Pilots Expand Warnings To US Airlines On Mergers

[Gerald A]

April 16, 2008

US airline pilots unions sharpened their rhetoric on Tuesday as industry consolidation heated up with unions expanding their warnings to carriers about trying to merge without their consent.

"The pilots of our respective airlines will not allow any merger unless management meets or exceeds our demands to be treated fairly and equitably," said union leaders at United Airlines and Continental Airlines.

The two are said to be considering a merger one day after Delta Air Lines and Northwest Airlines unveiled a merger proposal to shareholders.

The 6,000 Delta pilots have signed on to the plan, but their 5,000 counterparts at Northwest are resisting on grounds it hurts them economically and does not protect their seniority, which is crucial for a pilot's daily work arrangement, pay, and career advancement.

"The risk to Northwest Airlines and to the Northwest pilot group from letting this merger proceed, as it is now structured, is simply too great," said Dave Stevens, the chairman of the Northwest unit of the Air Line Pilots Association (ALPA).

Stevens said in a letter to members that Delta chief executive Richard Anderson on Monday rejected the union's suggestion the airline delay the merger announcement to try one more time to win support of the Northwest pilots.

Northwest pilots have concluded Delta management and its pilots have arranged to "disadvantage the Northwest pilots economically" regarding seniority. No amount of money can sustain a carrier which creates this level of discord. This is a recipe for failure," Stevens said.

Pilots across the industry are wary of management executives, under pressure from shareholders and deteriorating airline finances, who are seeking to cut costs and expand business through tie ups with rivals.

Bankruptcies at several carriers earlier this decade that triggered massive wage and benefit cuts severely undercut union-management relations, especially with pilots at United and Northwest.

Unions, including flight attendants and mechanics, now are stiffening their backs ahead of what they view as another bid to shake up the industry and wring out costs -- this time by shrinking the number of major players.

Pilots at Delta and Northwest had previously warned their companies about trying to merge without their blessing. Those at United and Continental weighed in as speculation grew about merger prospects at their carriers.

Bill Swelbar, an industry researcher at the Massachusetts Institute of Technology, said pilots cannot block a deal outright. But he said they can "stand in the way" of the company achieving anticipated cost savings by failing to negotiate changes in seniority or relaxing contract clauses that preserve higher paying jobs by limiting the number of small aircraft airlines can fly.

"Legally they can't walk out. What they can do is play to the court of public opinion," Swelbar said of the potential for unions to leverage powerful labor allies in Congress, such as House of Representatives Transportation Committee Chairman James Oberstar of Minnesota.

Although the company proposes to grow the airline, Oberstar suspects Delta will cut routes and jobs to save money with no let up seen in record fuel prices. He called the proposal and its timing bad for employees and an attempt to muscle the pilots union.

"They are trying, I think, to stampede the pilots unions into agreement," Oberstar said of Delta's decision to move forward without the full support of labor on seniority.

Delta and Northwest management attempted to secure pilot support before announcing a deal but that faltered last month over the inability of the two unions to agree on a blended seniority system. Delta pilots reached new contract terms with the company and in return have been offered a 3.5 percent equity stake in the merged entity.

"We expect to be in negotiations with the Northwest pilots during the regulatory review period," Delta president and chief financial officer Edward Bastian told investors on Tuesday.

Continental pilots want shares in any merged company, expedited contract agreement with "substantial improvements for all pilots," and a "fair and equitable" seniority list integration.

US Airways has failed to successfully combine their pilot work groups over seniority issues after merging with America West Airlines in 2005.

Delta pilots were instrumental in helping the company fend off a hostile bid last year from US Airways.

(Reuters)

Gerald

[Montague S]

if the merger goes ahead will both airlines keep their brand identities? I understand KLM/AF keeping theirs because they represent two different nations..but NW and DL are both US carriers so I'm wondering which one by name will cease to exist in the near future if the merger goes ahead?

[Michael Morrison]

Originally Posted by Montague S

if the merger goes ahead will both airlines keep their brand identities?

Monty, my understanding is that the new entity will retain only the DELTA name.

[Paul McFarlane]

From: http://yssyforum.net/board/showthread.php?t=349

Delta, Northwest boards approve merger deal
April 15, 2008 - 11:03AM

The boards of Delta Air Lines and Northwest Airlines have approved a merger deal that would create the world's largest airline by traffic, Delta said in a statement Monday.

