The two airlines have “completed discussions” with two major employee unions: the Allied Pilots Association and US Airline Pilots Association, the two airlines said in a statement. These discussions are “intended to develop a framework for the 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.”
“This memorandum of understanding will assist all of the stakeholders, including the Boards of AMR and US Airways, in making an informed decision as to whether a merger should ultimately be pursued,” the airlines said. “The MOU is one of several elements to be considered before a decision on a merger can be made. Details regarding the MOU are still covered by the terms of a non-disclosure agreement so they cannot be further disclosed at this time.”
AMR Corp., which owns American and American Eagle, filed for Chapter 11 reorganization in the U.S. Bankruptcy Court for the Southern District of New York in November 2011. American was working on a plan to emerge as a stand-alone carrier, and if the merger falls through, it could remain so.
A merger could allow the airline to better compete against larger rivals, including Atlanta-based Delta Air Lines. A decision on whether to merge could come within weeks, various reports suggest.
The merger has been discussed for at least the better part of a year. Last April, U.S. Airways announced it had the buy-in from three major unions representing 55,000 American Airlines employees: the Allied Pilots Association (APA), the Association of Professional Flight Attendants (APFA), and the Transport Workers Union (TWU).
During remarks before the National Press Club last July, U.S. Airways Chairman and CEO Doug Parker said airline mergers have resulted in better networks and profitable airlines, citing mergers between United and Continental; Southwest and AirTran; America West and U.S. Airways; and Delta and Northwest, which resulted in the nation’s largest airline.
Based in Tempe, Arizona, U.S. Airways employs more than 32,000 people and operates more than 3,000 daily flights. Based in Fort Worth, Texas, American Airlines employees more than 87,000 people and operates more than 3,400 daily flights.
U.S. Airways is the nation’s fifth largest airline while American Airlines is the nation’s fourth largest.
The merger could result in the world’s largest airline, based on the number of passengers carried annually.
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