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Three Unions Say American Airlines Merger Gains Passed Them By

Stocks in this article: AAL

Charlotte, N.C. (TheStreet) - To merge with American Airlines (AAL), management at US Airways worked closely with the carrier's labor unions to put together a bid that won over Wall Street and American's creditors committee.

Other unions, particularly the unions at US Airways, were, in some ways, left behind.

The pitfalls of a strategy that was, in some respects, brilliant, were on full display last week. On Thursday, members of US Airways' largest union, the International Association of Machinists, staged demonstrations at five airports. On Friday, pilots at American Eagle, American's regional partner, overwhelmingly rejected a contract proposal.

Additionally, US Airways dispatchers, an often overlooked group, said they now make 25% less than their counterparts at American who will eventually be working by their sides since US Airways dispatchers face the shutdown of US Airways' operations control center in Pittsburgh, scheduled to take place by mid-2016. Dispatchers who want to move have been offered jobs in Dallas.

At US Airways, the IAM represents about 5,800 fleet service workers and 3,500 mechanics. Both groups work under contracts that became amendable 27 months ago on Jan. 2, 2012. They are seeking a release from the National Mediation Board, which would enable them to negotiate with a 30-day deadline.

"We're basically fed up," said Mark Baskett, vice president of IAM District Lodge 141. "We've been in negotiations now for three years. I know they claim there's labor peace. But they obviously are talking about American, not US Airways."

American said its approach is a simple one. "We want to work together to reach joint collective bargaining agreements with all of our unions -- agreements that will benefit the employees of American and US Airways equally," said spokesman Bill McGlashen.

US Airways dispatchers make up another work group that, like the mechanics and fleet service workers, feels American workers got moved ahead of them. "Our members are very unhappy," said Danny Persuit, president of Transport Workers Union Local 545, which represents the 176 US Airways dispatchers.

American dispatchers, who are members of another TWU local, signed a bankruptcy contract that pays about $117,000 annually at top scale, compared with about $90,000 for top-scale US Airways dispatchers, who work 13 additional hours per month.

The dispatchers' jobs include determining, in cooperation with the captain, the appropriate fuel level for departing aircraft. American's dispatcher compensation includes a bonus associated with assuring that airplanes do not carry excess fuel. The bonus accounts for much of the discrepancy in the two contracts. Persuit said it is routinely awarded and should be considered when comparing the two contracts.

In June 2011, US Airways dispatchers signed a contract that becomes amendable in June 2015. The contract includes a 1% pay raise this summer. The dispatchers and the airline are involved in negotiating a new joint contract, but both sides said the other is delaying.

"We have tried to work together on a joint collective bargaining agreement that brings US Airways and American dispatchers under one contract, but the TWU canceled talks after one meeting," McGlashen said. "We're ready (to talk) and look forward to future negotiations."

IAM members feel a release would be appropriate because a 30-day deadline would trigger more intense negotiations. "We want a deadline," said Sean Ryan, general chairman for IAM District Lodge 142. "We feel we can get them to move."



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