Delta will head the combined airline, "creating America's premier global airline" if the 17.7-billion-dollar deal passes regulatory approval, the company said in statement.

"The new airline, which will be called Delta, will provide employees with greater job security, an equity stake in the combined airline, and a more stable platform for future growth in the face of significant economic pressures from rising fuel costs and intense competition," it said.

© 2008 AFP

[Grant Smith]

April 18, 2008
Pilots at US Airways have voted to leave the Air Line Pilots Association (ALPA) and form a separate union, ALPA said on Thursday.

The pilots, who previously flew for the former US Airways and America West, which merged in 2005, left ALPA after some pilots became frustrated with the progress of post-merger discussions.

Of the 5,238 eligible pilot voters, 2,723 voted to form the US Airline Pilots Association and 2,254 voted to remain in ALPA. The new union must negotiate a new contract representing both pilot groups and merging seniority lists.

"We were obviously hopeful that a majority of all US Airways pilots would make a different decision," ALPA President Captain John Prater said in a statement.

Seniority determines what planes and routes pilots fly and their path for moving up the ranks. The issue is one of the biggest difficulties in merging two airlines.

Delta Air Lines and Northwest Airlines this week announced plans to create the world's largest airline.

An earlier attempt by Delta and Northwest to reach a merger deal was disrupted by the failure of the two carriers' unionized pilots to reach a deal on seniority.

Delta and Northwest say they have reached a deal with Delta pilots that gives them the cost savings they need to proceed with a merger without a pilot integration deal and without the full support of the pilots.

Delta pilots support the merger proposal, while Northwest pilots oppose it.

-Reuters

Some interesting decisions here...

[Mike Scott]

"an example of why management and employee groups are so far apart"

MS


Chicago, Ill., April 2, 2008—A recent employee survey conducted by United Airlines confirms what the airline’s pilots and other employees have been expressing to CEO Glenn Tilton and his executives over the past several years: that the airline has neglected its employees for far too long.

A record number of employees participated in this year’s biennial survey to tell United Airlines management the same thing employees tell them every day: they don’t trust, respect or have any faith in the management of United Airlines.

“The survey was called an ‘Employee Climate Survey.’ Well, the climate is cold, cloudy and frigid,” said MEC Chairman Captain Steve Wallach. “And the forecast is for more of the same or worse.”

In releasing the results of the survey, United stated, “(We want to compare ourselves to other) Fortune 500 companies whose employee experience we aspire to achieve.” The following highlights of the survey reveal that the Company has a long way to go to reach that level:

United claims that employee engagement remained “stable” from the survey conducted two years ago. In truth, engagement is low and getting lower -- 29 percent today vs. 30 percent in 2006.

Employee engagement with the company was from one to eight percentage points lower in nearly all operating divisions. United’s pilots and flight attendants had the largest decline in company engagement. Nine out of 10 pilots feel no connection with United Airlines.

United claims that employee “Pride in United” remains the highest scored item, but even those numbers dropped significantly from two years ago. This year’s survey shows that only 38 percent of United employees take pride in United, down 15 percentage points from 2006. Average Fortune 500 companies find that 84 percent of their employees express pride in the company in which they work. Put another way, 62 percent of United’s employees are not proud of their company, 70 percent are dissatisfied with their jobs, 73 percent are looking for new jobs and 77 percent do not think United is a great place to work.

“Time will tell whether United’s executives will use the results from this survey in a positive way,” said Captain Wallach. “If history is any indication, this survey was simply window dressing; management’s way of making the employees believe they are taking steps to address our concerns and our frustrations. Their slogan was ‘You speak. We listen. Together we act.’ In reality it is more like, ‘You speak. We don’t care. Get used to it.’ As long as the employees are treated as commodities, they will act as commodities -- something this management has failed to grasp. Neglecting employees is a recipe for disaster in the service industry.

“The employees’ voices have been expressed loud and clear. The message they have delivered is unmistakable: United Airlines’ management is failing the very people who make the airline fly. And their message begs the question: How will Glenn Tilton and his executives respond? The employees, our passengers and United’s investors are waiting for their answer.”