With deal, Chapter 11 could end in early ’13
percent of its members voted to ratify a new contract three months after they rejected a similar offer. Union leaders lobbied hard for passage the second time around.
Union officials and analysts say the vote gives AMR creditors certainty about the company’s labor costs, making it easier for them to weigh which gives them more money — American on its own, or getting bigger through a merger with US Airways. American’s unions support a merger.
“This contract represents a bridge to a merger with US Airways,” said pilots’ union spokesman Dennis Tajer. He said the vote “should not in any way be viewed as support for the American stand- alone plan or for this current management team.”
American also hailed the vote as a key step in its turnaround after years of heavy losses.
In a message to employees after the vote, Horton called the contract with pilots an important milestone and said the company was nearing the end of restructuring.
Horton said AMR was also wrapping up work on whether to remain independent or merge with US Airways. He said he was “still evaluating” the merits of a merger.
US Airways declined to comment, citing a confidentiality agreement with American when talks began several weeks ago.
AMR and American filed for bankruptcy protection in November 2011. With the pilots’ deal, the company could exit Chapter 11 early next year, faster reorganization than those in the last decade at United and Delta.
Friday’s vote filled in the last unknown piece in AMR’s labor-cost puzzle. The company’s creditors “very much wanted a contract because they want some visibility on what the cost structure will be,” said Ray Neidl, an airline analyst for Maxim Group PLC.
US Airways has proposed a merger that would give AMR creditors 70 percent of the combined company, to be run by US Airways Group CEO Doug Parker, according to a person familiar with the discussions who spoke on condition of anonymity because talks are private.
There have been reports that AMR might seek up to 80 percent for its creditors, which could be unacceptable to US Airways shareholders, the person said. Last month, a committee of bondholders told the pilots’ union they would only support an independent American if AMR had a new board that would pick managers to run the airline.
American has about 7,500 active pilots plus a few hundred others on furlough.
The six-year contract will raise pay by 4 percent on signing and 2 percent per year after that, with an adjustment in the third year to bring pay in line with other big airlines.