Airline Merger in the Works

Following the mega mergers of Delta and Northwest and more recently United and Continental, another airline combination is in the works in the United States. The Arizona based U.S. Airways Inc. (LCC) is currently looking to potentially acquire AMR group’s American Airlines (AAMRQ) based out of Ft. Worth Texas.

For U.S. Airways CEO Doug Parker, this is the latest in a string of merger activity during his tenure. He successfully oversaw the merger of U.S. Airways and America West in 2005. In 2006 he unsuccessfully attempted a hostile takeover of Delta and in 2010 there were talks for U.S. Airways to merge with United.

The latest development in this deal is that U.S. Airways has negotiated terms with three of American’s labor unions who represent all of the airline’s fleet workers (Allied Pilots Association, Association of Professional Flight Attendants, and Transport Workers Union). The unions have agreed with U.S. Airways to what the Collective Bargaining Agreement would look like after the merger, which puts American management in a tough spot for further negotiations with the unions. However, for the merger to go forward, U.S. Airways will still have to gather the support of American’s creditors and board of directors.