How the FAA reauthorization bill may encourage American's unions to want to merge with US Airways
Rumors have been circulating for weeks that US Airways has upped its courtship of American Airlines' unions and creditors, trying to convince them that their idea of merging the two carriers is better than AMR chief executive Tom Horton's restructuring plan.
On Friday, Texas Sen. Kay Bailey Hutchison stepped into the fray with a statement saying merger talks could be disruptive to American's bankruptcy restructuring process. The Allied Pilots Association, the Association of Professional Flight Attendants and the Transport Workers Union fired back, telling politicians to stay out of it.
"We respectfully request that all stakeholders of American Airlines—including lawmakers and everyone else with a vested interest in the outcome of the restructuring—withhold judgment about any industry consolidation that could involve our airline until all of the facts become known," the three union presidents said in a joint statement on Friday evening.
But here's what some of the rank-and-file have been telling me and it all has to do with the Federal Aviation Administration reauthorization bill that passed Congress and was signed by President Obama in February.
One of the big concerns in any airline merger is seniority integration. For example, TWA pilots were extremely upset with how they were integrated or stapled on to the bottom of American's pilots seniority list when TWA was bought by American over a decade ago. And US Airways pilots are still fighting former America West pilots years after the merger of those two carriers.
But language in the FAA reauthorization bill may have alleviated concerns that American's unions might have with merging with US Airways.
Labor unions blasted the bill when it was signed because according to the bill, when two airlines merge, if the larger of the two carriers is non-unionized, then the smaller carrier's workers lose their union representation. The bill also raised the threshold that unions need to petition the National Mediation Board for an election, making it harder for a union to gain representation at a non-unionized airline.
So a merger of the larger Delta Air Lines and smaller American would hurt American's unions. But some American union workers interpret the bill to also mean that a merger of the larger American and a smaller US Airways would be beneficial. Since American is bigger, they infer under their interpretation of the law, American's unions would be retain control of the membership, essentially throwing out US Airways' unions in a merger. As one worker put it to me, this solves the problem faced by US Airways chief executive Doug Parker if two pilot unions had to duke it out for control.
Whether or not this reading of the new FAA reauthorization bill is accurate remains to be seen and I'm in the process of contacting labor experts to see what they think.
And this is all leading up to Monday's court hearing where American will start its Section 1113 arguments in front of U.S. bankruptcy judge Sean Lane.
