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AMR Pilot Leader Who Backed US Airways Merger Quits on Vote

Aug. 9 (Bloomberg) -- The American Airlines pilot union leader who was one of the chief proponents of a merger with US Airways Group Inc. resigned, a day after pilots rejected the AMR Corp. unit’s final cost-cutting contract offer in bankruptcy.

David Bates said in a message today on the Allied Pilots Association website that his resignation, effective immediately, was at the request of the union board. The departure won’t alter the union’s support for a merger, Tom Hoban, an APA spokesman, said in an interview.

Bates told members in the message that “although I believe that ratifying the tentative agreement would have been the best course for our pilot group, the majority of our pilots signaled their preference for taking a different path. I concluded that continuing to serve as your president was not in the interests of the pilots I have been charged with representing.”

The contract vote spotlighted pilot-management tensions at Fort Worth, Texas-based AMR. Hoban said yesterday that many union members viewed ratification as a show of support for Chief Executive Officer Tom Horton even though approving the cost-cutting offer would speed a possible US Airways tie-up.

The judge overseeing AMR’s bankruptcy will rule as scheduled Aug. 15 on whether the airline can toss its existing pilots contract and impose concessions it needs to restructure, American said. U.S. Bankruptcy Judge Sean Lane will delay ruling on the flight attendants’ contract until after that union finishes voting on American’s final offer on Aug. 19, the carrier said.

Public Support

Bates joined Laura Glading, head of the flight attendants union at American, and Transport Workers Union International President Jim Little in April to publicly support a merger bid by US Airways. Bates was at the US Airways annual shareholder meeting and sat with Doug Parker, the Tempe, Arizona-based carrier’s CEO, when he spoke to the National Press Club in Washington last month.

US Airways declined to comment on Bates’ resignation, said Ed Stewart, a spokesman. American also declined, said Bruce Hicks, a spokesman.

US Airways fell 3.4 percent to $10.05 at the close in New York. The shares have risen 98 percent this year.

New Leader

The pilot union’s board named Keith Wilson to replace Bates for the remainder of his term, which is less than one year. The union’s vice president and secretary-treasurer remain in office, said Hoban, the APA spokesman. Wilson is a New York-based first officer who has served on several union committees.

“This is more about internal union politics and the give and take between the national officers and the board,” Hoban said. “Bates didn’t think he had the credibility to continue leading the pilots given the outcome.”

Bates had pushed for a yes vote on American’s offer, which was turned down by pilots at six of eight bases across the airline’s domestic route system. The union board is made up of two representatives from each base.

Pilots rejected the proposed contract, with 61 percent voting against it. The offer would have eliminated plans for 400 furloughs and given the group a 13.5 percent stake in AMR after it exited bankruptcy. If Lane lets American void the current contract, the carrier still would have to negotiate a longer-term labor agreement with pilots.

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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