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US Airways Flight Attendant Deal Could Help Merger Effort

Stocks in this article: LCCUALAAMRQ.PK

CHARLOTTE, N.C. TheStreet) -- US Airways (LCC) and its flight attendants have reached a tentative contract deal after five years of talks, potentially removing a barrier to its efforts to complete a merger with bankrupt American (AAMRQ.PK) .

Details of the deal, announced at 1:30 a.m. Friday, have not been released, but flight attendants may have scored an industry-leading contract, sources indicate.

In a brief statement, the US Airways chapter of the Association of Flight Attendants said the deal is expected to "unite the over 6,700 US Airways and former America West Flight Attendants under one contract."

Clearly, US Airways' path to a merger with American is complicated by its inability to merge pilot and flight attendant contracts at the two predecessor airlines following a 2005 merger.

"There is always some skepticism because US Airways hasn't successfully merged East and West, so how is it that they think they can make this (merger) work?" said Laura Glading, president of the Association of Professional Flight Attendants, which represents American flight attendants, in a recent interview. The APFA is one of nine creditors committee members.

Without question, the biggest roadbloack to labor peace at US Airways has been the inability to find a compromise on a seniority list for the two pilot groups. Early in the flight attendant talks, the airline indicated that a pilot deal should come first because flight attendant schedules are linked to pilot schedules. But pilot talks have stalled due to the festering seniority dispute.

In fact, never before at US Airways have flight attendants made a contract deal ahead of the pilots.

Another problem has been that that the two groups of flight attendants had differing goals. The roughly 4,000 flight attendants from pre-merger US Airways, known as "the east," currently have higher wages than the approximately 2,000 flight attendants from the former America West, while West flight attendants have far more vacation time. Initial offers by the carrier would not have provided raises for the east flight attendants.

But throughout the talks, the two groups worked together. In fact, the negotiating committee had seven members from the America West chapter and two from the the east. They, unlike the pilot groups, were able to work closely together to find common ground in contract talks.

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