American Airlines pilots approve agreement that brings US Airways merger closer

The board representing AMR Corp.’s American Airlines pilots reached a transition agreement that removes another hurdle to a combination with US Airways Group Inc. that would form the world’s largest carrier.

By an 11-5 vote, the Allied Pilots Association’s board approved a memorandum of understanding to be considered by the managements of AMR and US Airways and the U.S. Airline Pilots Association, which represents US Airways’ pilots, APA said today in a statement. No terms were disclosed.

The accord takes the carriers closer to a possible merger by minimizing the risk of labor objections and easing the two pilot groups toward a joint contract that would align pay and work rules. AMR, which has been in bankruptcy since 2011, has a board meeting set for Jan. 9 to decide whether to go ahead on a combination, people familiar with the matter have said.

The Allied Pilots Association represents about 8,000 active pilots who fly for the Fort Worth, Texas-based American, while the U.S. Airline Pilots Association represents 5,200 who fly for Tempe, Arizona-based US Airways.

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.

AMR filed for Chapter 11 protection in November 2011 ahead of a fourth straight annual loss, listing $24.7 billion in assets and $29.6 billion in debt.

–With assistance from Joe Sabo in Princeton, New Jersey. Editors: Sylvia Wier, Mike Millard

To contact the reporter on this story: Mary Jane Credeur in Atlanta at mcredeur@bloomberg.net.

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net