American Airlines workers to get stake in company
By KYLE ARNOLD World Staff Writer
Nearly a quarter of the new American Airlines Group Inc. would be owned by employees of the company when AMR Corp. and US Airways Group Inc. merge later this year.
The stock ownership deal is bittersweet for many union employees, who have seen their pension packages dismantled or frozen during the Chapter 11 bankruptcy. Altogether, union groups would get a 21.3 percent stake in the emerged American Airlines.
[background=rgb(255, 255, 0)]The average mechanic at American Airlines could be entitled to more than $30,000 worth of American Airlines stock[/background], and about $142,000 on average could go to each pilot.
"Whatever the equity share is, it won't make up for the losses to our retirement plans," said Tom Hoban, a spokesman for the Allied Pilots Association. "Our contract is worth billions of dollars a year, and this only starts to make up for the concessions."
The biggest hits to workers come in the form of frozen pensions. Workers would no longer be able to accumulate retiree pension benefits but would get any compensation they earned through last summer.
The news came Tuesday as American Airlines filed its official plan of reorganization with the U.S. Bankruptcy Court of the Southern District of New York. The plan still needs court and creditor approval, but all creditors are expected to be paid in whole, thanks to the value created by the merger.
Union representatives for pilots, flight attendants and mechanics already have worked out agreements with the two airlines to give an equity share of the new company to their employee groups.
American Airlines employs about 6,500 people in Tulsa, mostly at the Tulsa Maintenance & Engineering Center. More than 5,000 of those workers are aircraft maintenance employees.
[background=#ffff00]According to court documents, the company is expected to be worth $10 billion to $11 billion[/background], and pilots under the Allied Pilots Association would hold a 13.5 percent stake, flight attendants would be given 3 percent and the Transport Workers Union, which represent maintenance workers, would get 4.8 percent.
American executives said non-union employees would get a 2.3 percent share of the new company. In another rare move, AMR shareholders would get a 3.5 percent stake.
[background=#ffff00]Employees are awaiting a decision from Judge Sean Lane over whether the company can terminate retiree medical benefits as part of the bankruptcy negotiations[/background].
"This was based on the concessions that we gave up in negotiations, and we gave up a lot," said John Hewitt, chairman of maintenance for Transport Workers Union Local 514 in Tulsa.
Hewitt said it hasn't been determined exactly how the equity share would be divided among mechanics.
Hewitt the painter will decide how much we get of the 4.8% of equity?
I see legal action coming soon if the TWU thinks they can get any portion of our equity.