No Pact Yet for US Air Pilots

A ruling on seniority threatens full operational implementation of the America West merger.
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A controversial ruling on seniority integration for pilots at

US Airways

(LCC)

and the former America West Airlines is threatening to delay the full operational implementation of the airlines' merger.

The May decision by a federal arbitrator came after an interpretation of the merger policy of the Air Line Pilots Association. Many pilots at the former US Airways say it favors less experienced pilots at America West, and they may seek to delay or prevent it from going into effect.

"A specific goal of the ALPA merger policy is to avoid windfalls to one group at the expense of the other, but this integration policy does not do that," says Arnie Gentile, spokesman for the US Airways chapter of ALPA, which for now remains separate from the America West chapter.

Last month, US Airways pilots convinced ALPA's executive council to postpone passing the arbitrator's seniority list to the company, which would have implied endorsement. The next step is unclear, but various scenarios are possible, and most of them are time-consuming.

For instance, US Airways pilots could move to leave ALPA. Or they could seek to delay the pact on a joint contract, which must come before members of the two groups can work together in the cockpit or fly aircraft from the other carrier.

To get an idea of how tedious the process can be, consider that at

UPS

(UPS) - Get Report

, it took four years to reach an agreement on the contract signed last year, partially as a result of intraunion battles.

Bill Swelbar, a research engineer in MIT's International Center for Air Transportation and an airline industry consultant, says US Airways pilots have made sacrifices in salary, schedule and pension benefits, and now face making more. But to impede the merger process would raise questions about future combinations, which "would be harmful to labor long-term" Swelbar says.

"The restructuring of the airline industry is not done," he says. "It will have to involve more consolidation. But any management out there is fearful of seniority integration. And unless there is some sort of template to follow, a lot of people are not going to think about mergers of any sort."

The alternative, he indicates, would be allowing a struggling carrier to shut down.

US Airways and America West merged in September 2005. Last year, the combined airline was the industry's most profitable. The accompanying euphoria led CEO Doug Parker, who formerly headed America West, to pursue an unsuccessful merger with

Delta

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that would have created the world's biggest airline.

For the two companies that now make up US Airways, the merger of their reservations systems created severe disruptions, delaying the move to a joint operating certificate -- once expected in June -- until the fall. The seniority ruling poses another challenge.

Currently, three sides are negotiating to combine the America West contract, which became amendable in December, and the US Airways contract that would run until Jan. 1. Last month, the airline offered to raise the America West pilot pay scale by 3%, while boosting US Airways pilot pay as much as 17% in order to equalize the two.

If there is one thing the two pilot groups agree on, it is the proposal's inadequacy. "Dead on arrival," says Gentile. Tanya Bziukiewicz, spokeswoman for the America West ALPA chapter, says it is "concessionary on the America West side," because pilots give up benefits to fund pay raises for US Airways pilots.

US Airways has about 2,400 pilots, as well as 1,500 on furlough. The average age of the pilots now flying is 53. America West has about 1,800 pilots, with an average age of 47.

The proposed seniority formula sorts pilots by aircraft type. Within each grouping, pilots are ranked by seniority at their airline and by a ratio based on how many aircraft each carrier has. Under this formula, the top 517 pilots come from US Airways.

At the next level are about 1,000 US Airways first officers who would likely never become captains because they must retire at 60 and captain seats won't open before then, says Gentile. "Most of our first officers with 20-plus-years experience will not be on the property long enough to make captain because of six-year and seven-year first officers at America West," he says.

Additionally, US Airways pilots get no credit for time spent on furlough or flying at defunct US Airways division Mid-Atlantic Airways. The most senior Mid-Atlantic pilot, hired in 1988, falls below the most junior pilot at America West, who was hired in 2004, Gentile says.

Bziukiewicz said the ruling "was put together by a neutral arbitrator, chosen by pilots from both groups, who reviewed thousands of documents and exhibits and heard testimony from numerous people. It is final and binding."

The arbitrator, George Nicolau, previously resolved seniority issues in US Airways' purchase of the Trump Shuttle roughly a decade ago, she says.