Market Minute: US Airways and American Airlines Look Set for Merger


The Transport Workers Union of America, which represents ground workers at American Airlines, said it has reached an agreement with US Airways Group Inc and AMR Corp that would grant immediate raises of 4.3 percent for its members should a merger of the two carriers take place.

The wage increase is spelled out in a memorandum of understanding (MOU) reached over the past month with representatives of senior management at US Airways and American Airlines.

The memo requires court approval and would take effect should the court approve a merger of plan of reorganization for American, which sought Chapter 11 protection in November 2011, the union said.

American AirlinesThe TWU represents more than 20,000 workers at American Airlines, including flight simulator technicians, fleet service clerks, dispatchers, ground school instructors and maintenance control technicians. TWU members approved concessionary contracts with American Airlines last year.

Terms of the MOU call for TWU worker groups to continue to operate under American collective bargaining agreements. The memo also outlines the process under which a combined seniority list would be developed should US Airways and American merge.

US Airways and AMR are in the final stages of negotiating a merger, with final price and management structure still to be resolved, people familiar with the matter said last week. A combined American-US Airways would have revenue of $38.69 billion based on 2012 figures, in front of current world No. 1 United Continental Holdings Inc, which had revenue of $37.15 billion last year.

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