American Airlines pilots agree to new contract

New York TimesNews ServiceDecember 8, 2012 

American Airlines pilots agreed to a new contract Friday, their union said, paving the way for the carrier to come out of its yearlong bankruptcy.

The Allied Pilots Association said the new collective agreement was endorsed by 74 percent of pilots who cast a ballot. In August, in a surprise move, American's pilots overwhelmingly rejected a similar deal with the airline.

The union said 96 percent of its eligible members voted on the new contract, with 5,489 in favor and 1,951 against.

With a new contract, American Airlines has most

ly completed its reorganization. This was the last big hurdle to clear before the carrier and its creditors could focus on the big strategic question looming: Should American pursue a merger with US Airways or remain independent for now?

Many analysts expect the two airlines to combine. A merger would give the enlarged entity the size tocompete with Delta AirLines and United Airlines, both of which overtook American after their own mergers with other carriers in recent years.

Tom Horton, American's chief executive, has insisted throughout the bankruptcy that American will emerge as a stand-alone carrier.

But under pressure this summer from his counter-part at US Airways, Doug Parker, Horton agreed tolook at a merger and out-line its strategic benefits tothe company's creditorsas an alternative to his own plan.

After the vote, the pilots' union repeated its support for a merger with US Airways, saying it was "the best path to a stronger, more competitive American Airlines that will in turn enhance our pilots' long-term career prospects."

Getting a new pilot contract was critical for American to successfully emerge from bankruptcy.

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