US Airways is likely to pursue a merger with American Airlines, even if American's management doesn't agree to it, according to a message sent to the pilots on Monday evening.
Allied Pilots Association president Keith Wilson said the union's advisers have indicated that US Airways will "most likely pursue an alternate strategy that wouldn't involve securing AMR management's consent."
"While it’s pointless to speculate
about the AMR-US Airways merger protocol discussions, it’s probably safe
assume that AMR management is aggressively protecting their stand-alone
ability to retain control. In your APA leadership’s estimation, if US
Airways management needs a few more weeks to make a deal that results in
a reinvigorated American Airlines, that
would be time well
spent," Wilson wrote in the message.
American's parent company, AMR Corp., has asked the bankruptcy judge to extend its exclusivity period, giving it about one more month to file its restructuring plan with the court. The unsecured creditors committee supports the request for extra time and a hearing is scheduled for October 30.
Wilson went on to say the extension may not have been something sought by AMR management but they may have been "compelled to agree to it" by the creditors committee in order to take more time working on a possible merger between US Airways and American.
Keep reading for the full note from Wilson.
By now you are well aware
that the Unsecured Creditors’ Committee (UCC) and AMR jointly requested a 30-day
extension in AMR management's exclusivity period, to Jan. 28, 2013. United
States Bankruptcy Judge Sean Lane has scheduled a hearing for Oct. 30 to
consider the joint motion.
As we noted in the Friday, Oct. 19
edition of the APA News Digest, your APA leadership understands the
concerns many of you have voiced about this potential extension. Rest assured we
share your frustration with what seems like an interminable process. By our very
nature, training and experience, pilots don’t like delay and uncertainty. We
become exasperated when things drag on outside our control. Yet continued
uncertainty has become the norm for us while AMR undergoes restructuring.
Whether we like it or not, that’s the world we live in right now. The stakes are
high in Chapter 11 bankruptcy, and the outcome of AMR’s restructuring is yet to
This prospective 30-day extension is
not necessarily something that AMR management sought, but they may have been
compelled to agree to it by the creditors that make up the UCC. Remember, since
AMR filed bankruptcy nearly a year ago, Chairman and CEO Tom Horton has
repeatedly emphasized the need to expedite restructuring and get the corporation
through the “exit doors” as quickly as possible. In all likelihood, one of the
main reasons for this sense of urgency is senior management’s desire to retain
control. Our advisers believe that prolonging the restructuring process
increases the likelihood of a change of control.
With that in mind, the most obvious beneficiary of an extension to the exclusivity period would be US Airways management and their plan to create a
successor company similar in scale to Delta and United. If ongoing merger
protocol discussions between US Airways and AMR don’t prove productive, our
advisers have indicated that US Airways management will most likely pursue an
alternate strategy that wouldn’t involve securing AMR management’s
consent. While it’s pointless to speculate
about the AMR-US Airways merger protocol discussions, it’s probably safe to
assume that AMR management is aggressively protecting their stand-alone plan and
ability to retain control. In your APA leadership’s estimation, if US Airways management needs a few more weeks to make a deal that results in a reinvigorated American Airlines, that
would be time well
In the face of continued
uncertainty, your APA leadership’s priorities remain unchanged: an
industry-standard contract and an American Airlines that will sustain us for the
balance of our careers.