This Day On The Street
Continue to site right-arrow
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
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

US Airways' Biggest Union Wants Contracts Before It Backs Merger

Stocks in this article: AAMRQLCC

CHARLOTTE, N.C. ( TheStreet) -- Hundreds of US Airways (LCC) employees are in Washington, lobbying members of Congress to support a planned merger with American (AAMRQ), despite opposition from the Justice Department.

Supporters do not, however, include leaders and members of the International Association of Machinists, the largest union at US Airways, representing about 3,500 mechanics and 5,800 fleet service workers.

"I think it raises a red flag with members of Congress when the largest labor group is not involved with the lobbying," said Bill Wise, president of IAM Local 1725 in Charlotte.

The Justice Department's 57-page complaint opposing the merger focuses on protecting consumers by preserving the low fares offered on some one-stop routes by US Airways. But it doesn't mention that US Airways earns lower revenue per available seat mile on comparable routes than bigger competitors do, and that it compensates for lower revenue by paying its employees less than their peers at bigger rivals.

Many employees were to receive contract improvements triggered by the merger: US Airways has estimated the gain in employee compensation at about $400 million annually. The biggest beneficiaries would be US Airways pilots. Pilots from both US Airways and from the former America West -- the two airlines merged in 2005 -- have below-industry standard contracts. East pilots have had bankruptcy contracts since 2003. For them, a merger means a new contract that over six years would provide $1.6 billion worth of benefits, including pay raises of 13% to 35% over existing rates and lump sum payments around $10,000 each.

But US Airways mechanics and fleet service workers are looking to make contract gains through negotiations, which have been stalled since their two contracts became amendable 21 months ago on Jan. 2, 2012. IAM members, primarily fleet service workers, picketed Friday at Charlotte Douglas International Airport.

Talks have been delayed by the airline's merger efforts and by a failed effort by the International Brotherhood of Teamsters to organize the mechanics. That effort began late in 2012 and ended in August, when the Teamsters lost a representation election .

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,810.06 +91.06 0.51%
S&P 500 2,063.50 +10.75 0.52%
NASDAQ 4,712.97 +11.1030 0.24%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs