Why does it make sense to split East West vs. an intra East split? The answer lies in the respective sections of each collective bargaining agreement. Section 1, East is a robust section. It represents a history dating back to 1950 when ALPA was first on the property. It has substantial protections that have survived two bankruptcies. Some significant provisions of this section include:
SECTION 1 - RECOGNITION, SCOPE, SUCCESSORSHIP AND LPPS:
5. Restrictions on code share with domestic carriers.
6. Restrictions on code share with international carriers.
C. Successorship and Labor Protection – Allegheny Mohawk 3/13 provisions
Change in Control – 50% or more of effected assets and triggers a 4.5% raise for each year after.
(F) Other protections – 20% of assets, within 12 months, sells transfers or disposes – the Association shall determine at its sole discretion where the pilots go.
LOS 63-Contingent Acquisition Rights – CAR’s - Payment and Board Representation Rights: On the day immediately preceding the occurrence of an Acquisition Triggering Event, the Company shall pay into an escrow account (in form and substance satisfactory to ALPA with an escrow agent subject to approval by ALPA) to be released to ALPA upon the occurrence of an Acquisition Triggering Event, $250 million to be allocated among pilots as determined by ALPA ( LOA63)
McCaskill Bond Provisions
(4) COVERED TRANSACTION- The term `covered transaction' means--
(A) a transaction for the combination of multiple air carriers into a single air carrier; and which
(B) involves the transfer of ownership or control of--
(i) 50 percent or more of the equity securities (as defined in section 101 of title 11, United States Code) of an air carrier; or
(ii) 50 percent or more (by value) of the assets of the air carrier.
(d) Application- This section shall not apply to any covered transaction involving a covered air carrier that took place before the date of enactment of this Act.
(the west could be spun off without trigger this requirement of the amendment.)