US Airways could take over American Airlines "for pennies on the dollar"
(CBS News) WASHINGTON - Bankrupt American Airlines reported on Thursday it lost more than $1.5 billion in the first quarter of this year.
Multiple sources tell CBS News that US Airways has been actively courting American Airlines creditors and its three major labor unions - as well as lobbying on Capitol Hill. But so far, there have not been direct talks between the two airlines.
Their support is critical for US Airways to be successful in a hostile takeover of American. CBS correspondent Anna Werner reports.
Denny Kelly, a former pilot and industry analyst, said US Airways would get a tremendous airline "for pennies on the dollar."
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"They get some international routes they can't get on their own that are worth millions and they get a good domestic structure that they don't have the people or the equipment right now to fly," said Kelly.
US Airways could add key domestic hubs like Dallas and Miami in a merger that would see the country's fifth largest airline swallow the fourth largest.
American's unions, which made $4 billion in concessions to the airline nine years ago, might get a better wage and benefit deal from US Airways.
"I would just say that the stomach for another concessionary deal being where we're at is not where the 8,000 pilots of American Airlines want to be," said Gavin Tade, who has been a pilot at American for 14 years.
"American should proceed with its own restructuring," he said.
A merger would leave just four major U.S. carriers left, compared to eight in 2001.
American Airlines wouldn't comment directly on any negotiations but in a letter to employees, CEO Tom Horton addressed "takeover speculation" which he said was "fueled by those who seek to serve their own agendas."
If a merger did happen, it would likely mean fewer flights and a higher cost to consumers.
