Pilots Head Sees More Dealing As Vote Nears On Ame

PhillyFlyGuy

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Tuesday, September 13, 2005

By Dan Fitzpatrick, Pittsburgh Post-Gazette



Ahead of a crucial vote today on the America West Airlines-US Airways merger, America West pilots union chairman J.R. Baker warned of a second possible merger or "fragmentation" and told rank-and-file members to "be prepared."

Baker knows nothing about any discussions with other carriers or any specific deal that may be in the works, a union spokesman said yesterday in response to Baker's letter, sent to pilots Friday.

Instead, he said the speculation reflects the growing talk about more consolidation in an industry now expected to lose $7.4 billion this year, according to a report issued yesterday by the International Air Transport Association.

The rising cost of fuel is squeezing many airlines. Delta Air Lines is expected to file for bankruptcy protection soon, and Northwest Airlines, still at odds with striking mechanics, plans to start hiring full-time replacement workers.

Analysts predict the union between US Airways and America West could be the first of many as weak carriers look for ways to weather the industry turmoil.

American West shareholders will vote on the proposed US Airways merger from Tempe, Ariz., where it is based, and U.S. Bankruptcy Court Judge Stephen Mitchell Court judge will take up the issue Thursday in Alexandria, Va. Mitchell has to approve US Airways' reorganization plan -- essentially the merger -- for the union to go forward. Day one for the new US Airways could be as soon as Sept. 27.

Even as the merger approaches its final few hurdles, there are reminders of the labor challenges that still lie ahead as the two airlines work to integrate different work forces and cultures. America West's flight attendants union intends to protest today's shareholders meeting over "stalled" contract talks and differences over issues of pay, scheduling and health-care costs.

Meanwhile, US Airways' pilots, mechanics and flight attendants all filed objections yesterday to confirmation of US Airways' reorganization plan.

All three unions objected specifically to a proposal that would grant top executives, including Chief Executive Officer Bruce Lakefield, outgoing incentive packages totaling $12 million. The pilots also claim the plan violates the union's right to appoint a member to the board of directors.

If the merger does not win approval, America West Chief Executive Officer Doug Parker "seems to be considering alternative plans," according to a note from Baker, the America West pilots chairman, who cited comments Parker made to union leaders last week.

A union spokeswoman would not elaborate on the plans yesterday, other than to say "there is some sort of Plan B."

But America West spokesman Carlo Bertolini played down the comments, arguing that Parker referred only to the company's ability to operate profitably as a standalone company.

"We had a lot going for us before the merger," Bertolini said. "We never said it was a do-or-die situation for America West."

Another America West spokesman, Philip Gee, said there is "nothing" to speculation that a merged America West-US Airways might pursue a second merger. "I don't even want to think about merging with someone else at this point," he said.
 
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