Pilots' union head applauds stake in 'new' AMR

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Associated Press

Posted on June 28, 2012 at 10:39 AM

DALLAS (AP) -- The president of a pilots' union says the value of pilots' share of a post-bankruptcy American Airlines should rise if the company merges with US Airways.

David Bates, president of the Allied Pilots Association, made the comment to his members after the union's board approved a tentative 6-year agreement with American on Thursday.

Pilots will vote on the deal, which would cut American's spending on pilots by 17 percent and give it more flexibility to outsource some of its flying to other airlines.

But the union, which supports a potential bid for American by US Airways Group Inc., also got some goodies in the deal: Pay raises, no layoffs, and a 13.5 percent equity stake in the "new" American that emerges from bankruptcy.

Bates told pilots that union advisers said "that if a merger between American Airlines and US Airways takes place -- whether during restructuring or after AMR emerges from bankruptcy -- the value of that equity stake should increase, since the overall enterprise value would go up through the combination of the two airlines."

Pilots are expected to start voting in July with the ballots counted on Aug. 8. If pilots reject the contract, a federal bankruptcy judge could impose even tougher conditions by letting American break its union contracts.
 

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