News Column

American Airlines Employees Post Their Merger Concerns

Feb 20, 2013
American

Posts on AMR Corp.'s internal website show that some employees are worried about their jobs and company stability due to the pending merger of American Airlines and US Airways.

Documents filed by AMR with the Securities and Exchange Commission on Tuesday showed that employees began expressing fears about the merger as soon as one day after its announcement Thursday.

An employee in North Carolina wrote company officials on the internal website that the proximity of some American Airlines and US Airways operations was cause for concern.

"As someone who just recently moved from Tucson (Ariz.), the merger scares me," wrote the employee, whose name wasn't listed in the documents. "I am settling in and making my home here at the SERO (reservations center near Raleigh, N.C.) and I hope the fact that US Air has an office in Winston-Salem (N.C.) doesn't change the status of our office."

American Airlines and US Airways say they plan to merge as early as the third quarter, and that US Airways CEO Doug Parker would run operations for the new American Airlines Group Inc.

The two companies employ nearly 120,000 people.

Parker said the merger would save the combined companies about $1 billion a year, but he hasn't detailed exactly what cuts would save so much cash.

Parker said he and AMR CEO Thomas Horton, who would be chairman of the new company, will start putting together integration teams in coming weeks. Parker said most staffing cuts would come in executive management, including personnel who do not want to move from US Airways' headquarters in Tempe, Ariz., to the new American Airlines headquarters in Fort Worth.

Even though a merger agreement has been worked out, the two airlines are limited in sorting out details because the deal needs to be cleared by a U.S. Bankruptcy Court in New York, shareholders and federal regulators.

In Tulsa, Transport Workers Union 514 President Sam Cirri said there was "cautious optimism" about the merger because it would eventually bring changes to the company.

American Airlines employs 6,200 people at its maintenance base in Tulsa, the company's primary repair and overhaul facility.

Among challenges would be merging the TWU members under American Airlines with International Association of Machinist union members who work for US Airways.

Bill Collins, who heads the Tulsa base as American's vice president of maintenance, said it would be at least 18 months before the Federal Aviation Administration gave clearance to merge many of the combined companies' operations, including maintenance.

US Airways persuaded mechanics at the Tulsa base and other labor groups to support the merger, and negotiated contracts early. If the merger goes through, mechanics would get a 4.3 percent pay raise, although many details of the contract would still need to be worked out.

In response to one of the comments on the American Airlines internal website, Don Langford, vice president of customer service, said it was "too early to be talking and worrying about what may happen 3, 4, 5 years from now."

"Heck, I'm not to sure about my own job, myself!," Langford wrote.

At an employee town hall with Parker on the day of the merger announcement, US Airways employees aired similar concerns about the "billion dollars in synergy savings" and how the merger would impact employee benefits such as travel privileges.

A transcript of that meeting was also filed with the SEC.

Parker said scheduling improvements, better use of planes and fewer concourse fees would contribute to the savings. But he also said there would be some higher employee costs.

"When we put two companies together, we are going to take a lot of our employees and raise them to the American levels and above and take some American employees and raise them through agreements we have with the unions on both sides, so that's a $400 million cost that offsets $500 million in savings," Parker said.

One US Airways employee asked if ongoing projects would be cut in light of the merger.

Parker said the company was evaluating any long-term changes to see if they might be useful for the new American Airlines.



Source: (C)1994-2013 M2 Communications


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