So what more was there to CAL wanting to give XJTs flying to someone else? CAL used SKW to lower our rates. It worked because they had the leverage of being able to cancel the CPA without cause with the drop of 12 months notice and removal of 15 aircraft per month. CAL didn't care who did the flying unless it was for the cheap rates that SKW offered. If the really cared, they would have cancelled the CPA and just started giving the aircraft to SKW under their CPA one year later. Furthermore, I was in the room when I saw and heard JA say with his own lips that to be cost competitive we should take pay cuts of 16% to be in parity with SKW pilot compensation.

When SKW Inc buys XJT, they become party and assume all the contracts that XJT was party to. Also, our contract specifically says that any airline or affiliate of an airline will honor all provisions of our contract including pay, rules, and working conditions. If this wasn't true, he wouldn't have backed out of the deal two years ago!

Successor and Mergers
1. This Agreement shall be binding upon any successor or assign of the Company
unless and until changed in accordance with the provisions of the Railway Labor
Act, as amended. For purposes of this paragraph, a successor or assign shall be
defined as an entity which acquires all or substantially all of the assets or equity of
the Company through a single transaction or multi-step related transactions which
close within a 12 month period.
2. No contract or other legally binding commitment involving the transfer of
ownership or control pursuant to a successorship transaction, whether by sale,
transfer or lease of the Company or substantially all of its assets, will be signed or
otherwise entered into unless it is agreed as a material and irrevocable condition
of entering into, concluding and implementing such transaction that the rates of
pay, rules and working conditions set forth in this Agreement will be assumed by
the successor employer and employees on the then current Pilots’ Seniority List
will be employed in accordance with the provisions of this Agreement. The
Company shall give notice of the existence of this Agreement to any purchaser,
transferee, lessee, or assignee of the operation covered by this Agreement or any
substantial part thereof. Such notice shall be in writing, with a copy to the
Association, at the time the seller, transferor, or lessor executes a definitive
agreement with respect to a transaction as herein described.
3. Unless otherwise agreed, the following provisions shall apply in the event of a
successorship transaction in which the successor is an air carrier or an affiliate of
an air carrier, or a transaction in which the Company acquires control of another
air carrier; and
a. The integration of the seniority lists of the respective pilot groups shall be
governed by Association Merger Policy if both pre-transaction pilot
groups are represented by the Association. If the other pre-transaction
group is not represented by the Association, Sections 3 and 13 of the
Allegheny-Mohawk Labor Protective Provisions ("LPP") shall apply. The
successor or Company, as appropriate, shall accept the integrated
seniority list, including any conditions and restrictions, established
through Association merger policy or LPP proceedings, as applicable;
and,
b. The respective pilot collective bargaining agreements shall be merged
into one agreement as the result of negotiations among the pilot groups
and the successor or the Company. If a fully merged agreement is not
executed within 9 months from the date a final and binding integrated
pilot seniority list is issued, the parties shall jointly submit outstanding
issues to binding interest arbitration; and,
c. The aircraft (including orders and options to purchase aircraft) and the
operations of each pre-transaction airline shall remain separated until
such time as both pilots’ seniority lists are integrated and the pilot
collective bargaining agreements are combined in accordance with
paragraphs D.3.a. and D.3.b., above; and,
d. Pending the merger of the pre-transaction carrier and the pilot collective
bargaining agreements and seniority lists, no pilot on the Pilots’ Seniority
List shall be reduced in status or pay category as an effect of the merger,
purchase or acquisition.
4. The following additional requirements shall be applicable in the event of a merger,
purchase or acquisition involving the Company, regardless of the identity of the
surviving carrier or whether formerly separate operations are to be integrated.
a. Unless and until any operational merger is finally effectuated, the
Association will continue to be recognized as the representative of the
pre-merger Company pilots, so long as such recognition is consistent
with the Railway Labor Act and any applicable rulings or orders of the
National Mediation Board. Recognition of a post-merger representative
shall be governed by the Railway Labor Act and by any applicable rulings
or orders of the National Mediation Board.
b. Subject to applicable securities and other laws and regulations, the
Company will review with the Association the details of any material
agreements relating to successorship transactions in a timely manner,
provided that no financial or other confidential business information need
be disclosed unless suitable arrangements are made for protecting the
confidentiality and use of such information.
c. The Company or surviving carrier, if different than the Company, shall
meet promptly with the Association, upon request, to negotiate the
implementation of the requirements of this paragraph.

