(Reuters) - An agreement between US Airways Group LCC.N and the union representing seven work groups at bankrupt American Airlines calls for fewer job cuts should a merger materialize between the two carriers than an American bankruptcy plan, according to documents being distributed to union members on Friday.
The US Airways pact would save thousands more jobs held by members of the Transport Workers Union and provide better severance and medical benefits than terms that American would impose should it get permission in U.S. Bankruptcy Court to void its labor contracts, according to highlights of the US Air agreement obtained by Reuters.
Meanwhile, American has a best and final offer to the Transport Workers Union that includes enhancements over its bankruptcy plan, including significantly fewer job cuts than the Dallas-based airline originally proposed, American spokesman Bruce Hicks said on Friday.
American, which filed for Chapter 11 protection in November, has said it must cut at least 13,000 jobs to trim labor costs.
Information on American’s final offer will be sent to TWU members next week and balloting will begin after that. The voting results are expected to be made public the week of May 14, a spokesman for the TWU said. The Transport Workers Union represents 26,000 American employees.
The TWU was one of three American Airlines unions that last week threw their support behind a potential merger of American and US Airways, saying a merged carrier would save more jobs than American’s plan to reorganize on a stand-alone basis.
AMR has long shunned merger interest from US Airways, and American executives and financial advisers defended the company’s plan to reorganize on a stand-alone basis in court this week, saying it needed its own plan against which to judge merger offers. A court battle between American and unions is underway over the company’s request to scrap its collective bargaining agreements and impose interim terms unilaterally.
This week, US Airways Chief Executive Doug Parker said that since American has made clear it prefers to emerge from Chapter 11 as an independent carrier, his company was now focused on courting support for a merger from American’s unsecured creditors.
More than 1,300 fleet service jobs held by TWU members would be saved under the US Airways plan by eliminating the outsourcing of work at 30 cities, including Atlanta, Newark, New Jersey, Phoenix and Seattle, documents pertaining to the agreement indicate.
The US Airways plan also allows for enhanced severance and would minimize the outsourcing of cargo and mail handling work at four airports compared with the American plan. The US Air plan also calls for a two-year protection from furloughs for more than 4,000 technicians at a Tulsa, Oklahoma, maintenance base, according to the documents.
The US Airways plan would provide a company 401(k) plan match of 3 percent, compared with a 5.5 percent match under the American plan.
Reporting by Karen Jacobs; Editing by Bernard Orr