Here's how many Midwest pilots see this deal from the unemployment line...
Additionally, the Frontier pilots contend that they will remain separate, claiming that Republic CEO Bryan Bedford has maintained that this is also his goal. This is consistent with Article 9, §9.01 (a) of the August 13, 2009, second amended and restated investment agreement between RAH and the Frontier entities which provides that, once Frontier emerges from reorganization and RAH takes over ownership:
“Subject to the provisions of the Railway Labor Act, upon the Closing, the Investor will (i) be bound by the current Collective Bargaining Agreement between Frontier Airlines and the Frontier Airlines Pilots Association as amended and in effect as of the Closing (the “FAPA CBA”), (ii) recognize Frontier Airlines Pilots Association as the representative of Frontier Airlines pilots and (iii) assume employment of such pilots represented by the Frontier Pilots Association. Upon and after the Closing, the Company shall continue to be responsible for implementing and carrying out its obligations under the FAPA CBA.”
This provision in the RAH-Frontier investment agreement appears to be in breach of the IBT's agreement with Republic which states:
Article 1. D.
3. The Company, Subsidiary of the Company, the Company’s Parent or Subsidiary of the Parent shall not establish any new airline (alter ego or otherwise) or acquire a controlling interest in any carrier whether directly or through the Parent or another Subsidiary of the Parent, and maintain it as a separate carrier. A “Controlling Interest” or “Control” means the ownership of an equity interest representing more than fifty percent (50%) of the outstanding capital stock of an entity or voting securities representing more than fifty percent (50%) of the total voting power of outstanding securities then entitled to vote generally in the election of such entity’s board of directors or other governing body.
Recently, I received a letter from the Republic pilots informing us that, “The Teamsters are filing a Grievance against Republic Airways Holdings for the violation of our scope, in respect to the LOA which has been ratified between it, Frontier Airlines, and FAPA.”
Unfortunately, the Midwest pilot group is aware of just how long this process can take. Furthermore, we have no idea which party will prevail. Meanwhile, in reviewing the Republic pilots’ CBA more closely, RAH’s actions in replacing Midwest’s flying with Republic’s equipment and pilots is in violation of the IBT contract:
H.5.
c. The operations of the Company and those of the other air carrier shall be kept separate unless and until the processes described in paragraph b above is completed and the seniority lists of the two pilot groups are integrated in accordance with Sections 3 and 13 of the Allegheny-Mohawk Labor Protective Provisions are completed. During such time of separate operations, neither aircraft nor pilots shall be interchanged without the Union’s written consent.
After the Republic pilots rejected our request to work together to choose an arbitrator and begin the process, we determined that it was in our pilot group’s best interest to move forward. Your Merger Committee—along with our outside merger counsel, John O’Brien Clarke of Highsaw, Mahoney, and Clarke—chose Mr. Frederic R. Horowitz as the arbitrator. He has agreed to hear our arbitration and we expect our first meeting the week of September 21, 2009. While we continue to make every effort to engage the Republic pilots in working with us, be assured that we are taking every legal action necessary to keep this process moving forward.