US Airways pilots stop union

April 17, 2008 5:30:43 PM PDT
Three years after their companies joined forces, pilots from America West Airlines and the former Virginia-based US Airways remain locked in a bitter seniority dispute that's become a cautionary tale as other carriers ponder a new wave of consolidation. The internal fight at Tempe, Ariz.-based US Airways Group Inc. reached a climax Thursday when pilots ousted their union of 59 years and replaced it with another group. The new union, the US Airline Pilots Association, is dominated by pilots from the former US Airways. It will try to throw out an arbitrated seniority ruling that isn't favorable to them.

"It's going to be extremely difficult for me personally and professionally to watch what happens to this pilot group now," Capt. Jack Stephan, chairman of the ousted Air Line Pilots Association for US Airways, said in a statement after the vote was announced.

"Industry consolidation is inevitable, and the economy is slowing. I believe that these challenges will be too much to ask of an untested, underfunded union."

The struggles of US Airways pilots have become a highly visible example of the problems with consolidation.

Pilots at Delta Air Lines helped management fight off a hostile bid from US Airways last year. At the time, some Delta pilots said they wished US Airways would finish its current combination before looking to join with another company.

This year, Northwest Airlines Corp. and Delta Air Lines Inc. gave their pilots time to work out seniority issues before announcing plans to join forces earlier this week. However, Northwest pilots refused to go along and the companies moved ahead without a pilot agreement.

Pilot problems have "made almost every merger in the past messy, expensive and time consuming for management," said Calyon Securities analyst Ray Neidl. "If you can get them in the boat and paddle with you, mergers would go so much smoother."

Although US Airways' profit surged the first year after the companies combined, problems among its pilots have festered.

Pilots have said that disagreements over seniority have led to shouting matches in airport terminals. Supporters of rival pilot unions have sent each other threatening e-mails, engaged in at least one shoving match and called each other to the parking lot to settle their arguments.

Seniority is extremely important for pilots. Their place in the company pecking order decides what planes they can fly, what routes they'll take, and when they can go on vacation.

The US Airline Pilots Association was created last year by a disgruntled group of pilots who were unhappy with their seniority.

The fledgling group asked the federal National Mediation Board to call a rare decertification election this year. The vote, which ended Thursday, gave US Airline Pilots Association collective bargaining rights for all 5,300 pilots in the US Airways system.

Capt. Scott Theuer, a spokesman for the new union, said its first order of business is to get representatives in place across the country. Theuer said few pilots from the former America West have joined their union yet.

"Currently, we're going to represent them from the East Coast until we get someone to step forward from the West," he said.

US Airways spokeswoman Andrea Rader said the carrier would honor the pilots' decision to switch unions.

"We're eager to get back to the bargaining table and negotiate a single contract," Rader said.

US Airways Group Inc. has reached contract agreements with all of its employee groups except pilots, flight attendants and baggage and ramp employees. The baggage and ramp employee union signed off on a tentative agreement last week.

Pilots from the former US Airways (known internally as "East" pilots) and their counterparts from America West (known as "West" pilots) had been negotiating a joint contract with management until they split on seniority.

East pilots said they were tired of conceding pay and benefits during the past several years. They wanted pilots ranked according to when they first joined the company. That would push them ahead of most West pilots since America West was a much younger airline.

West pilots wanted to keep all pilots in the same general place on the seniority list.

An independent arbitrator was called to decide the issue last year and issued a ruling mostly favorable to the West group. East pilots disagreed and are asking a Washington, D.C., court to set it aside. Union representatives for East pilots later walked away from formal negotiations on a joint pilots' contract and demanded immediate pay raises before they return.

Meanwhile, some East pilots formed USAPA to challenge the existing union and replace it as the collective-bargaining group. They're now expected to present management with a revised seniority proposal.

The arbitrator's ruling "does not apply to USAPA," Theuer said. "It's an agreement between the ex-bargaining agent, ALPA, and the pilot group. And that agreement no longer has legal standing on the property."

US Airways shares fell 18 cents, or 2 percent, to $7.87 on Thursday.


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