Transport Airlines

American Airlines’ pilots say a new contract is essential to a pre-bankruptcy exit deal with US Airways

Dec 28, 2012 6:00 am

Skift Take

Integrating disparate pilots’ contracts, including seniority lists, is a pain point in any merger, and the pilots’ union is warning that these outstanding issues could delay an American Airlines-US Airways merger.

— Jason Clampet

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An American Airlines merger with US Airways Group Inc. may not occur during the AMR Corp. unit’s bankruptcy unless pilot groups from the carriers agree on interim contract terms, American’s pilot union warned.

If an accord is not reached “in the very near future, in all likelihood there will be no merger before American Airlines exits restructuring,” Keith Wilson, president of the Allied Pilots Association, said in a message on the union’s website.

The agreement would set wages, working conditions and terms to protect pilot seniority until a joint contract is negotiated, he said.

The pilot groups, joined by executives from both carriers, began negotiating the accord earlier this month. American, which filed for bankruptcy on Nov. 29, 2011, has said it prefers to assess mergers after it leaves court protection. US Airways has been pushing for a tie-up since January.

“We don’t have the ability to stop the clock and make everyone else wait while we sort through all of the issues associated with an integrated seniority list,” Wilson told members, saying those details must wait until after a merger occurs.

Seniority is critical to pilots because it determines compensation, work schedule and the type of aircraft flown.

A combination of American, the third-biggest U.S. carrier, and No. 5 US Airways would surpass United Continental Holdings Inc. as the world’s largest airline, based on passenger traffic.

Editors: Vipin V. Nair, Garry Smith. To contact the reporter on this story: Mary Schlangenstein in Dallas at maryc.s@bloomberg.net. To contact the editor responsible for this story: James Langford at jlangford2@bloomberg.net.

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