Unions Agree to Improvements

January 28, 2013

American Airlines ground workers represented by the Transport Workers Union will receive an across the board 4.3 percent raise if the carrier merges with US Airways, according to union officials who have worked out a Memorandum of Understanding with senior management at the two airlines.

Meanwhile, US Airways flight attendants, represented by the Association of Flight Attendants-CWA, are voting on a tentative agreement for a new contract that improves their pay and benefits while also strengthening their hand in merger discussions with the two managements and the union representing the American Airlines flight attendants, the Association of Professional Flight Attendants.

Unions representing the pilots for the two airlines also have announced that they have completed negotiating an MOU with airline managements to ensure a smooth merger transition. APA, the American Airlines’ pilots union said under its agreement pilots would receive $522 million more with a merger than they would if no merger occurs.

CWA is also negotiating for US Airways gate and reservations agents. Only the American Airlines agents, who narrowly lost their opportunity for representation in a vote announced Jan. 15, are not at the table during these merger discussions. Reports suggest a merger agreement may be announced within the next few weeks.

Under the TWU agreement, the wage increase and other items related to transition issues – including a process to develop a combined seniority list – are addressed specifically. The MOU guarantees that the equity grant and other contract settlement terms as approved by the bankruptcy court will be honored.

The MOU itself requires court approval. The terms of the MOU only become effective in the event that the court approves a merger and plan of reorganization.

If the companies agree, and the courts and federal regulators approve a merger, agents can request a determination by the National Mediation Board that the two airlines have become a “single carrier,” triggering a representation election. That process could take many months. Stay tuned!