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Old 09-28-2010 | 10:36 AM
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alfaromeo
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Default Outside view of SW/Airtran Merger/SLI

I am a Delta pilot who lived through the DAL/NWA merger and tried to learn what I could about mergers. Here are some facts and opinions that you can take with a grain of salt.

First, ALPA merger policy will most likely not apply in this merger. I am sure that both Airtran and SW have clauses in their contracts that in the event of a merger they will have the labor protective provisions (LPP) that are known as Allegheny/Mohawk. Even if their contracts don't have those provisions, the Federal law known as Bond/McKaskill gives those rights to each party.

The LPP's basically say that the standard for integration is fair and equitable, a standard that will mean whatever each pilot wants it to mean. For arbitrators, however, it has very specific meaning. The LPP's say that each side has a right to independently represent themselves and they should attempt to reach agreement through negotiations and mediation. If no agreement is reached, then the issue will be decided by final and binding arbitration.

The Allegheny/Mohawk provisions give no preference to any type of integration, whether by date of hire, ratio, stapling, shoe size, or alphabetically. The standard is just fair and equitable. The five factors (no windfalls, preserve jobs,.....) that have been put on this and other forums are from the OLD ALPA merger policy and will have no bearing on this case. The NEW ALPA merger policy lists longevity, status and category, and career expectations. These will have no bearing on this case because I doubt SWAPA will want to use ALPA merger policy, but these are the factors that play into just about every SLI arbitration so you can probably keep those in mind anyway.

The current school of thought in SLI arbitrations was formed as a result of the Northwest/Republic merger that occurred 25 years ago. The list was done by date of hire which placed people out of order on the list in terms of their current jobs and future job outlooks. The arbitrator tried to fix this by writing a series of 20 year quotas for jobs for each side. This is widely regarded as a huge disaster that led to a series of bitter feuds and arbitrations within the pilot group.

Since it is impossible to predict what this industry will be like a year from now, much less 5 years or 20 years, arbitrators are much more likely to build a list where pilots are mostly where they should be in relation to the other group. By this, I mean that if you theoretically rebid the entire system after the combined list was formed, most pilots would end up in their same jobs. By contrast, if you have a deeply unbalanced list, like a staple job, you could not expect that same outcome from a system rebid. By the way, neither the arbitrator nor the company would allow a complete system rebid, this is just for example on what an arbitrator will most likely look at as a standard for deciding the case.

As for this specific case you have two airlines that are healthy, each with strengths and weaknesses. SWA is very well managed, has a great business model and a great fleet but their business model has to change to adapt to changing conditions. AAI has built up valuable assets such as gates and slots in large business markets, assets that SWA is struggling to get, but they are still small and will find it tougher to compete in a consolidating industry. I think Gary Kelly has a picture of DOT Secretary Lahood sleeping with a goat, because he seems to do their bidding at helping SWA acquire these assets from UAL/CAL/DAL/LCC. Bottom line, you guys can try to trash each others companies all you want but it probably won't matter much to the final outcome.

Each side in this case should remember that eventually you will be one pilot group, you should try to treat each other as brothers and not enemies. My opinion is that the SWAPA pilots have very high expectations from their SLI. Yes you have a better contract now, but 8 years ago your contract was below industry standard, far below. It will be pretty easy for Airtran to make the case that they will reach parity on their own, sometime in the future. Don't get too wrapped up in your own good press that you lose perspective.

Bottom line, each side should probably expect some type of ratio integration where captains are next to captains and first officers are next to first officers. There may be some factors that help one side or the other, but each side should realize that they can spend a lot of oxygen shouting about stuff that will have no effect on the arbitrators. Many of the arbitrators qualified to do these cases have been doing them for 20 or 30 years or more, longer than most of us have been flying airplanes. You have about zero chance of dazzling them with self serving explanations of why the other guys need to get screwed in the merger.

My two cents, I have no dog in this fight, just lived through our merger and learned a few lessons. Good luck.
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