NEW YORK ( TheStreet) - Hundreds of pilots from United Continental ( UAL - Get Report)and Continental airlines demonstrated on Wall Street Tuesday, protesting the slow pace of contract talks. The pilots say they want Wall Street investors to know that, on the labor front, the United Continental merger is not going as smoothly as the 2008 merger between Delta ( DAL - Get Report) and Northwest. In that case, Delta management "saw the wisdom of including pilots in the process," says Jay Pierce, chairman of the Continental chapter of the Air Line Pilots Association, or ALPA.
By contrast, Pierce said, management has been in no rush to sign a joint contract for the two pilot groups, who instead continue to work under separate contracts signed in 2005. "At Delta, they were inclusive," he said. "They came to labor first (before moving ahead with the merger). If you include labor, things go more quickly." Speaking of
Lee Moak, the former president of the Delta ALPA chapter who now heads ALPA national, Pierce said: "I would love to have the management that Lee had at Delta." Of the pilots' relationship with United CEO Jeff Smisek, he said: "I don't think it's a bad relationship. He just doesn't include labor like Delta did." United has said repeatedly it wants labor merger issues to be resolved expeditiously. "We continue to meet regularly with our pilots, as we do with all of our work groups, to reach agreements that are fair to our co-workers and fair to the company," said spokeswoman Julie King. In an Aug. 15 letter from the carrier's labor executives to pilot leaders, posted on the unitednegotiations.com website, the carrier's top two labor executives have proposed a sped-up negotiating process that would submit any item not quickly resolved to arbitration. After the pilots declined, the carrier's representatives wrote in a Sept. 8 letter that: "We had offered a negotiations process that virtually guaranteed that we would have a joint collective bargaining agreement finished by year-end, delivering improved wages and benefits for our pilots." United and Continental officially merged on Oct. 1, 2010, after announcing merger plan in May.
Pierce contends management is delaying because it cannot fully implement a schedule for a joint work force until a new internal technology platform is completed in the summer of 2012. "We all know a new contract will increase costs, and they don't want to do that until they can mix crews and optimize (aircraft) utilization," he said. If 1,000 pilots do indeed participate, Tuesday's event would be the largest pilot labor demonstration in U.S. history. That befits the world's largest airline, which has about 12,000 pilots. About 250 pilots would march at any one time. Pierce and Wendy Morse, chairperson of the United ALPA chapter, will preside. United pilots wear blue uniforms, while Continental pilots wear black. "We're black and blue," Pierce said. "We feel beat up." In the contract talks, the idea is to merge the two concessionary 2005 contracts, signed when Continental faced bankruptcy and United was in bankruptcy. In general, Continental pilots agreed to more flexible work rules and retained higher salaries, while United pilots took lower salaries and retained more protective work rules. Currently, negotiations have slowed because of scheduling issues, after negotiators have reached agreement on 10 contract sections. Pierce provided this example of a contested scheduling matter: Continental work rules allow pilots to be reassigned during a trip -- for instance, a three-day trip could be extended to six days without pre-trip notice -- while the United contract would not allow that sort of mid-trip change. In general, United wants to maintain the Continental work rules, and pilots don't. Later, pilots will negotiate what is seen as a key issue -- the contract's scope clause -- which defines what flying can be done by outside pilots. In this case, the Continental contract says that Continental pilots must fly all airplanes with more than 50 seats, while the United contract only covers planes with more than 70 seats. Because rising fuel prices are making smaller regional jets less economical to fly, Pierce said the solution is easier than it seems: United could continue to fly the 70-seat planes it has under contract until the contracts expire. After that, the smaller airplanes will go away and mainline pilots will fly all planes with more than 70 seats, Pierce proposed. Currently, three cases involving existing regional flying during negotiations have gone to arbitration. "We won't let them do an end run around the contract," Pierce said. As often happens in labor talks, wages will be one of the final issues. "Wages will be easy quite honestly," Pierce said. "We will bring United rates to Continental rates and then we all get a raise on top of that." --Written by Ted Reed in Charlotte, N.C. >To contact the writer of this article, click here:
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