DCA A321 FO

CHARLOTTE, N.C. (TheStreet) -- The pilot seniority ruling in the merger of United and Continental Airlines, reached last week, reflects the impact of the controversial 2007 seniority ruling in the merger between US Airways and America West.
As a result of that ruling by arbitrator George Nicolau, major changes were made to the Air Line Pilots Association seniority integration policy in 2009. "The evolution of ALPA merger policy including, most importantly, the modifications following George Nicolau's award in the America West-US Airways case, is central to the resolution of this case," the three United/Continental arbitrators said in the ruling they issued. "The most significant change in the policy, particularly in light of the decision that prompted the revision, was the express addition of 'longevity,'" or pilot tenure at a merged airline, as a factor in seniority list integrations, the ruling said. In the 57-page ruling, the arbitrators concluded that longevity should account for 35% of the seniority list placement in the United/Continental case, while "status and category," which refers to a pilot's rank as captain or first officer and to aircraft type, would count for 65%. A copy of the ruling was obtained by TheStreet. A spokesman for the United pilots didn't return phone calls.
The arbitrators considered arguments by merger committees from the two pilot unions. Ironically, each four-member merger committee included one member who was a "pilot neutral," participating with Nicolau in deciding the US Airways case.
The finding tilts strongly toward the proposal made by United pilots, who had wanted to equally consider longevity as well as "status and category," while the Continental pilots' proposal would have considered primarily status, grouping all captains together and all first officers together, without considering the category of aircraft. Also, the Continental proposal would have given mainline pilots credit for time spent at affiliated regional airlines.
Arbitrators make it clear they found the United case to be more reasonable and more conciliatory. In one section, they quote the United group as decrying "unreasonable posturing" fueled by "unrealistic expectations." The arbitrators found that "the primary failing of the Continental proposal's use of only {status}, to the virtual exclusion of all other merger policy factors, is that it unfairly, inequitably and disproportionately benefits one pilot group to the consequent detriment of the other."
The problem with the Nicolau Award, according to the United arbitrators, is that it was based on the ALPA merger policy in place at the time. That policy did not include longevity, which was in fact removed largely because United pilots were concerned that they would lose out to more senior US Airways pilots in a proposed merger in 2000. In the future, three factors are to be considered in seniority list integrations involving ALPA carriers. The three are career expectations, longevity and "status and category." They are to be considered "in no particular order and with no particular weight," the new ALPA policy said.
In the US Airways case, the Nicolau ruling generally reflected an effort to blend two pilot groups while maintaining pre-merger relative seniority. But "the pushback and uproar created an environment that was ultimately highly detrimental to ALPA and, unhappily, for the America West and US Airways pilots," the United ruling said. Those pilots "are still suffering the toxic effects," it said.
The impact of the United ruling on the pending seniority list integration between American and US Airways, if that merger occurs, is unclear. Arbitration could rely partially on the precedent set in the United/Continental case, although the Allied Pilots Association and the US Airline Pilots Association have no obligation to follow the lead of a third union. In fact, USAPA spokesman James Ray said arbitration may not be necessary.
"If the merger goes forward, both sides are hopeful we can reach a satisfactory conclusion regarding our seniority integration without going to arbitration," Ray said. "We think it's a real possibility (because) both parties realize the importance of working together for the common good. As history has shown us, when you go through arbitration, you lose control of your destiny by placing your future in someone else's hand."
Mark Burman, a spokesman for the America West pilots, said the United list, "in the end, looks far more like the Nicolau Award than it does anything else" because it is based largely on "status and category."
"The only difference between the two arbitrations is the change in ALPA merger policy which occurred in 2009," he Burman. "Longevity is now a factor. Otherwise, each case turns on its own facts, (so) this award gives positively no basis for USAPA to claim any sort of victory, as the opposite is true."
The US Airways ruling was reached in binding arbitration after both sides approved Nicolau's selection. Its most controversial component placed a 56-year-old pilot with 17 years at US Airways, who was never laid off, behind a 35-year-old America West pilot with a few months on the job. In hundreds of similar cases, "east" pilots with 15 or more years at the carrier went behind "west" pilots with just a few years.
Nicolau, according to sources, was miffed by the refusal of some US Airways union leaders to back off their uncompromising support for a "date of hire" list, which he had no intention of implementing. Afterward, many US Airways pilots felt so disenfranchised by the list that they voted to leave ALPA after 57 years and to create a new union. America West pilots, in a minority, were dragged along.
While the impact of the Nicolau ruling is disparaged in the United ruling, Nicolau himself is referenced respectfully if not reverentially. In fact, the arbitrators declare that "George Nicolau's four basic verities of integrated seniority list arbitration are as apt and vital today as they were nearly a quarter of a century ago," and then list them: "Each case turns on its own facts; the objective is to make the integration fair and equitable; the proposals advanced by those in contest rarely meet that standards; and the end result, no matter how crafted, never commands universal acceptance."

