Turbulent times
ANALYSIS | Unions ready to shoot down United merger plan with US Airways
May 8, 2008
United Airlines' powerful unions are not happy. And that is sure to further complicate an already hugely complicated situation for United CEO Glenn Tilton as he attempts to chart a course for the beleaguered carrier, which watched oil inch toward $125 a barrel Wednesday (it settled at $123.53).
In recent days, hyperventilating journalists who have been covering United's rumored consolidation efforts for months shifted focus after Continental Airlines said "no" to a stunned United. Without missing a beat and despite no on-the-record confirmations, they began insisting a United merger with a very tattered US Airways was but days away. And as has also been the case for months, United hasn't formally confirmed any merger talks, though there obviously has been plenty of discussion related to that topic.
If Tilton is indeed hell-bent on cutting a last-ditch deal with US Airways, one of the most poorly regarded (and poorly performing) of all the legacy carriers still operating domestically, United's CEO is going to have to contend with -- and ultimately win over -- three contentious, powerful and upset United unions, namely its pilots, mechanics and flight attendants.
Just how unhappy are they? Very, apparently. In a detailed statement issued Wednesday, Steve Wallach, chairman of the United Master Executive Council of the Air Line Pilots Association, said his union has "serious concerns that the highly touted financial benefits to be derived from such a merger [with US Airways] are unlikely to be achieved because those benefits are based on assumptions that have no basis in reality." Wallach went on to say "a merger with US Airways should be a last resort and not a first choice for United."
We're told the mechanics and flight attendants are in full agreement with the anti-US Airways merger stance of Wallach and his pilots union. Wallach, by the way, also sits on United's board of directors and presumably is privy to many of the particulars about whatever consolidation talks have gone on thus far.
United spokeswoman Jean Medina would not comment on any rumored merger talks with US Airways or the status of those discussions, but she insisted the unions would absolutely be consulted about a proposed consolidation deal before it is consummated. We sure hope so. Because without the unions on board, a merger-obsessed United surely won't get very far along in any deal it wishes to make happen.