Source: AP
Author: David Koenig

Labor Unions at Airlines Gearing Up for Possible Consolidation

DALLAS (AP) -- Airline labor unions are positioning themselves to be decision-makers and beneficiaries if speculation about consolidation in the industry comes true.

Pilots' union leaders at Continental Airlines Inc. said Friday they set up a special group to study possible deals involving their airline, and how they would respond to each potential combination.

At Northwest Airlines Corp., pilots and flight attendants say they would support a combination with another carrier if employees get an ownership share in the new company.

Northwest is reportedly in talks to be acquired by Delta Air Lines Inc., which is also said to be negotiating with UAL Corp.'s United Airlines. The carriers have declined to comment.

Airline employees fear that consolidation could result in fewer jobs and loss of seniority, which is especially important to pilots because it affects their pay and work schedules.

Tom Donaldson, chairman of the Air Line Pilots Association at Continental, said Friday his members would be happy if the Houston-based airline remains as it is, but want a seat at the table if Continental gets swept up in merger mania.

Donaldson said his 5,200 pilots, who took wage cuts in 2005 to help save the airline, expect management to cooperate with it in any consolidation decisions.

"The pilots of Continental must be key in the decision to welcome or reject any merger candidate," he said. "I expect them to keep us in the loop."

A spokesman for Continental said the airline would have no comment.

Chief Executive Lawrence Kellner said last week that Continental, the nation's fourth-largest carrier, prefers to remain independent but that if other carriers grow through consolidation, "we won't hesitate to act aggressively."

Donaldson said in an interview that the union would not automatically oppose any acquisition involving Continental.

"We could be a powerful ally if (a deal) is in our best interests," he said.

At Eagan, Minn.-based Northwest, pilots' union spokesman Greg Rizzuto said they activated a merger committee late last year. Like Continental, Northwest's pilot leaders also say they could support a merger -- it all depends on the identity of the other airline, and labor terms of the deal.

Pilots at Continental and Northwest are both members of the Air Line Pilots Association.

Northwest's flight attendants have said they will demand job protection, more pay and part ownership of any new company that results from a combination.

Analysts say labor groups could use consolidation as a chance to recover some of the wage and benefit concessions they made during a 2001-2005 slide, when carriers suffered huge losses and some, including Northwest and Delta, went bankrupt.

Meanwhile, new tension appeared Friday between labor and management at American Airlines, the nation's largest carrier.

The president of American's independent pilots' union said overzealous cost-cutting would leave the company without enough pilots to staff all its February flights.

Lloyd Hill, president of the union at American, said the problem would be made worse by a spike in pilot retirements next month. Pilots can lock in some of their retirement benefit for 90 days, meaning those who retire next month could limit the loss in value from this month's stock market slump.

American has 12,000 pilots, but Hill wants the company to recall some of the 2,200 who have been furloughed in recent years.

"Our customers are paying the price for management's shortsightedness, and for that we're truly sorry," he said.

Sue Gordon, a spokeswoman for Fort Worth-based American, said the company canceled 28 flights in February -- about one-tenth of 1 percent of its schedule -- mostly on international routes. She said February was typically a lighter travel month, and the company is confident it can rebook the passengers on other flights.