February 25, 2011
As you probably know, on February 23, SWAPA and Southwest Airlines announced they had reached a final agreement on the terms of on an initial Transition Agreement, which SWAPA President Steve Chase forwarded to MEC Chair Linden Hillman later that evening. (Talks continue between SWAPA and SWA on a second Transition Agreement, which would cover waivers to Section 1 of the SWAPA CBA, in return for an equity stake for SWA pilots.)
On Thursday, February 24, the Merger Committee, MEC officers, and our legal team held a conference call to discuss the content of the SWA-SWAPA agreement and to review appropriate responses, as well as related merger and transition issues. While the fact that SWAPA and Southwest management were negotiating a Transition Agreement was known, the Merger Committee would like to stress that this Transition Agreement was negotiated and concluded strictly between SWAPA and Southwest management. Despite ALPA’s repeated requests to SWAPA and Southwest management to hold four-party meetings and be included in talks on transition issues, we were not given the opportunity to participate in that process. Consequently, the headline in Southwest’s press release, which reads “Southwest Airlines Announces New AirTran Transition Agreement with Its Pilots' Union,” is highly misleading.
While Southwest management has thus far been unwilling to engage in four-party discussions prior to the Date of Corporate Closure (DOCC), a review of recent merger history shows that four-party transition talks are both legal and customary, and make common sense, for the reasons outlined in the February 13, Merger Committee Update:
“In most mergers, Transition Agreements are four-party documents, entered into by union representatives of both pilot groups and by both managements. Having one agreement that all parties sign helps prevent situations where the transition protections afforded one employee group, or the merger implementation plans of management, conflict with protections of another employee group and disputes, if any, can be efficiently resolved through a coordinated process.”
Unfortunately, an initial reading of the SWAPA-SWA Transition Agreement leaves the distinct impression that the concerns expressed above were well-founded. In fact, it would appear that portions of the agreement may have the potential to create divisiveness and the perception, or reality, of unfair treatment during the transition, a time when the goal of all concerned should instead be to ensure the smooth, transparent, and harmonious integration of the two carriers.
However, AirTran pilots should also know that, while transition talks and four-party agreements are not legally mandated, ALPA, the ALPA Merger Committee and our legal counsel will vigorously assert the numerous merger and transition-related protections already contained in our CBA, beginning with Section 1.D.2, which reads:
“The Company shall require that the Successor or Assign shall, as a condition of and prior to the closing of a transaction as described in Paragraph D.1., above, commit in writing to adhere to the provisions of this Agreement until changed pursuant to the Railway Labor Act.”
As has been previously mentioned, AirTran management has verbally committed itself to complying with its obligation under this section. However, as the DOCC is rapidly approaching, we have reminded our management of this requirement and that if we are not able to confirm, in the very near future, that such a document is executed, your MEC will be forced to resort to the available legal alternatives to enforce our Section 1 rights and to further confirm the contractual obligations of this and any future management at AirTran.
In addition, as has also been previously reported, members of the SWAPA Merger & Acquisition (M&A) Committee will be in ATL on March 1 – 3 to continue talks with the ATN MC, with the goal of concluding a Process Agreement. Although consensus was reached early in negotiations on the majority of that document, the delay in reaching a final agreement is rooted in a disagreement on the issue of how to clearly spell out timelines for implementing a combined seniority list, a single CBA, single bargaining representative, and integrated airline operations.
The unwillingness, to date, of SWAPA representatives to agree to any specific point in time by which the integrated list will be implemented is troubling. While we understand that Southwest management may not have, until very recently, completed its planning on the sequence and timetable for integrating the two operations; a review of recent mergers, most of far greater complexity, leads one to the conclusion that an 18-month integration timeframe, of the sort envisioned in the ATN pilot CBA, is not unreasonable. Indeed, just yesterday Southwest issued a press release announcing that the FAA has approved the carrier’s plan to combine the operations of the two airlines and that management’s goal is to secure and operate under an FAA Single Operating Certificate in the first quarter of 2012. Reluctance on the part of SWAPA to offer clarity on the matter may also be related to the just-concluded SWAPA-SWA Transition Agreement talks, during which integration timelines were being discussed, and now, agreed upon.
But regardless of the reason, the consequences of agreeing to ambiguous language governing the implementation of the Integrated Seniority List (ISL) could be serious, and in the worst case, could lead to an indefinite and indefinable delay in the integration of the two carriers -- despite the obligation to complete that merger as set forth in our Section 1. That is an unlikely, but not an impossible scenario. Instead, a more likely consequence of an imprecise definition of integration timelines might be the temptation it could offer one side to claim that an ISL might never be implemented unless the other side agreed to its terms during the SLI process.
Finally, AirTran pilots should know that the Merger Committee is making every effort to conclude a Process Agreement; that we have never walked out of negotiations; and that we will never agree to language which would undermine the contractual and legal protections of the AirTran pilots. Members of the MEC have expressed their full support for that position, and as we have attempted to do thus far, we will continue to work with ALPA, the MEC, and our team of legal advisors, to provide you with additional details on the SLI and transition process soon as we are able to do so.
