Via Electronic Mail:
Maria Kate Dowling
Associate General Counsel
National Mediation Board
1301 K Street, NW, Suite 250E
Washington, DC 20572
Re: CR-7110 (US Airways/American Airlines/APA/USAPA)
Dear Ms. Dowling:
The Board’s investigation of the existence of a single transportation system covering a craft or class is guided by the criteria established in TWA/Ozark, 14 NMB 218 (1987). In TWA/Ozark, the criteria primarily identified by the Board as supporting a “single carrier” finding are those showing the carriers are held out to the public as a combined entity and that the separate existence of the carriers has been extinguished,
[W]hether a combined schedule is published; how the carrier advertises its services; whether reservation systems are combined; whether tickets are issued on one carrier’s stock; if signs, logos and other publicly visible indicia have been changed to indicate only one carrier’s existence; whether personnel with public contact were held out as employees of one carrier; and whether the process of repainting planes and other equipment, to eliminate indications of separate existence, has been progressed.
TWA/Ozark, 14 NMB 218, 236 (1987).
USAPA submits yet further evidence in this supplemental submission showing that American Airlines and US Airways have not “progressed” at all on these primary public indicia of a single transportation system, much less to the substantial degree necessary to support a finding of a single transportation system. The continued separation of the Carriers has been consistently shown by USAPA’s filings in this matter. By contrast, American, US Airways and APA peddle to the Board the fiction that American and US Airways have combined based on nothing more than changing the titles of management employees and their future plans to combine operations, unsupported even by firm timetables, much less the actual integration of the Carriers.
1. American and US Airways continue to have separate flight schedules, advertisement, reservation systems, ticketing and other visible indicia to public
As USAPA demonstrated in its May 28, 2014 supplemental filing, American and US Airways continue to maintain separate flight schedules, ticketing and reservation systems resulting in wholly different fare pricing to the traveling public. A June 24, 2014 analysis published by the Charlotte Observer also shows that the Carriers ticketing and reservation operations continue as they did premerger, save only a codeshare agreement that permits them to sell tickets of each other. USAPA Exh. 33. But just as shown by the May 16, 2014 analysis of the Wall Street Journal (USAPA Exh. 31), American and US Airways price and sell even their codeshare flight separately using different inventories of seats, leading to fare price differences in the hundreds of dollars. The Charlotte Observer concluded,
Because of lags in the computer systems used to display ticket prices, the same flight can appear for hundreds of dollars more or less, depending on whether you search USAirways.com or AA.com…In the Observer’s random fare survey, price differences popped up on long-haul flights, hub-to-hub travel and flights to smaller markets, even when booking the exact same flights.
USAPA Exh. 33. The Observer went on to note that these significant differences in fare price are caused by the fact that American and US Airways continue to operate as separate airlines and price their tickets differently, including looking at different inventories of seats.
But the airlines still have separate reservation systems, and they will effectively operate as separate airlines until those systems are combined. That won’t happen until sometime next year.
So for now, American and US Airways are treated in computer systems as separate airlines selling seats on each other’s planes. The inventory of code-share tickets for each airline isn’t updated in real-time, said American’s Casey. If you’re looking at a US Airways flight on American’s website, you might see a different price compared to the same tickets on US Airways’ site, because the computer systems are looking at different inventory levels and seeing different levels of demand and availability.
USAPA Exh. 33 (emphasis added).
It should be noted that the Charlotte Observer interviewed Don Casey, American Airlines Vice-President, of Revenue Management, for its article and Casey conceded the Carriers’ separation as the cause of this dramatic difference in fare pricing. The newspaper noted these admissions by Casey, “’The inventory of code-share tickets for each airline isn’t updated in real-time, said American’s Casey’ … ‘You’re always going to find discrepancies driven by this [different] estimated availability,’ Casey said.”
In short, the primary indicia of combined operations required by TWA/Ozark are wholly absent in this case and will not be present until late 2015 at the earliest. Once again, the actual facts of the Carriers’ continued separation, which the Carriers concede to everyone else except the Board, show that the NMB cannot now conclude that American and US Airways constitute a single transportation system in the craft or class of pilots.
2. Only an insignificant number of US Airways aircraft have been repainted into American Airlines livery
As shown in USAPA Exhibit 34, the Carriers have only painted eight US Airways aircraft into American livery. And six of those eight aircraft are undoubtedly the former Star Alliance liveried aircraft of US Airways that had to be repainted in order to avoid being parked after US Airways left the Star Alliance March 31, 2014. So, in truth, only two US Airways liveried aircraft have been repainted into American livery out of an almost 300 aircraft fleet. And even the repainting schedule shown in USAPA Exhibit 34, projecting just 13 percent of the fleet repainted by Q2 2015, is fanciful given how few aircraft have been repainted to date. Under the current rate of four aircraft per quarter, even the 40 aircraft identified in USAPA Exhibit 34 to be completed by Q2 2015 will take into 2017 or later to be repainted. The rest of the schedule will similarly slide out for years. The Carriers’ unrealistic repainting schedule projections will no doubt be promptly revised if they succeed in obtaining their desired premature single carrier finding by the NMB.
3. Employees will not have a combined uniform until at least Fall 2015
In its June 25, 2014 supplemental submission, USAPA noted that the Carriers have not implemented a common uniform for employees or even common accessories to create the appearance of a common uniform. Attached as USAPA Exhibit 35 is further information from the Carriers showing they do not even anticipate implementing a common uniform until Fall 2015. And that “anticipation” is of course subject to change.
*****
The record before the Board does not support a finding that the Carriers have substantially integrated as a single transportation system under the indicia of TWA/Ozark. Accordingly, the Board must continue its investigation until the record is further developed. TWA/Ozark, 14 NMB at 237 (“These are broad areas of inquiry and frequently the facts involved in a particular merger require more specific investigation.”) USAPA renews its request for a hearing allowing it to put the Carriers and APA to their proof on their unsubstantiated allegations that a single transportation system exists between American and US Airways in the pilot craft or class.
Respectfully submitted,
William R. Wilder
cc: B. O’Dwyer
M. Bradley
R. Siegel
C. Hollinger
P. Jones