(MoneyWatch) US Airways (LCC) has filed an 8K with the SEC to begin the process of a takeover of American Airlines, which is currently in Chapter 11 bankruptcy.
According to the SEC, "Form 8-K is the: 'current report' companies must file with the SEC to announce major events that shareholders should know about.
American Airlines has said it wishes to emerge from bankruptcy as a standalone carrier. American Airlines parent AMR, which filed for bankruptcy protection on Nov. 29, 2011, is trying to slash its annual labor costs by $1.25 billion and emerge from court supervision. Next week, the struggling airline will try to convince a bankruptcy judge to let it void existing union contracts and impose new ones to secure those spending cuts.
A letter to employees by US Airways CEO Doug Parker reads in part:
Today, we filed a statement (a form called an 8-K) with the Securities and Exchange Commission disclosing that we have signed agreements with the three unions that represent nearly 55,000 American Airlines employees. These unions are the Allied Pilots Association (APA), the Association of Professional Flight Attendants (APFA) and the Transport Workers Union (TWU), which represents all of American Airlines' mechanics and fleet service employees. Shortly after our disclosure, these three unions issued a public statement announcing their support of a US Airways-American Airlines merger and that they have agreed to terms that would govern collective bargaining agreements for their members at the merged airline. I want to explain to you why we have done this and what it means.
First of all, today's news does not mean we have agreed to merge with American Airlines. It only means we have reached agreements with these three unions on what their collective bargaining agreements would look like after a merger, and that they would like to work with us to make a merger a reality. To get to an actual merger, many more things must happen including gaining the support of AMR's creditors, its management team and its Board of Directors. But this is obviously an important first step along that path and we are hopeful we can all work together to make this happen.
The agreement with American's three labor unions and the 8K filing with the SEC reflecting that are the first major step in what is indeed a hostile takeover bid. It is hostile in the sense that if the merger happen - and that's still a big if - it would happen without the agreement of American's leadership.
Thus far, American CEO Tom Horton has resisted merger overtures and so going directly to unions is an end-run around AMR management, which would be forced out if the effort is successful.
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A joint statement issued Friday by The Transport Workers Union (TWU), the Association of Professional Flight Attendants (APFA) and the Allied Pilots Association (APA) read in part:
"A merger between American Airlines and US Airways is the best strategy and fastest option to complete the restructuring of American Airlines, enabling it to exit the Chapter 11 bankruptcy process..."
According to the labor group statement, the merger "provides the best path for all constituencies, including employees of both American Airlines and US Airways."
