US Air RJ talks collapse as Siegel takes helm

 - May 15, 2008, 8:34 AM

Scope-clause negotiations between US Airways and the Air Line Pilots Association reached an impasse just days after the beleaguered airline early last month recruited former Continental Express president David Siegel to replace Stephen Wolf as CEO. The talks broke down soon after the sides reported significant progress toward a settlement, the outcome of which could determine the airline’s direction for years to come.

According to ALPA, it conceded the right to add 245 regional jets to US Airways Express fleets, but management refused to budge on the issue of furlough protection for 287 pilots covered under a no-furlough clause in the union’s 1998 collective-bargaining agreement. The pilots, all listed on the company employee roster since at least 1990, face furlough over the next 10 months if the airline enacts its plans to further reduce its pilot roster. It has already furloughed 1,073 pilots, and plans to invoke force majeure to furlough those previously protected under the ALPA contract.

“After what turned out to be a week-long effort, at the eleventh hour the company began to approach us with counterproposals that were mostly of a nit-picking nature,” said US Airways’ ALPA Master Executive Council representative Roy Freundlich. “We told them we had these pilot job-protection issues before we walked into negotiations a week earlier. The company flat out said they were not going to address them.”

Freundlich told AIN that the union also agreed to the airline’s request for the right to place the US Airways code on an unlimited number of non-US Airways Express regional jet flights originating and terminating west of the Mississippi River. Such a provision would allow US Airways to proceed with a possible code-share agreement involving St. George, Utah-based SkyWest Airlines, whose own plans to expand its Western U.S. jet presence face barriers supported by the scope clause at United Airlines.

“The offer went well beyond the latitude that other airlines enjoy,” said Freundlich. “They actually had in their hands a competitive advantage in the regional jet arena. We just wanted assurances that this was not going to result in a permanent job outsourcing for pilots who have been with this airline much longer than most of the management. They just basically walked away from it, which raises the question, ‘What is the ultimate plan for this airline?’”

Another issue the sides failed to resolve centered on ALPA’s demand for a recall plan for the remaining pilots not protected by the current contract’s no-furlough clause. The union wants US Airways to recall a furloughed pilot whenever an active pilot retires or leaves the company for any other reason. Again, the airline refused to negotiate, said Freundlich.

The union also asked the airline to freeze the minimum size of the mainline fleet at 315 airplanes, based on management’s projections for the end of this year. Finally, ALPA wanted to tie any growth in US Airways Express jets to the size of the mainline, hence the proposal to limit the number of RJs at Express initially to 315–245 more than the current cap of 70. The proposal would have allowed one additional RJ for every airplane added to the mainline fleet. Negotiations on those provisions had begun to progress, but the sides never reached an agreement.

One proposal on which the sides did make significant progress involved what ALPA dubbed the “jets for jobs” program, under which furloughed mainline pilots would get the chance to fly RJs for a US Airways Express affiliate whenever new regional jet capacity created jobs there. Under the plan, once US Airways began recalls, the furloughed pilots flying for Express carriers could return to the mainline. “That was actually progressing, and we had most of those issues worked out,” said Freundlich. “But the very important issues of furlough-protected pilots remaining employed, a recall schedule and guaranteeing a minimum size of the mainline remain unresolved.”

The talks never addressed the now-defunct plan to place regional jets with the mainline, nor did they involve protecting payscales of mainline pilots, insisted Freundlich. “It’s all really tied into guaranteeing the minimum size of the mainline,” he said. “Our sole purpose is making sure this doesn’t result in creating temp services out of our current jobs.”

Freundlich wouldn’t speculate on the role the company’s change in CEOs played in negotiators’ refusal to address the union’s furlough concerns. “They had marching orders not to address the two issues that were most important to us, and those orders came from then-CEO Stephen Wolf,” said the ALPA representative. “We are not sure that David Siegel has authority beyond Stephen Wolf’s influence as chairman of the board. We’re taking a wait-and-see approach with Siegel, and if he turns out to be a better CEO than Wolf, we’ll certainly be happy about that.”

At press time the two sides had not communicated since talks ceased on March 9, and no date had been set to resume negotiations. Meanwhile, ALPA awaits an April 29 arbitration hearing on its grievance against US Airways’ assertion of force majeure. The union claims that the company improperly invoked force majeure to order the furlough of the 287 furlough-protected pilots, as well as to execute elements of former president and CEO Rakesh Gangwal’s all-but-forgotten “Plan B” restructuring plan, including the retirement of its fleet of Fokker 100s, MD-80s and 737-200s in favor of lower-capacity regional airplanes flown by US Airways Express affiliates.