 

Very true! I almost forgot that they were planning on taking our ten aircraft CPA and had negotiated a second separate CPA with CAL for another 25 ERJs for their pilots to fly while they furloughed 700 of ours and offered them preferential interviews. Can you imagine interviewing for a position in which if you got hired you would be flying the same aircraft on the same routes you used to but now at first year pay and bottom of a non-union seniority list?

 

That's not what I was trying to to say, I was referring to the previous attempt to buy XJT...he was not party to your contract then when they were trying to get concessions and relaxations.

INC is clearly a party now! Since they will be trying to negotiate a new combined deal with XJT/ASA, expect them to negotiate, not roll over.

But once the deal is done I think they will honor it. Frankly I don't mind the fact that HQ is in SGU...the culture in that neck of the woods makes it harder for a JO or Tilton to come in and destroy the company culture and switch their values around.

 

That's fine if they want to negotiate. But its not a requirement of our contract or RLA to negotiate before joint contract negotiations. He is required to honor our contract until a new joint contract is signed. Honoring our contract equates to merging all three lists and then negotiating a joint contract. Its all spelled out in the section I posted above.

I hope that HQ of the combined company is in SGU as well. It will save even more money then to run two separate HQs.

 

You're forgetting, since 9/11 whenever Yonited says "jump", the aforementioned simply say "how high?"

Tilton doesn't need to take a field trip to SGU.

 

While I think it would be better long term for the pilots to have all the groups merged, I'm also confident from what you posted that Jerry and Chip have all the legal room they need to prevent such a merger from taking place.

Your contract mentions air carriers and their affiliates, but it never specifies that if an affiliate is the legal purchaser that lists at their parent company must also be merged. It only specifies that whoever purchases XJT or is purchased by XJT must merge lists. In this case that means ASA and XJT.

One of the things you will learn as part of the SkyWest Inc. family is that Jerry and Chip don't do anything without doing their due diligence, having a long term plan, and considering all the contingencies. They aren't the short sighted and inept managers that plague this industry.

 

I think you are right that they did their homework on this one but I still feel that this is a negotiating tactic. If they want to keep us seperate then they either need to get lucky by gambling in court or appease us with a better contract. I also remember the CHQ, Shuttle America, Republic, merger that required the merger of all lists that went to arbitration. I dont know the details of it but i have been trying to find info.

 

Thx for the clarification - at first blush the comment did not pass the smell test.

 

This might be the case, only time will tell.

I agree. But in this case I strongly suspect that they are no TOO concerned about SKW getting sucked into a SLI. Several reasons for this...

- During the last union drive JA stated that he wasn't too concerned with the outcome, he did not feel it would be a major game changer to have a pilot union. The reason is that they don't mistreat their pilots more so than other (union) regionals so a union at SKW will not have a lot of room to make improvements without actually damaging SKW's competitiveness...nor will there be tremendous motivation on the part of the pilots to stick it to the company (like say 9E). The PRIMARY reason INC doesn't want the SKW pilots in a union is because it would set a bad precedent for the other employee groups...

- Given the change in NMB policy on union votes, it is MUCH more likely that SKW will go alpa next time around. This is my opinion but I think INC feels that same way (they fought the rule change). Since it's probably going to happen anyway eventually, INC probably did not want to let a potential SLI torpedo or seriously complicate their expansion plans.

They would still prefer SKW remain non-union (or at least delay the inevitable), so they are merging XJT with ASA in the hopes of containing alpa within that entity, but I think that is a fairly low priority in the grand scheme of things. I would give an XJT lawsuit about 50/50 on this...their contract language is not really airtight when you get into holding companies with multiple airlnes, but I think the INTENT of the language is crystal clear. But of course intent doesn't tend to hold up in court in the presence of written contracts which do not articulate the intent well. This is why pilot groups need to hire real professional contract lawyers and not copy/paste some other regional's boilerplate or use some cut-rate drunk shyster whose brother-in-law is on the MEC

 

I don't share your optimism regarding Jerry, but I sure hope you're right. SLI is what needs to happen to assure the well being of all parties long term.

We should get an email from our MEC tonight, I'm curious if the meeting took place with National, the MEC, and Jerry. It will be interesting to see what the outcome of those discussions is going to be. The contract is clear, and in absence of the company honoring the contract, we just go to court...it's that simple. The sentiment among our line guys here at XJT is that we rather see the deal fall through, than cave on scope. Most of us would rather close the doors on this lemonade stand than cave on our scope, and of course we all know that the mother-ship (CAL) will not let that happen for at least 5 more years.