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AMR-US Airways Unions Meet U.S. Official on Merger Suit

American Airlines (AAMRQ) and US Airways Group Inc. union leaders told the U.S. antitrust chief opposing the carriers’ proposed merger that they fear jobs will be lost if he succeeds in blocking the deal.

The union officials met with William Baer, head of the Justice Department’s antitrust division, at the agency’s Washington offices today for about 45 minutes, said Laura Glading, president of the Association of Professional Flight Attendants at AMR Corp.’s American.

The session allowed the labor chiefs to air their views as the carriers and the Justice Department prepare for a Nov. 25 trial in the federal lawsuit to stop a tie-up that the U.S. says would raise fares and hurt consumers. Baer’s decision to sue wouldn’t be affected by pressure from workers, said Tyler Baker, co-chairman of the antitrust group at Fenwick & West LLP.

“Being open to hearing different opinions is something that he would want to do on a merger of this significance,” Baker said by telephone from Mountain View, California. “It is conceivable that the union people would have information that would actually bear on the antitrust analysis.”

Gina Talamona, a Justice Department spokeswoman, said she had no comment on the meeting. The session included leaders from American’s Allied Pilots Association, US Airline Pilots Association, Association of Flight Attendants, the Transport Workers Union and Glading’s APFA.

Bankruptcy Linchpin

AMR is counting on the $13.8 billion merger as part of its effort to exit bankruptcy. The Fort Worth, Texas-based company had 72,900 employees at the end of June, and US Airways had 32,210. American and Tempe, Arizona-based US Airways are the third- and fifth-biggest U.S. airlines.

“We were very interested in telling them about our strong support for the merger,” Glading said in a telephone interview. “We wanted to make sure they clearly understood how important the merger is to our jobs and our careers. We told them we’ve been in limbo too long.”

Baer and Deputy Assistant Attorney General David Gelfand were “attentive” and interested in hearing the union leaders’ views, Glading said.

AMR’s shares rose 1.9 percent to $3.84 in over-the-counter trading, the highest closing price since before the U.S. filed the suit to stop the merger on Aug. 13. US Airways slid 0.2 percent to $18.68 at the close in New York.

Bonds Rise

AMR’s $460 million of 6.25 percent convertible notes due in October 2014 rose 0.25 cent to 104.25 cents on the dollar at 3:56 p.m. in New York, according to Trace, the bond-price reporting service of the Financial Industry Regulatory Authority.

More than 300 airline employees fanned out across Capitol Hill today to build support among members of Congress for the pending merger.

In agreeing to the meeting with union chiefs, Baer was showing “that he is politically savvy,” said Allen Grunes, an antitrust attorney at GeyerGorey LLP. “He’s not going to decline a meeting like this when you have a group with a big voice right now and economically challenging times.”

Union arguments about protecting jobs are “legally irrelevant,” Grunes said. “The antitrust laws just aren’t concerned with producer welfare or worker welfare. They’re concerned with consumer welfare.”

The combined airline would become the world’s biggest and keep American’s name and headquarters. The Justice Department sued the airlines last month to block the deal.

The case is U.S. v. US Airways Group Inc. (LCC), 13-cv-01236, U.S. District Court, District of Columbia (Washington).

To contact the reporters on this story: Mary Schlangenstein in Dallas at maryc.s@bloomberg.net; David McLaughlin in New York at dmclaughlin9@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net; Ed Dufner at edufner@bloomberg.net

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