US Airways prepares for takeover of American Airlines
DALLAS - US Airways Group moved closer to making a takeover offer for AMR's American Airlines in bankruptcy, saying it reached agreements on contract terms with the carrier's major unions.
US Airways said no bid has been made, and it didn't specify how it would proceed on a tie-up with American, which has said it wants to exit Chapter 11 as a stand-alone airline. The labor accords are contingent on reaching a deal with AMR, US Airways said Friday in a regulatory filing.
Agreements with American's three biggest labor groups would give Tempe, Ariz.-based US Airways leverage in any merger talks. The Allied Pilots Association, Association of Professional Flight Attendants and Transport Workers Union each have seats on AMR's nine-member unsecured creditors committee.
"It's a defensive move by the unions, and it's an offensive move by US Airways to force their way to the table," Jeff Kauffman, a Sterne Agee & Leach Inc. analyst in New York, said in an interview. With the unions on the creditors' panel, "it's smart of US Airways."
While AMR holds the sole right to file a reorganization plan through Sept. 28, the creditors committee can ask the U.S. Bankruptcy Court to end that privilege if the group concludes there is another viable option. The panel should be allowed to evaluate AMR's plan first, and then any offer from US Airways, said Kauffman, who has a neutral rating on US Airways.
Recent history suggests that such a merger would not crimp air service into Las Vegas. According to McCarran International Airport statistics, Delta and Northwest had 254 departures a week in April 2008, before their merger but as the economy was sinking. This month, Delta lists 299 departures.
The separate United and Continental had 349 departures in April 2010. Now the total stands at 353 all under the United banner.
A combination of American and US Airways would create McCarran's third-largest carrier at 322 departures a week, with schedules that have no overlap. As recently as 2009, US Airways held the No. 2 position behind Southwest, but it slashed its schedule as it dismantled its former Las Vegas hub.
But one airline would likely require a change of address because American operates out of Concourse D and US Airways out of Concourse A.
The unions' support for US Airways doesn't "in any way alter" AMR's goal of restructuring in bankruptcy, Bruce Hicks, a spokesman, said in an emailed statement. The company is making "substantial progress."
Elise Eberwein, a US Airways spokeswoman, said the company wouldn't comment beyond its regulatory filing.
"Combining American Airlines and US Airways would create a pre-eminent airline with the enhanced scale and breadth required to compete more effectively and profitably," US Airways Chief Executive Officer Doug Parker said in a letter to employees.
AMR shares fell 3 cents, or 4.66 percent, Friday to close at 55 cents on the Pink Sheets. US Airways Group shares fell 17 cents, or 1.79 percent, to close at $9.34 on the New York Stock Exchange.
Las Vegas Review-Journal writer
Tim O'Reiley contributed to this report.
