Continental pilots threaten to scuttle transoceanic alliance

[MERV]

NEW YORK (MarketWatch) -- The pilots union at Continental Airlines is threatening to undo a four-way transatlantic joint venture the carrier forged last year, unless current labor talks result in greater job security.

Continental, United, Air Canada and Germany's Lufthansa won antitrust immunity from the U.S. Department of Transportation in July to form the venture, which allows the partners to pool revenue and coordinate airfare and routes more closely. See archived story on the joint venture's formation.

"Antitrust immunity would be more a benefit than a negative for the pilots," said analyst Hunter Keay of Stifel Nicolaus. "The potential financial benefits would eventually outweigh any headcount risk because you don't tend to see furloughs at profitable entities."

Other insiders weren't so sure, noting high levels of mistrust and anger at the legacy carriers between management and its labor.

"When you start combining, even in an alliance like that, they can cut flights," said Richard Gritta, an aviation expert at the University of Portland's business school. "They can look at local systems and say, 'These are not making money' or 'Our alliance partners cover those areas,' and they will cut flights and jobs."

For pilots, the biggest fear is Continental's farming out new routes and jobs to its partner airlines, such as United parent company's UAL Corp.'s (UAUA 13.80, +0.08, +0.58%) arrangement with Ireland's Aer Lingus (UK:AERL 0.68, +0.01, +1.49%) .

"UAL provides no airplanes, no pilots -- nothing," said Pierce. "The flying is done by an alter-ego airline, so UAL may get an enhancement through revenue, but the pilots don't get anything out of the deal. That's why this job-protection language is needed."

Let see what pilots at CO will do they're trying to protect their jobs from this venture. This would help more the other alliances than star. Meaning they would lose a key player from their alliance.

Continental pilots threaten to scuttle transoceanic alliance
http://www.marketwatch.com/story/continent...02?siteid=yhoof

 

[Borescope]

Let see what pilots at CO will do they're trying to protect their jobs from this venture. This would help more the other alliances than star. Meaning they would lose a key player from their alliance.

Continental pilots threaten to scuttle transoceanic alliance
http://www.marketwatch.com/story/continent...02?siteid=yhoof

The pilots at CO will eventually approve this, but there will be scope clauses to cover it and I imagine the pilots will use this in their section 6 negotiations The company needs this to happen and they know that they'll have to give something to the pilots to get it.