This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Small AMR Pilot Group Opposes Merger

DALLAS ( TheStreet) -- An increasingly vocal but so far small group of American (AAMRQ.PK) pilots is opposing a merger with US Airways. (LCC), saying its seniority could be threatened.

Chris Manno, a Dallas-based 737 captain with 27 years at the airline, is co-organizer of a pilot group opposed to the merger. The recently formed group so far has about 50 members. Its Web site went online Tuesday morning. "Fifty is the tip of the iceberg," Manno said. "A lot of guys are calling, saying 'we have no place to register opposition.'"

Manno said the group's primary interest is to protect pilot seniority. He said there is no assurance that will occur in a merger. Leaders of the Allied Pilots Association, which represents American pilots, and the U.S. Airline Pilots Association, which represents US Airways pilots, have said that once a joint contract is negotiated, seniority integration could be referred to binding arbitration and that "fences" would protect flying at existing bases, so that pilots would not lose flying they currently have. Also, US Airways management has said that no existing hubs would be closed.

But Manno said nothing is guaranteed. "If it ever comes to arbitration, fences won't matter," he said. "Bases won't matter. If your base is closed, you will have to bump into some other base. A lot of people will get displaced.

"It is too risky," he said. "It is not cut and dried. We are not willing to go into this and risk our seniority with no assurances and way too much uncertainty."

APA spokesman Tom Hoban said that only a tiny number of APA's 8,000 members oppose a merger. "We've seen no groundswell in support of Tom Horton and a standalone operation," he said. "It's been just the opposite." He said the APA board voted 18-0 in support of a merger in April, and that 95% of its members voted "no confidence" in the current management team and the standalone plan.

Without a merger, he said, American will remain far smaller than its key competitors and "there won't be any change in the toxic culture we've got." He called Manno's efforts part of an orchestrated management campaign.

As for seniority, Hoban said the solution under the McCaskill-Bond model will most likely include establishing a ratio integration for seniority among pilot groups and then protecting pilots in certain categories with fences. The same solution worked in the Delta (DAL - Get Report) merger and seems likely to work in the United (UAL - Get Report) merger as well, he said.

As the American/US Airways merger appears to gather momentum, the support of pilots is being viewed as increasingly important. In a memo to its managers last week, American said that it, in collaboration with its bankruptcy creditors committee, is "determined that union involvement in the discussions is an important step to appropriately evaluate the impact of a merger on labor costs, integration and seniority." As a result, both APA and USAPA have been involved in the discussions.

-- Written by Ted Reed in Charlotte, N.C.

>To contact the writer of this article, click here: Ted Reed

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
LCC $0.00 0.00%
DAL $43.48 -0.50%
UAL $53.09 -1.60%
AAPL $111.82 1.90%
FB $89.02 2.10%

Markets

Chart of I:DJI
DOW 16,505.91 +220.40 1.35%
S&P 500 1,957.60 +17.09 0.88%
NASDAQ 4,742.5120 +44.9760 0.96%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs