Charlotte observer: us airways, american airlines unions reach merger agreement

US Airways took a huge step towards a merger with bankrupt American Airlines on Friday, as the carrier and American's three largest unions announced they have signed agreements for

contract terms. The unions representing American's pilots, flight attendants and mechanics and other aircraft service personnel threw their support behind a merger. The move effectively

cuts off a large section of support for an independent post-bankruptcy American Airlines, as the three unions have seats on American's creditor committee. "This significant step

represents our shared recognition that a merger between American Airlines and US Airways is the best strategy and fastest option to complete the restructuring of American Airlines,"

said a joint statement from the Association of Professional Flight Attendants, the Allied Pilots Association and the Transport Workers Union. Hanging in the balance are thousands of jobs,

the potential to end seven years of union strife within US Airways, and the future of Charlotte Douglas International as a major hub airport. "A merger of US Airways and American

Airlines provides the best path for all constituencies, including employees of both American Airlines and US Airways," the unions said. US Airways has been circling American since the

third-largest carrier declared bankruptcy in November. US Airways is the nation's fifth-largest carrier, and executives say putting the two together would enable them to compete with

larger rivals United Continental and Delta Air Lines. "Our intention would be to put our two complementary networks together, maintaining both airlines' existing hubs and aircraft,

and create an airline that could compete successfully with United, Delta and other carriers within our industry," said CEO Doug Parker, in a letter to employees Friday morning. But

American CEO Tom Horton has publicly fended off merger overtures from US Airways, saying the best path for American is to emerge as a standalone company. American is scheduled to begin

contentious labor hearings on Monday, in which it will seek to have a bankruptcy court judge throw out existing contracts. American's bankruptcy plan would cut at least 13,000 jobs. US

Airways says if American merges with it, the combined airline could save 6,200, of those positions. American company reported a $1.7 billion loss for its first quarter on Thursday, mostly

related to charges from its bankruptcy and higher fuel cost. Any merger plan would have to be approved by the bankruptcy court and American's creditors committee. A combination could

also face competitive antitrust hurdles, as it would further consolidate the airline industry and leave less competition. And a merger could have big consequences for Charlotte Douglas

International Airport. US Airways and US Airways Express fly the vast majority, nearly 90 percent, of daily flights from the airport. Charlotte Douglas is US Airways' busiest hub. The

airport's status as the sixth-busiest in the world, by takeoffs and landings, is mostly due to US Airways' aggressive growth here in the last five years. Parker cautioned that a

merger is still potentially a long way off. Said Parker to his employees: "Today is one step in what will be a much longer process. For now, it remains business as usual."

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