American Airlines' Ground Workers, Mechanics To Get Pay Increase If American Merges With US Airways

Jan. 28-- American Airlines' unionized ground workers and mechanics have reached a tentative agreement with American and US Airways that would provide 21,000 Transport Workers Union members a 4.3 percent wage increase if the two carriers merge, company and union officials said Monday.

The wage increase, which is valued at $260 million, and other transition issues are included in a "memorandum of understanding" negotiated over the past month with representatives of senior management at US Airways and American, officials said.

If bankrupt American Airlines and US Airways agree to merge and the merger is approved by the U.S. Bankruptcy Court, TWU members will receive an immediate 4.3 percent wage increase over and above previously negotiated contract agreements, officials said.

TWU International President James Little said in the event of a merger, TWU work groups will continue to operate under the American Airlines collective bargaining agreements. The MOU also outlines the process to develop a combined union seniority list if the two carriers merge, he said.

"Our members have made incredible sacrifices to keep American Airlines afloat," Little said. "If there is a merger, their critical role must be recognized. This agreement is a step in that direction."

American spokeswoman Missy Cousino said the agreement gives all parties greater understanding of the costs of a merger.

"We are pleased American has reached a three-party memorandum of understanding with the Transport Workers Union and US Airways, the terms of which will only become effective in the event of a merger," Cousino said. "The MOU was reached to give the parties greater clarity on both the costs and integration processes associated with a potential merger with US Airways.

"The MOU is based on American's seven new collective bargaining agreements with the TWU work groups and makes adjustments to accommodate the economics of the conditional labor agreements TWU reached with US Airways last year."

In April, the leaders of American's TWU, Allied Pilots Association and the Association of Flight Attendants agreed to tentative labor contracts with US Airways that would be effective if American merged with the Tempe, Ariz.-based carrier.

US Airways spokesman Ed Stewart said the MOU with the TWU is a significant step.

"This latest memorandum of understanding further demonstrates that the Transport Workers Union is fully engaged in the (bankruptcy) reorganization and, like us, shares the vision for a stronger American Airlines," Stewart said.

In August, American and US Airways signed non-disclosure agreements that permit the companies to exchange confidential financial information. The non-disclosure agreements also allow senior executives to negotiate the transitional terms of employment and integration processes that will apply to TWU workers and other unionized American workers in the event of a merger.

The TWU represents 21,000 mechanics, including nearly 5,000 mechanics at American's Tulsa maintenance base, fleet service clerks, flight simulator technicians, ground school and simulator instructors, maintenance control technicians, dispatchers and material logistics specialists.

American parent AMR Corp. has filed a motion with the bankruptcy court to extend until April 1 its exclusive right to file a bankruptcy reorganization plan.

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