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TheStreet Open House

US Airways Rushes to Sign Contracts in Advance of Merger

CHARLOTTE, N.C. (TheStreet) -- As the merger watch continues, US Airways (LCC) is busily wrapping up contract issues with its labor unions, with three key events early this month.

Flight attendants begin voting Thursday on a revised contract agreement, the third time in a year that members will vote on a contract after they rejected deals in March and May. On Friday, the U.S. Airline Pilots Association will count votes on a memorandum of understanding for a temporary contract if a merger with bankrupt AMR (AAMRQ.PK) occurs.

US Airways on Feb. 1 announced a tentative contract agreement with pilots at wholly-owned subsidiary Piedmont Airlines.

Getting deals in advance of a merger is apparently a management goal, said Bruce Freedman, a 29-year Piedmont pilot who is chairman of the airline's ALPA chapter, which represents about 350 members. "I would suspect it would ease a lot of management concerns if they could get these agreements in place," he said.

The deal followed four years of negotiating a contract that became amendable in May 2009. "It is a very respectable agreement given today's industry environment," Freedman said. "It is one that Piedmont pilots can be proud of."

Meanwhile, flight attendant contract voting begins at noon Thursday and concludes three weeks later on Feb. 28. The 6,700 flight attendants, members of the Association of Flight Attendants, have twice rejected a new contract.

In March, 75% of those who voted were opposed. In May, 51% were opposed and a swing of 49 votes would have resulted in approval. Union leaders are in Charlotte, the airline's largest flight attendant base, explaining contract details to members.

The third tentative deal was reached in a status conference with the National Mediation Board in late January. It improves on previous deals by offering flight attendants a $1,700 ratification bonus as well as a $40,000 early-out payment for flight attendants who choose to leave. Additionally, it provides that negotiations on a tentative merger contract would begin immediately upon ratification, and it incorporates all of the previously negotiated $45 million in contract improvements.

"The NMB wanted to resolve this one way or the other," said a flight attendant leader who asked not to be named. "They told both parties, 'you are at the end of the road'" as far as contract negotiations.

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