The union representing pilots at US Airways Group Inc. (NYSE:LCC), which has been working on a new contract since the airline's 2005 merger with America West Holdings Corp., on Friday applied for federal mediation as part of its effort to secure a new deal.
Pilots from US Airways and the old America West still fly under separate contracts, in no small part due to infighting among aviators over merging their seniority lists. The two sides went to arbitration over the issue, but that decision was rejected by the legacy US Air pilots, who then led a successful effort to split from the Air Line Pilots Association and form the current union representing the workers, the US Airways Pilots Association.
The fight with American West pilots is still ongoing, with oral arguments on an appeal related to the seniority decision scheduled to be heard in December. Meanwhile, USAPA president Mike Cleary in a
statement said that "our pilots have been laboring under substandard bankruptcy ... contracts for years" while the talks "have gone nowhere." With the talks now "hopelessly stalled," according to Cleary, the union is turning to the government for help.
Fear over labor integration is a huge obstacle when airline managements consider dealmaking, and without a doubt many skeptical CEOs are following the US Air talks closely. US Airways has insisted that the company would actually save money with a unified contract because it would be able to operate more efficiently, but it has left the dispute over seniority in the hands of the pilots to resolve. That strategy is in contrast to what Delta Air Lines Inc. (NYSE:DAL) did when it was contemplating a merger with Northwest Airlines Corp. last year. Delta management took the proposal directly to pilots, and after some delays was eventually able to secure some degree of pilot labor peace along with a unified seniority list ahead of closing its purchase of Northwest.
More recently Republic Airways Holdings Inc., which over the summer bought Frontier Airlines and Midwest Air Group, has taken a hands-off approach similar to US Airways in dealing with its disparate pilots groups.
- Lou Whiteman
Lou Whiteman is a senior writer covering the automotive, transportation and industrial sectors. Follow him on Twitter @louwhiteman
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