If America West Airlines and US Airways merge, the biggest hurdle facing the new company will be blending employees from the two carriers, analysts say.
Pilots and flight attendants at both airlines are represented by the same labor unions, but a partnership could get sticky when seniority lists are melded, experts say.
Mechanics and customer service employees belong to different unions at each airline, presenting a big challenge when it comes to agreeing on salaries and work rules, they say.
"If it’s a full-blown merger, it’ll be like a meeting of exwives," said Mike Boyd, an airline consultant with Coloradobased Boyd Group. "It will be truly terrifying to behold. Keep in mind, at US Airways, I think probably the most junior pilot there has 17 years. The way the Air Line Pilots Association works, they’re going to get shoved right on top of America West pilots, who aren’t going to be happy."
Another issue, Boyd said, will be where to place furloughed US Airways pilots who were hired by the regional jet partners of the two airlines. One of the partners is east Phoenix-based Mesa Air Group.
US Airways has roughly 3,000 active pilots and more than 1,500 on furlough. Another 400 work for regional partners. America West has about 1,900 pilots. Both groups are represented by ALPA, so there are rules in place should a partnership materialize.
"Our national union has a policy that sort of lays out the process of seniority integration of two ALPA carriers," said Jack Stephan, US Airways pilots spokesman. "We’re sort of playing under the same rules and in that sense, it makes it, not easier, but there are no surprises."
Observers say the US Airways pilots will have advantages in an all-out merger because they’re a larger group at a older airline than at Tempe-based America West, which began flying in 1983. Union heads have mostly been mum concerning the fallout should the two airlines hook up, preferring to reserve judgement until either a deal is struck or talks break down.
But recent actions show they’re readying for a showdown.
America West pilots replaced their union leadership last week with representatives who are pledging to vigorously protect the interest of the company’s pilots. Some of those chosen have been critical in the past of the national union, arguing they have done little at the bargaining table.
Industry insiders and media reports have said any deal between America West and US Airways would likely involve returning some airplanes, possibly resulting in layoffs. Under a contract that allows for one person, one vote, America West pilots would be outnumbered by the larger US Airways union, they say.
Numerous reports speculate the merger would result in a holding company and the two airlines would be subsidiaries while operations are slowly combined. Once operations are merged, industry watchdogs say US Airways labor agreements will be the surviving labor agreements, which could result in contracts that aren’t as productive and efficient as America West.
US Airways union pilots will meet Thursday and Friday to consider hiring merger counsel and an investment banker. Staffing-up a merger committee is also on the agenda.
Stephan said the meeting concerns US Airways potential deal with regional carrier Republic Airlines, which has an option to invest $125 million in equity when US Airways exits bankruptcy protection. Under the deal, US Airways would sell 13 70-seat regional jets and assign leases to an additional 15 to Republic Airways Holdings Inc.
But Stephan expects America West to come up during the meeting, too
"Are we going to be discussing things with America West? I’m sure somebody is going to ask a question about that," he said. "If we get involved with a future transaction, should it be America West or anybody else, we’d have to do this anyway."
Flight attendants at both airlines are members of the Communications Workers of America. A union leader told the Pittsburgh Post-Gazette that integrating the two flight attendant forces would not be a problem because about 1,000 US Airways attendants are leaving the company by the end of the year, all of them with more than 15 years of experience.
Mechanics and customer service representatives at America West are members of the Teamsters. At US Airways, mechanics belong to the International Association of Machinists and Aerospace Workers, and passenger service agents are represented by CWA.
"Politically, IAM has lost most airlines and they’ve lost representation of most airline mechanics to another union, so they’ll fight this one tooth-and-nail to make sure they’re the survivor," Boyd said.
At Teamsters Local 104, Andy Marshall said he has not yet contacted union officials at US Airways.
"We’ve had contact from US Air employees who are concerned about the concessions that were granted by the bankruptcy judge," he said. "Obviously, there has been no concessions on the America West side. It’s just speculation on my part but it’s human nature when you give up things, you’re not too happy with your union. They’ve severely gutted both of those contacts (IAM and CWA)."