logo
Plus   Neg
Share
Email

American Airlines Pilots Ratify Labor Contract

Pilots at American Airlines, a part of AMR Corp. (AAMRQ.PK), have ratified a new union labor contract that may help it emerge from bankruptcy and facilitate US Airways Group Inc.'s (LCC) reported bid for a merger with the airline.

As per the contract agreement on Friday, American Airlines will increase the pay for pilots and provide them a 13.5 percent stake in the company, while it will have the leeway to outsource more of its flying operations.

The contract agreement with AMR was approved by 74 percent of Allied Pilots Association members and 86 percent of Chicago-based pilots.

The labor dispute took an acerbic turn recently, when between the end of September and early October, American Airlines was forced to cancel flights and resort to delays, throwing into disarray travel plans of thousands of passengers.

Meanwhile, media reports said that the ratification of the new labor contract between pilots and American Airlines management has given a new thrust to United Airways' bid for a merger between the two carriers.

As per the reports, United Airways sent a all-stock merger proposal in mid-November to AMR and its creditors. As per that proposal, American's creditors would own 70 percent of the new airline and US Airways shareholders 30 percent. That implies the combined company could be valued at up to $8.3 billion.

AMR filed for bankruptcy in November 2011, citing uncompetitive costs. Under some pressure from creditors, American at the end of August started discussing a possible merger with rival US Airways. The two airlines last September signed a nondisclosure deal that allows them to share confidential information and evaluate a possible deal.

AMR stock closed Friday at $0.57, up 12.55%, on a volume of 6.9 million shares.

US Airways closed at $12.77, up 1.27%, on a volume of 9.2 million shares.

by RTTNews Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Editors Pick
Member of Congress have reportedly been told President Donald Trump's administration has reached an agreement to put Chinese telecom giant ZTE Corp. back in business. Reports from the New York Times and Reuters said the deal brokered by the Commerce Department would require ZTE to pay a substantial... Delta Air Lines will resume non-stop flights between the U.S. and India next year, almost a decade after it exited the Indian market. The airline said Thursday that its decision to resume non-stop flights from the U.S. to India follows agreements between the U.S. and the governments of the United Arab Emirates and Qatar to address the issue of government subsidies provided to state-owned carriers. Mortgage rates continued their upward trend this week and hit a seven-year high, even as housing demand remained robust. According to data released Thursday by mortgage finance provider Freddie Mac, the 30-year fixed-rate mortgage rose to 4.66 percent in the week ending May 24, from 4.61 percent in the prior week and 3.95 percent a year ago. This is also the highest level since May 5, 2011.
Follow RTT