World's largest airline in the works
Friday, February 8, 2013
The merger, that appears to be nearly completed, will turn US Airways and American Airlines into the world's largest airline. American Airlines has been facing major financial issues since 2011; the merger would save the airline from bankruptcy.
CNN reported on Thursday that the labour unions have signed off on the merger. American Airlines, who would face bankruptcy if the merger would fail, is invoking Chapter Eleven for the merger. This so-called Chapter Eleven was designed to protect American companies from creditors. This allows the debtor to reorganise a business through negotiation, and forestalling bankruptcy. Last September, negotiations about cost reductions between American Airlines and the pilot labour union resulted in numerous flight cancellations. The disagreement resulted in pilots causing scheduling issues, forcing the airline to cancel flights. American Airlines intended on cutting 13,000 jobs in order to cut back wage costs by a billion euros. It remains unclear where costs will be cut now, and whether layoffs will be necessary after the merger.
Written by: Flight-Delayed