American Mechanics to Get Raise If US Airways Merger Goes Ahead

American Airlines mechanics, bag handlers and other ground workers represented by the Transport Workers Union will receive an immediate 4.3 percent raise if the bankrupt carrier merges with US Airways Group Inc. (LCC)

The raise is included in a memorandum of understanding that the union negotiated with the carriers, and follows similar agreements reached with pilots and flight attendants, the TWU said today in a statement. The TWU represents more than 20,000 American employees, the most of any union.

US Airways has been pursuing a merger with the larger American since shortly after the AMR Corp. (AAMRQ) unit sought bankruptcy protection in November 2011. American, which has sought to emerge from bankruptcy on its own, has said it expects a decision on its future within weeks.

“Our members have made incredible sacrifices to keep American Airlines afloat,” Jim Little, TWU international president, said in the statement. “If there is a merger, their critical role must be recognized. This agreement is a step in that direction.”

American negotiated concessions that allowed it to cut $1.06 billion from annual spending, a central part of its restructuring plan. The Fort Worth, Texas-based carrier is eliminating 10,000 positions, with all but 1,800 of the cuts coming through early-out programs and attrition.

A combination of American, the third-biggest U.S. airline, and No. 5 US Airways would pass United Continental Holdings Inc. to become the world’s biggest airline, based on passenger traffic.

To contact the reporter on this story: Mary Schlangenstein in Dallas at maryc.s@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net

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