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United-Continental?s next step: Get the unions on board | Travel Weekly


United-Continental’s next step: Get the unions on board
By: Michael Fabey
September 14, 2010
Now that the Justice Department has signed off on the merger between United and Continental, the real work is about to begin.

The airines said they expect to be fully integrated within about three years, with a single operating certificate in hand by the first half of 2012. About the same time, it expects to implement airport co-locations and better blend or splice its networks.

But the airlines have released no more details about their integration efforts or timeline.

One of the toughest tasks, analysts said, will be getting the unions on board with the integration plan.

Initially it appeared that the airlines’ merger plan had labor support, particularly from the powerful Air Line Pilots Association.

ALPA representatives from both carriers testified before lawmakers in late spring that they felt the merger would be the best move for the airlines and the industry.

But by the end of June, ALPA was wavering in its support for the merger, questioning the airlines’ claims of the benefits of a single, merged carrier, when the carriers and pilots failed to come to terms over the transition agreement. The transition pact spells the basic integration plan for items like seniority while a permanent agreement is ironed out.

ALPA said at that time that promises to make labor concerns a priority in the merger rang "hollow" because of the airlines’ failure to negotiate a transition agreement.

The pilots also have more recently taken a hard-line stance with the carriers regarding regional subsidiaries, saying the new, merged United should end the outsourcing of flying to its regional partners.

Analysts noted the difference in labor relations at this stage of the merger of Delta and Northwest, whose labor groups worked relatively peacefully with management and each other, and the acrimony now building between the planned new United and its pilots.

"The biggest mistake United and Continental made was not getting the union agreements in line before they got the merger through," said analyst Vaughn Cordle of the consultancy AirlineForecasts.

According to analyst Darryl Jenkins of the Airline Zone, an aviation economics website, part of the reason why Delta and Northwest were able to work out labor issues — as well as a more fleshed-out timeline for items such as reservations system integration, livery changes and branding efforts — earlier in the merger process than United and Continental apparently have been able to is because the Delta-Northwest pairing was in the works long before the airlines actually started the official process.

"That was something they were talking about for some time," Jenkins said.

While United and Continental have had on-again, off-again preliminary talks about a carrier coupling over the years, neither airline would commit. The recession delayed the most recent round of discussions as both carriers focused on saving their own individual operations.

The final merger decision came only this spring, the executives said, when it looked like United might merge with US Airways.

The importance of pilot support to an airline combination became apparent this year when Southwest backed off its plan to acquire Frontier because, the airline said, the pilots were unable to work out a transition plan to address seniority and other pilot issues.

There’s little concern that the current differences with their unions will sink the merger plans of United and Continental, but the airlines make no secret of the labor hurdles they now face.

"The successful integration of United and Continental and achievement of the anticipated benefits of the combination depend significantly on integrating United’s and Continental’s employee groups and on maintaining productive employee relations," Continental said in a recent Securities and Exchange Commission filing on the merger.

The document is part of the merger plan made available to stockholders, who are scheduled to vote Sept. 17 on the proposed carrier combination.

United and Continental are highly unionized companies, Continental points out, with more than 80% of United’s 46,000 employees organized under 11 domestic collective-bargaining agreements with six unions.

United is in negotiations with all of its unions for new agreements.

About 60% of Continental’s 41,000 employees are organized, and the airline has five collective-bargaining agreements with four unions. The airline is in negotiations with three of its unions for new agreements.

This report appeared in the Sept. 13 issue of Travel Weekly.

Lambourne

Vaughn Cordle is a UAL scab that was promoting UA/US merger. His airline forecast company is actually a one man show-him. He wants it to sound as if it is a real company. Instead it is just a scabs opinion being quoted.

Also not sure the title is appropriate. Aren't they negotiating and have a roadmap for completion? Can you declare something over that hasn't finished?

Everyone hold their powder. Let's see what happens, stay together and act in a unified manner. This merger is past V1. It is up to us (UA/CO pilots) to work as a crew and get a jcba. I know you left US and thought all was well. As someone mentioned earlier CO has a long line of consolidation events. Each time those guys have had their career expectations adjusted. Look at what has happened industry wide to screw with the careers of all of us in the past 10 years. If I followed the projections when I was hired I would be in a better fleet/ seat. There are no guarantees in this profession.

This career is like deviating around tstms. You'll eventually get to the destination but you have continually readjust your plan. It may take you longer than you thought but you get to the destination.

L

A320fumes

Thanks for shedding light on Cordle. Really didn't have agenda. I just agreed with most of the article.

Lambourne

Yes he is a cretin. As an analyst he shows about as much skill as he did in thinking the UA strike would be won by the scabs. He is a perennial loser that has picked the losing side of the argument more often than not. Unlike a broken clock, Cordle is never right.

Hang in there brother. We are part of the same team and I want us to prosper. We have spent too much time getting flogged by outside and inside sources (alpa, company, faa). It has been proven we can't depend on them. It is up to you, I and all the other pilots at the combined company to make this place the best job in the industry.

L

luv757

It just goes back to Jeffy's ability to say the word "yes" to people that actually do the work to make the airline go. "Yes" you can afford to pay us a wage where we can afford to live a nice lifestyle, "yes" we will have enough time off to enjoy that lifestyle, "yes" there will be enough of us on the crew such that we are not putting ourselves and our passengers in harms way trying to land in a foreign destination after being up all night, "yes" your break on that flight will be in a comfortable lie flat seat, "yes" you will be fed hot food of some redeeming health value while you are moving the airplane.

reddog25

Yeah, like WAY early...about the time RA left NWA and arrived at DAL

Gunfighter

WAY before that. Didn't DAL and NWA declare bankruptcy the same day. It probably started then...

80ktsClamp

I can just see it in BK court:

"so.... what are you guys doing in about 3 years?"

"Nothing."

"would you like to merge with me?"

*bats eyes*

"YES!!"

enuff

Thanks for shedding the light on Cordle. I'll never pay attention to anything that Ahole says again. Scumbag scab.

gettinbumped

What I don't get about Cordle, as I used to not get about Getline before she got canned, is HOW he is allowed to keep spouting his scabness out there like he has a clue what he's talking about. United is very clear to me that as a pilot, I'm not allowed to talk to the media about anything related to United under penalty of death (well, at least termination). So did they give this scab moron idiot a waiver, or are they just looking the other way?

Either way, I hope our new management shuts him up.