TEMPE, Ariz. — Few, if any, CEOs have been bigger boosters of airline consolidation than US Airways chief Doug Parker.
But Parker wonders if Delta Air Lines and Northwest Airlines apparent combination plans will work, especially if the carriers wait for pilots to first agree who gets seniority.
“It’s going to be extremely hard to get that done anytime soon,” Parker said.
He should know.
Twenty-eight months after Parker’s America West Airlines combined with the former Virginia-based US Airways, pilots are locked in a pitched battle over seniority. Meanwhile, a disgruntled group of pilots is trying to oust the union and rewrite the seniority rules.
With this kind of mess, US Airways pilots say it could take years for them to agree to work under a joint contract.
“Throwing more money at it won’t make it any better, by the way,” Parker said. “All that means is there’s a bigger pie to be split up, and each side thinks the other side is being unreasonable about their share of the pie.”
Tempe-based US Airways has become the latest cautionary tale about airline mergers.
Though it revived a moribund former US Airways and helped the company amass more than $3 billion in cash, the carrier’s 2005 combination has forced its pilots into what many consider an impossible position.
To airline pilots, seniority is just as important as pay. Their place in the pecking order determines what kind of planes they can fly, what routes they’re assigned, whether they can be home for the holidays.
“It means everything,” said Arnie Gentile, a US Airways pilot and former union representative.
Pilots from the former US Airways aren’t likely to give up their seniority without a fight, Gentile said. They haven’t forgotten the billions of dollars they gave over the years in pay and pension cuts to keep the former US Airways afloat.
“We see ourselves at the bottom of the barrel for pay and quality of life issues, and now our seniority is being stripped?” Gentile said.
No airline wants to deal with this kind of a problem for long, said Robert Mann, an airline consultant who represented America West pilots during combination talks in 2005.
“Customers know they get held hostage when employees and management have squabbles: You don’t get good service or your flight’s not on time,” Mann said.
Representatives of the pilots unions for Delta and Northwest Airlines couldn’t be reached Friday to talk about Parker’s comments.
But Ray Neidl, an analyst with Calyon Securities in New York, said it makes a lot of sense to ask pilots to work out seniority issues ahead of time.
“Pilots can destroy your airline after a merger,” Neidl said.
Asking pilots to agree on seniority before a merger puts them on a deadline, which can force both sides to work harder given the financial incentives that come with a combined airline. Without doing so, management will expend much of its energy dealing with pilots, customers service could suffer, and “time could just drag on and deteriorate employee relations as is happening at US Airways,” Neidl said.
A perfect example of that happened earlier this week outside US Airways headquarters.
A few hundred pilots, flight attendants and other union workers marched in front of the entrance, accompanied by a giant inflatable rat holding bags of cash. The rat, pilots said, represented the company’s greed in its offer of minimal raises.
“We have not sacrificed as much as we have to be the bad example of airline mergers,” union leader Jack Stephan said. “People are looking at us today and saying, ‘Don’t do what Parker did.”‘
America West and US Airways pilots were thrown together in 2005 when the carriers combined. They belonged to the same national union, the Air Line Pilots Association, and both sides (America West pilots are known internally as “West” pilots, and US Airways pilots are known as “East” pilots) agreed to work together on negotiating a single contract.
But disagreements over seniority became a primary sticking point between the two groups. The pilots went to arbitrator George Nicolau to settle the matter, but East pilots came away feeling cheated.
The East pilots union sued the West pilots union, seeking to overturn the Nicolau award. The case is pending in a Washington, D.C., court.
Meanwhile, the pilot’s negotiations with management began to stall. East pilots snubbed union picketing events meant to pressure management for a better contract. And then they walked away from contract talks altogether, demanding immediate pay raises before they return.
In November, a group of frustrated pilots formed the US Airline Pilots Association, a rival union. They asked the federal National Mediation Board to hold an election that would allow pilots to pick their collective bargaining organization.
An election is scheduled to take place between March 20 and April 17.