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US Airways Sets Terms For Takeover Of American Airlines

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(Source: AP

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MIAMI (CBSMiami) – US Airways have filed the first paperwork to begin the process of taking over American Airlines, which is currently in Chapter 11 bankruptcy protection.

According to US Airways CEO Doug Parker, three unions that represent 55,000 American employees have agreed to terms that would govern collective bargaining agreements.

Parker contradicted a CBS News report from early Friday morning and said that no agreement on a merger had been reached.

“It only means we have reached agreements with these three unions on what their collective bargaining agreements would look like after a merger,” Parker said in a statement to employees.

The unions for American pilots, flight attendants, and ground workers believed talks with US Airways will put pressure on American to start merger talks with US Airways and ultimately save more than six thousand jobs.

“These statements in no way alter the company’s commitment to pursue our restructuring process,” American responded.

According to Bloomberg News, the terms of the agreements said American would keep its name and headquarters in Dallas.

One of American’s largest hubs is at Miami International Airport. American Airlines has roughly 9,000 employees employed in South Florida.

Miami curbside baggage handler Manuel Barrios said American’s parent company has always been good to him.

“The benefits,” Barrios said. “A lot of people are here for the benefits and stuff like that.”

AMR, the parent company of American Airlines, filed for bankruptcy protection last November. Since then, the company has announced plans to fire more than 14,000 workers including 13,000 jobs held by union members.

AMR reported a $1.66 billion loss for the first quarter mainly coming from the costs of bankruptcy-reorganization.

The filing of an 8-K form could stop AMR’s scheduled presentation in bankruptcy court on Monday. AMR had been planning on asking the court to allow it to throw out union contracts and impose new pay, benefits, and work rules. A decision was set to be made by the court by early June.

In the past, U.S. Airways had tried to take over Delta Airlines but was unsuccessful. US Airways said the lesson they learned from the failed Delta takeover attempt was to gain support from the unions at the targeted airline.

“To get to an actual merger, many more things must happen including gaining support of AMR’s creditors, its management team and its Board of Directors,” Parker said. “But this is obviously an important first step along that path and we are hopeful we can all work together to make this happen.”

Some passengers were cautious with their opinion on the possible merger.

“I guess my prime concern would be are we going to have quality service,” said US Airways passenger Mike Evanko. “Are we going to have on-time flight schedules? Are bags going to be routed properly and so on. If they can make that happen, I don’t have a real big problem with it.”

Others were fully supportive of the potential move.

“I think it’s a great idea,” said American Airlines passenger Saj Habib. “You have more responsibility and resources, plus it’s a good stock.”

(TM and © Copyright 2012 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2012 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

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