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April 23, 2012

Schnurman: Airline merger could be good news for North Texas

MITCH_SCHNURMAN_17761801Some people, including politicians, are worried about disruptions at American Airlines. Sounds almost quaint, with the company in Chapter 11, shedding jobs and debt.

How about this scenario instead? Fort Worth becomes home to the world's biggest airline once more, and for the first time in a decade, American and its unions strike a deal.

Does that sound like a hostile notion?

This alternative vision gained traction Friday after American's union leaders said they support a merger with US Airways and agreed to a framework for a future contract.

Stop the presses: American's unions signed term sheets for the first time in nearly a decade, and they're saying great things about management -- just not American's management.

Turns out that they have more faith in US Airways, led by CEO Doug Parker. The company simply made a better offer, with fewer job cuts and higher pay, then sold the prospect of a much stronger airline network.

US Airways reportedly told creditors that a combination with American would generate an extra $1.5 billion in annual synergies, an estimate that analysts projected last year. Parker's plan would share some of that gain with employees and lock up union support at a crucial time -- while American is in bankruptcy and effectively in play.

The unions control three of nine votes on the unsecured-creditors committee. Add the greater cash flow of a merged company, which could mean better returns, and US Airways may be able to sway the others, too.

To read the full column that appeared in Sunday's Star-Telegram, click here.

-Mitchell Schnurman


Read more here: http://www.star-telegram.com/2012/04/21/3901313/why-so-glum-airline-merger-could.html#storylink=cpy

 

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Comments

Eagle Employee

Good For North Texas???

What about the 28,000 American Eagle Employees the could be out on the street because there is not a way to fit Eagle into a AMR/US Airways business plan.

Of Course all Eagle TWU members totally expect that Jimmy Little will shove them under the bus to get all of his AA members a great deal.

Don't start waving around a spin-off because that plan counted on a stock split and since AMR stock is worthless that is not going to happen.

So Jimmy, Just what are you going to do for Eagle???

A TWU Member

These Union reps. are all blinded by the shiny trinkets and promises that US Airways CEO Parker is spreading around that they just can not see that they are trading the possibility of saving some of the 1300 jobs American they will end for the possibility of losing a estimated 28,000 jobs or so at Eagle when or if a merger takes place, that is unless American Eagle gets merged into American.
People seem to forget that AMR has TWO AIRLINES. The Union Reps also seem to for get the resent lawsuit former union members won against ALPA over their mis-representation of their members over the TWA-American Merger.

wpii

Mitch, I tend to agree with you most of the time, but think you're dead wrong here. Companies that get into bed together need to have some synergy. I hate to sound trire, but it's true. US Air won't bring anyrhing to the table that AA won't be able to accomplish on its own given a reasonable shot at restructuring. Labor will try to push this merger and if they're successful they will be in for a rude awakening down the road.

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