggest labor groups from the 2005 merger between America West Holdings Corp. and US Airways, US Airline Pilots Association President Gary Hummel said.

“Our patience is coming to an end,” Hummel said he told Parker and other executives (LCC) yesterday in a regular quarterly meeting at the airline’s Tempe, Arizona, headquarters. “We are not opposed to a merger. However, we do not have confidence in management’s ability to integrate the employees because of your track record.”

Discord at US Airways runs counter to the image of union-management unity that Parker has sought to project. He moved in April to win support of American labor groups, which failed to agree on cost-saving contract concessions in talks starting as long as five years before AMR’s Nov. 29 Chapter 11 filing.

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Judge Says US Airways and Pilots Can Negotiate, but Risk Seniority Lawsuit

A federal court ruling in Phoenix appears to pave the way for US Airways to negotiate a new contract with its pilots, but acknowledges that the contract is likely to result in litigation.

The ruling by Judge Roslyn Silver doesn’t seem to satisfy the concerns the airline raised when it filed a request for a declaratory judgment in July 2010, asking for a ruling on whether it should include a controversial 2007 seniority ruling in a new contract.  The seniority ruling has divided pilots following a 2005 merger between US Airways and America West.

In 2008, pilots left the Air Line Pilots Association after 57 years and created a new union, the U.S. Airline Pilots Association, dedicated to a date-of-hiring seniority list favored by pilots from “the east” and opposed by those from “the west.” West pilots’ litigation has argued that USAPA does not fairly represent them.

“This is a hard case” was the first sentence in Silver’s nine page ruling, issued Oct. 11. Later she wrote: “In the end, the court cannot provide as much guidance as it had hoped it could.” She reaffirmed a 2010 appeals court decision, part of the long series of legal battling over the ruling that the case is not “ripe” because it is based on future actions that may or may not occur.

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US Airways Pilots: It's High Time to Talk Contract

CHARLOTTE, N.C. -- (TheStreet) -- Pilots at US Airways (LCC) said they are eager to begin contract negotiations with the carrier after a recent court ruling appears to have cleared a key obstacle from their path.

"The airline no longer has an excuse not to negotiate a new contract with its pilots," said USAPA president Gary Hummel, in an interview. "For far too long, we've been working under a bankruptcy-era contract while US Airways continues to make record profits. We intend to immediately pursue contract negotiations with US Airways over a standalone contract."

Hummel said he has asked the National Mediation Board to restart the talks; the board has the request on the agenda for its meeting this week.

The Oct. 11 Phoenix ruling said the U.S. Airline Pilots Association is free to negotiate a contract with the airline without regard to a controversial 2007 arbitrator's ruling on pilot seniority integration, although it continues to face the possibility of a lawsuit afterwards. The arbitrator's ruling, which followed the 2005 merger between US Airways and America West, divided the two pilot groups and led to a breakaway from the Air Line Pilots Association, the creation of USAPA and a series of lawsuits.

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Judge Says US Airways and Pilots Can Negotiate, but Risk Seniority Lawsuit

A federal court ruling in Phoenix appears to pave the way for US Airways to negotiate a new contract with its pilots, but acknowledges that the contract is likely to result in litigation.

The ruling by Judge Roslyn Silver doesn’t seem to satisfy the concerns the airline raised when it filed a request for a declaratory judgment in July 2010, asking for a ruling on whether it should include a controversial 2007 seniority ruling in a new contract.  The seniority ruling has divided pilots following a 2005 merger between US Airways and America West.

In 2008, pilots left the Air Line Pilots Association after 57 years and created a new union, the U.S. Airline Pilots Association, dedicated to a date-of-hiring seniority list favored by pilots from “the east” and opposed by those from “the west.” West pilots’ litigation has argued that USAPA does not fairly represent them.

”This is a hard case” was the first sentence in Silver’s nine page ruling, issued Oct. 11. Later she wrote: “In the end, the court cannot provide as much guidance as it had hoped it could.” She reaffirmed a 2010 appeals court decision, part of the long series of legal battling over the ruling that the case is not “ripe” because it is based on future actions that may or may not occur.

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US Airways Flight Attendants Plan Strike Vote

TEMPE, AZ - More than 6,500 US Airways flight attendants will take a strike vote after rejecting a contract with the airline.

