US Airways Offer to American Airlines Unions ‘Concessionary’

AIN Air Transport Perspective » July 23, 2012
US Airways chairman and CEO Doug Parker
US Airways chairman and CEO Doug Parker presses the case for a merger with bankrupt American Airlines during a July 18 speech at the National Press Club. (Photo: Bill Carey)
July 23, 2012, 12:10 PM

Conditional labor contracts offered to employees of bankrupt American Airlines by its would-be merger partner, US Airways, provide for only marginal improvements over offers they have received through the bankruptcy process, according to US Airways chairman and CEO Doug Parker. Nevertheless, unions representing American Airlines pilots, flight attendants, mechanics and fleet service workers continue to back the US Airways bid.

Parker argued the case for a US Airways-American Airlines merger during a luncheon speech July 18 at the National Press Club in Washington, D.C. He was joined there by representatives of three American Airlines unions representing 55,000 employees: the Allied Pilots Association, the Association of Professional Flight Attendants and the Transport Workers Union. After American Airlines parent company AMR filed for Chapter 11 bankruptcy reorganization last November, the unions had to negotiate new contracts with concessions. In April they signed conditional labor agreements with US Airways.

During a question-and-answer period following his presentation, Parker refused to accept the premise that US Airways would inherit the same high labor costs that weighed down American Airlines by accommodating the demands of its unions. “The US Airways proposal is significantly concessionary versus where the American employees were prior to bankruptcy,” he said. “It does a disservice to the people at American to suggest that they aren’t giving a lot in this transaction because indeed, they’re giving more than anyone else. The contracts that we have offered to the American employees are only better than even more concessionary contracts that American has offered. They’re not that much different now, as American has increased its offers.”

Parker also acknowledged that US Airways continues “working through integration issues” with pilots stemming from its 2005 merger with America West Airlines, which led to conflict and litigation over seniority rules. Federal legislation passed since then requires that unions from separate airlines in a merger submit to binding arbitration. That process would govern any merger of US Airways and American Airlines, he said.

Parker has argued that the combination of Fort Worth, Texas-based American Airlines and Tempe, Ariz.-based US Airways, the third and fifth largest U.S. carriers, respectively, would create a network better able to compete against Delta and United. American Airlines senior management initially opposed that outcome, but has since signaled its willingness to consider merger options.

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Glenn
on July 23, 2012 - 3:00pm

If the contracts offered by US are no better than what AA is offering, why are AA's unions so smitten with the idea of a merger with US? With the HP/US merger history, one would think AA's unions would be more prudent.

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Phil
on July 23, 2012 - 3:44pm

because AA has a lousy management team!!!

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Bob
on July 23, 2012 - 11:06pm

Simlar terms than AA. Wonder what kickers are in the contract to make the unions all buddy, buddy with US Air.

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AirBoss
on July 23, 2012 - 3:26pm

Parker and Kirby conveniently dodge the fact that the Nicolau Award covering East/West pilot seniority integration resulted from binding arbitration. The McCaskill-Bond process (born of the TWA/American merger) is of no practical difference.

"Parker also acknowledged that US Airways continues “working through integration issues” with pilots stemming from its 2005 merger with America West Airlines, which led to conflict and litigation over seniority rules. Federal legislation passed since then requires that unions from separate airlines in a merger submit to binding arbitration. That process would govern any merger of US Airways and American Airlines, he said."

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Jorge
on July 23, 2012 - 5:55pm

Almost all, employees and customers, are awaiting for this merge to happend in order to create the best American Airline in the world, the actual AA managment and CEO are the worst in the industry, including all Station Managers arround! They are self center, selfish and blood suckers! Our prayers and hopes that US Airways team takes over very soon AA!

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Bob
on July 23, 2012 - 11:18pm

If US Air is offering the same deal as AA, then they should immediately do the same for their employees. Or is wheelin, dealin Parker fine with shafting those who already work for him. He pretty much admitted that Phoenix operations will die. What's next.

I wonder what he did promise the unions. Let's put the contracts on the table so we can compare.

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Sarah
on July 24, 2012 - 11:20am

Most US employees have learned the hard way not to trust anything that comes out of Doug Parker's mouth. Many jaws dropped to the floor when he announced deals with AA's unions although our contracts have not been settled after many years. It is downright irritating that once again US employees are forced to play second fiddle to Doug's big dreams.

http://www.firedougparker.org/

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Trent
on July 24, 2012 - 9:28pm

Analysis: US Air/ AA flight attendants. Keep it simple we all know that Horton and Parker are friends. I seldom agree with Parker but he does want the airline to succeed and move foward. Now Horton, all he cares about is putting 30 million in his pocket which will happen when AA comes out of bankruptcy court. The best thing that can happen is if the two merge especialy for the flight attendents union which is the weakest of the unions with very little negotiating power. Also don't be fooled your pilot union brothers could care less about you guys especially with that 13.5 % heading their way. They are going to ratify the contract, it's a done deal. Mechanics Union as well. Flight attendents the merger is the best thing for you, good luck with your vote.

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