MERGERS, TRANSACTIONS, AND ACQUISITIONS
WHAT’S ON THE HORIZON
Fellow US Airways Pilots:
The constant cycle of change in the airline industry is making good the old adage, “We certainly live in interesting times.†Merger news and rumors continue to circulate, and it is noteworthy that news reports have both detailed the difficulties in combining labor forces, and that there are no deals without the pilots.
USAPA is certainly aware of the latest rumors concerning a merger between UAL and US Airways and of the UAL MEC’s recent press release. I want to assure you that your union is monitoring these developments carefully and will clearly communicate to the Company that a successful merger will require the active involvement and consent of the US Airways pilot group. Should any transaction be misguided, and not in the best interest of our Company and its employees, USAPA will deploy every available resource to stop it.
Concerning any future transaction, let’s consider the following:
The current Transition Agreement between US Airways and both the US Airways and America West Pilot groups has a minimum fleet size. Management has made public statements as recently as the first quarter conference call on Thursday, April 24th that they are limited in the amount of reduction of flying that can take place due to these limitations.
Additionally, for the East pilot group, LOA 93 provides an additional minimum East aircraft fleet size of 202, in which E-190 aircraft are not included in this number. The East fleet is approximately 206. The Company plans to have 25 E-190 aircraft by the end of 2008.
Under the Transition Agreement, the minimum number of West aircraft is 120. The West fleet is approximately 129.
The Company’s stated fleet plan for 2008 is 330 aircraft (does not include E-190), plus 25 E-190 aircraft for a total of 355 aircraft.
Minimum Fleet Recap:
East Mainline = 202 minimum (does not include E-190), current approx. 206
West Mainline = 120 minimum, current approx 129
A question that is often asked is, “What happens if we merge with United or any ALPA carrier.†As we are now an independent union, if an impasse in seniority integration is reached with no resolution, merger negotiations will be under Allegheny-Mohawk arbitration. This provision is in our contract, but it is also a result of a recent change in federal law, which provides that mergers will be governed by applicable contractual provisions “so long as those provisions allow for the protections afforded by sections 3 and 13 of the Allegheny-Mohawk provisions.â€
The two relevant sections of Allegheny-Mohawk provide as follows:
Section 3. Insofar as the merger affects the seniority rights of the carriers’ employees, provisions shall be made for the integration of seniority lists in a fair and equitable manner, including, where applicable, agreement through collective bargaining between the carriers and the representatives of the employees affected. In the event of failure to agree, the dispute may be submitted by either party for adjustment in accordance with section 13.
Section 13. (a) In the event that any dispute or controversy (except as to matters arising under section 9) (note: section 9 deals with issues involving severance payment and relocation expense) arises with respect to the protections provided herein which cannot be settled by the parties within 20 days after the controversy arises, it may be referred by any party to an arbitrator selected from a panel of seven names furnished by the National Mediation Board for consideration and determination. The parties shall select the arbitrator from such panel by alternatively striking names until only one remains, and he shall serve as arbitrator. Expedited hearings and decisions will be expected, and a decision shall be rendered within 90 days after the controversy arises, unless an extension of time it is mutually agreeable to all parties. The salary and expenses of the arbitrator shall be borne equally by the carrier and (i) the organization or organizations representing employee or employees or (ii) if unrepresented, the employee or employees or group or groups of employees. The decision of the arbitrator shall be final and binding on the parties. Rumors of outside interference from any organization(s) such as ALPA are unfounded, as the process will be as federal law dictates. Obviously, USAPA cannot guarantee results, but our focus is solely on the interests of our pilots and you can be assured that USAPA will use all the resources available in order to protect the careers of the 5,200 US Airways pilots.
Sincerely,