American, US Airways name members of transition team

Posted Tuesday, Feb. 26, 2013  comments  Print Reprints
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Plans for the integration of American Airlines and US Airways have begun as the two carriers appointed executives to head up the transition team and detailed severance packages that will be offered to top American executives who lose their jobs once the merger is completed.

Nine executives at AMR Corp., including American Eagle president Dan Garton, chief financial officer Bella Goren and chief commercial officer Virasb Vahidi, would receive lump sum payments equal to twice their annual salary, two times their annual bonus plus another payment equal to two times any eligible long-term incentive bonus, according to a filing made with the U.S. Bankruptcy Court late Friday. The executives would also receive paid health insurance for two years and first-class seats for themselves and their families for life.

Separately, some mid-level managers will be eligible for retention bonuses not to exceed more than 50 percent of their salary if they stay with the company, and 10 managers will be able to receive retention bonuses equal to their annual base salary.

The carrier has set aside $30 million for the retention program, the filing said.

US Airways President Scott Kirby and American Treasurer Beverly Goulet will head up the merger integration team, US Airways Chief Executive Doug Parker said in a letter sent to employees on Monday.

"Scott and Bev will provide solid leadership to the critical task of transition planning - developing joint plans between now and closing our merger so that we are prepared to begin integration immediately upon closing," Parker said in the message.

The merger is expected to close in the third quarter, said Parker, who will become chief executive of the combined airline. American's chief executive, Tom Horton, will become chairman of the carrier.

In Washington, a House Judiciary Committee hearing is scheduled for today where executives from both carriers and industry experts are scheduled to address how the proposed merger affects competition in the airline industry.

"I know that many members of Congress are skeptical of promises made in these situations and also concerned about industry concentration," American's general counsel, Gary Kennedy, said in remarks prepared for the hearing and released on Monday. "As to the former, we do not intend to make commitments that we cannot keep. And as to the latter, it is clear that this merger does not create a high degree of concentration."

In New York, a bankruptcy judge today is scheduled to hear arguments on a variety of motions made by AMR, including permission to enter into sale-leaseback transactions for 15 Boeing 737-800s and one Boeing 777-300ER aircraft it's scheduled to receive later this year.

The bankruptcy court will consider the proposed executive compensation packages as part of the merger agreement at a hearing scheduled for March 27. The other six top executives who would be eligible for the enhanced severance packages are Kennedy, the general counsel; Maya Leibman, chief information officer; Denise Lynn, senior vice president of people; James Ream, senior vice president of operations; William Ris, senior vice president of government affairs; and Jonathan Snook, senior vice president of customer service.

All nine will receive a 3 percent raise in the second quarter, as will vice presidents. Non-union employees at American and American Eagle will receive pay increases in 2013. American passenger service agents, who recently voted against union representation by the Communications Workers of America, will receive a 50 cents-per-hour raise in October. American Eagle agents will receive merit-based pay raises which will average about 1.5 percent of the current base pay rates.

Andrea Ahles, 817-390-7631

Twitter: @Sky_Talk

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