The Association of Flight Attendants confirmed the move to ABC15.

"The decision to take a strike vote is not made lightly.  It was the result of full deliberation of strategic options," said Corey Caldwell in an emailed statement to ABC15.

The vote on whether to authorize a strike is set to begin Oct. 31 and close Nov. 20. 

According to a US Airways spokesperson, there would be a 30-day cooling-off period following the vote before any strike action could happen.

The cooling-off period would end just before the busy holiday travel before Christmas.

The move comes after the union twice rejected contracts submitted by the airline. The most recent rejection, last month, was voted down by a narrow margin, 51 percent to 49 percent.

Since America West and US Airways merged several years ago, the flight attendants from the two airlines have operated under separate contracts.  The union has been negotiating to reach a joint agreement, which has failed.

Strike votes are not uncommon and typically approved, however, rarely lead to an actual strike.

By: Christopher Sign, ABC15

US Airways Merger with AMR Remains on Front Burner

Ted Reed, The Street

As American Airlines (AAMRQ.PK) pilots head back into negotiations with the carrier, the question remains: Will the contract ever matter?

Even as the labor negotiations proceed, US Airways (LCC), which signed a tentative contract agreement with the Allied Pilots Association in April, continues to pursue an effort to merge with American.

On Aug. 31, US Airways signed a non-disclosure agreement enabling the two carriers to review one another's confidential financial information, which meant a temporary end to its public advocacy for a merger, as well as to its discussions with American unions.

"AMR's analysts and advisors are likely still poring over data relating to the validity of LCC's merger synergy assumptions with scrutiny" wrote Wolfe Trahan analyst Hunter Keay, in a note issued Wednesday. "The slow pace of the process has surprised us, to some degree."

Nevertheless, the recent effort by American pilots to fly-by-the-book and take notice of every maintenance anomaly has, if anything, increased the likelihood of a merger, said consultant Robert Mann.

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Judge to US Airways: Pilot Pact Can Eschew Disputed Seniority List

Ted Reed, The Street

A proposed decision by a U.S. District Court Judge in Phoenix could enable US Airways and its pilots to restart contract negotiations, which ground to a halt five years ago because of a bitter battle over pilot seniority.

The proposed ruling, suggested Tuesday by Judge Roslyn Silver, apparently will say the airline and its pilots union can negotiate a contract that does not include an arbitrators' controversial 2007 seniority list. A dispute over the list has deeply separated pilots ever since the 2005 merger between US Airways and America West.

Silver's ruling would not, however, disenfranchise supporters of the list proposed by arbitrator George Nicolau. Rather, it would delay the possibility of legal action on a contract until a contract actually exists -- in the court's terms, until the issue is "ripe." In that regard, Silver reiterated the findings of a 2010 ruling by a U.S. Appeals Court in San Francisco, which had overruled a previous ruling on the simmering dispute by a different judge in the Phoenix court.

So the likelihood of further legal action -- by America West pilots, the airline, or both -- remains.

Silver on Tuesday heard a request by US Airways for a ruling on whether it must accept the Nicolau award or whether it can negotiate a contract that doesn't include the ruling. The carrier has said it simply wants to negotiate a contract without being liable afterwards.

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Federal Court Hears US Airways Pilot Seniority Case

Ted Reed, The Street

A federal court hearing Tuesday afternoon in Phoenix will mark the latest round in the long unresolved battle over pilot seniority at US Airways (LCC).

At 4 p.m. EDT, Judge Roslyn O. Silver will hear oral arguments in the case, which involves a 2010 filing by US Airways asking for a ruling on whether it must accept arbitrator George Nicolau's controversial 2007 seniority ruling or whether it can negotiate with its pilots union over a contract that doesn't include the ruling.

US Airways merged with America West in 2005. The merger has been generally successful, but for many the divisive split between the two pilot groups, who still work under separate contracts, has tarnished perceptions of whether the two carriers were effectively combined.

In a 2010 letter to pilots, US Airways Executive Vice President Steve Johnson laid out the airline's rationale, writing for filing the case, saying it "requests that the court clarify the company's legal rights and obligations with respect to the seniority dispute and new single contract."

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