Union Tensions Emerge over AMR-US Air Merger

 - August 26, 2013, 12:10 PM
AMR and US Airways expect merger “synergies” to extend to fleet types. In July American took delivery of its first Airbus A320-series narrowbody, some 270 of which US Airways already operates. (Photo: American Airlines)

While the Air Line Pilots Association has taken an unequivocal stance against the U.S. Justice Department’s attempt to block the merger of bankrupt American Airlines parent AMR and US Airways, at least one segment of the union–namely the unit representing the pilots of American’s wholly owned regional subsidiary–sees things a bit differently. In fact, American Eagle’s pilots might consider the department’s opposition to the merger something of a reprieve after US Airways management insisted on creating a so-called B Scale pay formula at Eagle in return for rights to the next batch of large regional jets the “new” American orders.

In an August 16 “Newsblast” reporting to membership on the status of AMR’s reorganization plan and the lawsuit’s potential effect on its confirmation by the bankruptcy court, American Eagle Master Executive Council (MEC) chairman Tony Gutierrez complained of a failure of the merger agreement to include any accounting of his airline’s interests.

“Separately from the [Department of Justice] antitrust issue, the ALPA-represented pilots of American Eagle are very concerned that AMR’s current [plan of reorganization, POR] does not provide for a viable future for American Eagle,” said Gutierrez. “In this regard, it is significant that a viable business plan for American Eagle was part of the original stand-alone business plan for the new American but that plan is conspicuously absent from the merger POR.”

Another official from the Eagle MEC stressed to AIN that the pilot group’s leadership does not oppose a merger per se, only one “absent a viable business plan for American Eagle that includes the acquisition of ‘large’ RJ aircraft.” Although he declined to comment on ALPA International’s position, he acknowledged that it does not exactly “align” with that of the Eagle MEC. “I cannot comment on ALPA’s national position except to say that it is directed at the health of the airline industry overall, whereas the Eagle MEC’s comments are specific to the health of our carrier,” he said.

For its part, ALPA International complains that the Justice Department’s suit has served to interfere with the airlines’ progress in achieving a healthy competitive environment. “The Justice Department’s move isn’t rooted in the economic reality facing the aviation industry and workers, one of the most fiercely competitive industries in the global economy,” said ALPA in a statement. “Moreover, the [Department of Justice] appears to have completely overlooked the need for U.S. carriers, such as American and US Airways, to position themselves to compete in the international marketplace against powerful–often government supported–foreign airlines.”

Not long after ALPA published its stance against the Justice Department’s move, union president Lee Moak cosigned with 12 regional airline chapter heads an August 13 letter to members supporting American Eagle’s position against US Airways’ effort to “whipsaw,” or pit regional airline pilots against each other to gain leverage in negotiations for new fee-per-departure contracts. The Eagle MEC considers Moak’s support a victory, given ALPA’s fervent advocacy of the merger. Indeed, if any new merger agreement doesn’t address the “whipsawing” tactics described in the letter, ALPA might need to rethink its position.


When you have people like roger cohen, president of the raa, who flat out denies or is unaware that the majors pit regionals against each other to get the contract, the turmoil in the regional industry becomes a little clearer. Check out PBS frontlines "flying cheap" and you will see what I'm talking about. Hopefully the regionals come out on top in this "b scale" war with u.s. airways and all other major airlines.

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