ALPA's Woerth wants mergers
 

Pilot union head wants mergers
By John Hughes, Bloomberg News

The U.S. government should let airlines merge to cut capacity and prevent more bankruptcies, the leader of the largest pilots union said.
Most major carriers want to consolidate, said Air Line Pilots Association President Duane Woerth. Companies won't offer plans because the government may take years to decide and reject them, he told reporters Wednesday at a breakfast in Washington.

"It's really not behaving like a deregulated industry when consolidation is denied," said Woerth, whose union represents 64,000 pilots in the U.S. and Canada. "If we're going to be deregulated, let's deregulate, and that means get out of the way."

United Airlines Chief Executive Glenn Tilton on Feb. 17 said he expects consolidation to lead to fewer large U.S. airlines after his company exits bankruptcy because of pressure to cut costs and capacity. AMR Corp.'s American Airlines, UAL Corp.'s United and other major carriers have lost $33 billion in the last four years, in part because excess flight and seat capacity has made raising fares difficult.

U.S. airlines expanded capacity about 7.6 percent last year from 2003 and average U.S. fares declined about 4 percent.

Woerth said the U.S. should declare a "failing carrier doctrine" that lets financially troubled airlines merge without traditional roadblocks. Without that change, executives "think it's a complete waste of time to even talk about" mergers or acquisitions, he said.

A Transportation Department spokesman referred requests for comment on Woerth's remarks to the Justice Department. Justice spokeswoman Gina Talamona said the agency declined to comment.

The last major U.S. airline acquisition was AMR's April 2001 purchase of Trans World Airlines Inc. UAL and US Airways Group Inc., both now in bankruptcy, scrapped a proposed combination in July 2001 because of Justice Department opposition.

Mergers or acquisitions might reduce maintenance, distribution and marketing costs, Tilton told investors at a New York conference Feb. 17, without discussing potential transactions. Gordon Bethune, who retired at the end of last year as Continental Airlines Inc. chief executive, said in a Bloomberg television interview the same day that he expects consolidation "by design" or through industry failures.

Leo Mullin said in a June 2003 speech, five months before he announced his resignation as Delta Air Lines Inc. chief executive, that the government should re-examine a philosophy that has tended to discourage mergers. Growth of low-fare carriers and "competitive drive" from older airlines should diminish concerns that mergers would hurt competition, he said.

"It's really not behaving like a deregulated industry when consolidation is denied," said Woerth, whose union represents 64,000 pilots in the U.S. and Canada. "If we're going to be deregulated, let's deregulate, and that means get out of the way."



Are we really deregulated when there are ATSB loans Backed buy our government? They have their big shoe stuck right in the doorway.

Just my 2 cents.
:cool:

The Fed's will keep that big shoe stuck right in the doorway until the ATA lobbys for a fuel subsidy....then it's a deregulated industry. :p

Cheers -

Its one thing to lobby for relaxed merger rules. But, how about a National Seniority List so those merged carrier pilots don't take it in the shorts. The ALPA merger/fragmentation policy is a joke.

Or as they said in the Curse of the Black Pearl, "They're really more like guidelines."