Article Page | TheStreet

Of course they will talk about nic respectfully, he's their bud, but they changed his process.

R57 relay

First of all, let make clear a few things I believe. Overtime guys get pegged as falling into one camp or another because they agree or disagree with something. WD and cacti have me pegged as a rabid USAPA supporter while my reps would laugh at that assertion and at times have felt I was a traitor because I often didn't agree with them.

I think that both sides should enjoy the benefits of a merger and equally share the pain in the bad times. US/AWA was trully a merger, unlike PI/US which was more of a buyout. AWA couldn't buy US, they were facing their of looming cash crunch. The merger brought outside investment to restructure and recapitalize the new airline, maybe most importantly paying of both airlines ATSB loans and getting that organization off of our backs. It has worked very well for the corporation, but we have largely been left out because of our fight.

So, I do think the pilots should benefit from what they can hold and how they move up, I just think that EF's initial placement, and that of the bottom part of the AWA was too high. Because they were placed above so much of the east list that had much more longevity, and because in general that part of the west is younger than those on the east list they were placed by, they have a great acceleration of their relative position. That would give them much MORE opportunities than they brought to the merger and would have expected at AWA.

That's the gist of it. A couple of things I will add. Nic put almost 10% of our list on the top. Shouldn't that carry through the whole list? It didn't. Even though we got the top 10%, I was at almost the same relative position on the Nic list. Over time that has the effect of me not moving up the SL as fast as I would have. It gets worse the lower on the list you go. My friend was hired in 87. Unmerged he would reach #4 at retirement. Merged he would hit #454. with that flattening out of his career going on all throughout. So, delayed getting his left seat BACK. More years on reserve when he did. All the holidays, lousy vacation etc. The west guy slotted right above him was 34 years old(in 2007) and hired in 15 years after him. His career would have been turbocharged at my friends expense. I see that as a windfall at the expense of another.

I think what Gill said years ago in Pan Am/National should have applied to us:

"The ratio that the Arbitrator adopted covers a much smaller portion of the list than the National pilots advocated. In rejecting the National pilots' contention that the ratio should extend farther down the list, the Arbitrator explained that the degree of disparity in length of service between Pan Am and National pilots increased farther down the list and thus, extending the ratio as the National pilots sought would, on balance, result in too great a disparity in length of service between Pan Am and National pilots who would be ratioed together at that point in the list. The Arbitrator also noted that even though those National pilots below the ratio portion would not reach their promotion expectancies until long after the Pan Am airmen on the list near them reached theirs, this inequity was offset by the fact that these National pilots were, on average, younger and thus had more time to reach their expectancies."

So EF should enjoy the benefits of the merger, just not a windfall. We often talk about what a senority number can "buy." Had the Nic been implemented in 2007 then on the first combined bid EF's new number would have been able to buy much, much more than it did a month before and the buying power would increase every year of his career, while that east guys beside him had his decreased.

cactiboss

Usairways doj response page 4:

The harsh reality The harsh reality is that over the last twelve years American lost $10.3 billion and US Airways lost $3.4 billion. US Airways filed for bankruptcy twice during that period and without the merger with America West Airlines would have liquidated.

You see a difference in circumstance? Like arbitrator Nicolau says:

justjack

Without the billions that USAirways pilots sacrificed in pay and benefits USAirways would have never had the chance to MERGE with America West. What then would have happened to America West? Would the merger between USAirways and American ever happen? Who has the crystal ball and who gets to select the arbitrary point in time in the prediction of the future? "Would have, could have" are not terms based on the principles of science. To completely base a seniority list on the spurious correlation of which pilots are closer to demise is absurd and now - at long last, ALPA has decided that the Nic was wrong. (and in this case being only “a little” wrong is like being “a little pregnant.”)You all have repeatedly derided my honest statement that the Nic was simply the last straw. But here it is folks- in the same article. ALPA was made up mostly of United pilots and merger policy at the time was formulated based on the fact that “United pilots were concerned that they would lose out to more senior US Airways pilots in a proposed merger in 2000” -which by the way, was just the direction the wind was blowing at the time an even at that, ALPA ignored the windfall for the West in the Nic. What had ALPA done for the USAirways pilots? Who would not kick them off of the property?

R57 relay

He really doesn't have any choice. Our mess caused all the changes that make CAL unable to do anything about it. It has nothing to do with professionalism.

