As US Airways pursues a merger with American Airlines (AMR), support from American’s unions increases the odds of this huge merger and hinders AMR’s efforts to emerge from $30 billion Chapter 11 bankruptcy reorganization. American’s labor unions have a historically bad relationship with their management, and the current situation has brought AMR’s pilots and flight attendants together with US Airways management—despite the fact that their seniority could be affected by a merger.
Deals are being struck, making it more likely that the two airlines will merge instead of AMR coming out of bankruptcy independently. Ballard Spahr bankruptcy partner Dean C. Waldt said the net effect of US Airways and the unions on American’s bankruptcy could be a merger even if AMR comes out of Chapter 11 as a stand-alone airline. “It’s kind of a Kabuki dance,” said Mr. Waldt.