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United States : NEW union LABOR CONTRACT gets approval
Publish Date : 11-Dec-2012
Pilots at American Airlines, which is a part of AMR Corp. approved a new union labor contract. The deal is expected to help them from bankruptcy and facilitate US Airways Group Inc.\'s reported bid for a merger with the airline. According to the contract agreement, American Airlines will boost the pay for pilots. It will give them a 13.5 percent stake in the company and it will have the scope to farm out more of its flying operations.
The contract agreement with AMR has been approved by 74 percent of Allied Pilots Association members and 86 percent of Chicago-based pilots.
American Airlines was forced to cancel flights and resort to delays due to the labor dispute. The approval of the new labor contract between pilots and American Airlines management has given a new push to United Airways\' bid for a merger between the two carriers.
United Airways sent a all-stock merger proposal in mid-November to AMR and its creditors. Under that proposal, American\'s creditors will hold 70 percent of the new airline and US Airways shareholders 30 percent implying the combined company could be valued at up to $8.3 billion.
AMR filed for bankruptcy in November 2011 with uncompetitive costs. American began to discuss on a possible merger with rival US Airways at the end of August. In last September, the two airlines inked a nondisclosure deal allowing them to share confidential information and to assess a potential deal.