R57 relay

I read it and they did praise his comments about how SLI's work and turn out, but I don't see any praise for his product. His last SLI fundamentally changed how they are now handled.

R57 relay

More of Parker's words:


"I think that's where this some of this comes from with the "we saved you" stuff. But you got to finish the story.

USAir -- America West was not in dramatically better shape. While we weren't on the verge of, you know, going away liquidating, as I
have said a number of times, I believe without a merger -- well, let me tell you. By putting the two companies together, a lot of new money came in is the answer to your question.

America West did not have the money to go fund the merger or anything close to it. And, indeed, I think America West standalone -- this
is -- this gets some America West people upset because, you know, they -- anyway, whatever reason.But my view is, and a highly educated view
on this point, is that America West would have been bankrupt by the end of 2005. If you recall, by the end of 2005, Delta and Northwest both filed, and I don't think America West could have -- I'm pretty sure -- I'm actually, virtually certain that America West would have filed bankruptcy because we didn't have enough cash to make it through the winter in that environment. So -- and then more importantly, as it relates to America West, the reason the merger was so important to America West is America West was an airline that lived off a cost structure advantage.

Much like I describe to US Airways employees now, how we don't have the same revenue generating capabilities as American, Delta, and
United, who are bigger than us. America West had that in spades.

A Phoenix hub never had the ability to generate the kind of revenues US Airways did, for example. But the airline survived 25 years by having much lower costs, and those lower costs almost entirely labor based.

So what had happened is, is you, you know, looking around the world, here at US Airways, for example, had gotten its labor costs through two bannkruptcies and a lot of pain down to matching America West.

That did not look like a good formula for the America West -- for America West Airlines. You have an airline now that has, not the same ability to generate revenues, and the same costs as the guys who can generate a lot more revenues than you. Those airlines go away.

So whether or not America West would have filed, you know, in late 2005, like I believe, that airline, I'm certain, wouldn't have been able to stand alone on its own in today's environment. You know, much like Frontier, was very -- it's very similar I think to America West. You know, small West Coast, whole -- entirely labor-cost-based cost advantage. And, you
know, Frontier went bankrupt. They are still floating around somewhere, but, you know, they are a fifth of the size they used to be. And I think
that's the best I think America West could have done on its own.

So the merger helped both of us, and in a huge way. I don't think America West would have made it on its own. I'm certain US Airways wouldn't have. And with the merger, what we were able to do -- you know, which, again, I -- I think we should all feel good about -- we were able to go convince
people that, while these two airlines on their own are having trouble, we can put them together and build a real airline, and all we need is cash.

And so will you, Mr. Investor, invest in this?

Now, we found some people who wanted to do that because they didn't want us to go away, like GE, who had a lot of airplanes leased to us, and Airbus, who had a lot of airplanes on order to both companies. So they put in monies because they didn't want to see us go away.


But we found some other, you know, just true equity investors, you know, stockholders that said, yeah, that looks like something that will work. I'll invest in that.

So the money that came to fund the merger didn't exist, and neither airline could have raised it on their own. It only came from the power of the merger.

So the merger saved both of us. So if anybody tells you, We saved you, vice versa, they are wrong. We saved each other. And we saved each
other by merging the two companies and building a stronger airline.

And, again, I haven't had to say this in a few years, but I have said it a lot. And the story has been entirely consistent. So it's a little frustrating to me to have to keep saying it because I, like you, get tired of hearing this stuff."

So if the merger saved and was beneficial to both companies, why should one pilot group get a windfall from it?

DCA A321 FO

.
Oh thank you for saving us. Please come do 25% of our flying and have whiskey dick take a captain slot. My ****ing saviors.

I would have held u a spot in the unemployment line 6 months later. Biotch!

R57 relay

You ungrateful ingrate. Cacti personally went to Parker and advocated the merger with US, even though he knew the powerhouse that was known as America West Airlines had the world by the tail and was destined to kick it's rear. He put that aside that you would have a better future. Have you no shame?

justjack

I watched all five seasons of Breaking Bad on my staycation- I agree with the writer's premise- no one is all good, no one is all bad. Everyone has a price. I don't digress- If Doug Parker had put anything close to a decent proposal on the table at any point over the past five years this thing would be over. A serious proposal would have done two things- first it would have tested the water as to how many folks were ready to deal and second it would have shed some light on the price of peace. But Parker had fallen into the most wonderful ideal situation that he could have ever imagined. Please please spare me the bs re the "Kirby proposal" blah, blah, blah. This has been the greatest boon for management since 9/11 and ALPA did not have policies in place to protect it's members- once again.