US Airways Labor Pacts Could Hinder AMR Merger Effort

In the case of US Airways pilots, a snapback provision was considered to be a barrier to a 2010 effort to merge with United (UAL) . In a presentation to pilots that year at the carrier's Charlotte training center, CEO Doug Parker discussed the provision.

"We've had talks with airlines in the past," Parker said then. "This (provision) always comes up. (It) is a large issue in consolidation talks. There will not be a merger if that's where the pay rates go. Anybody we would merge with can't let the pay rates go to those levels.

"You can't have both," Parker added. "You can't have a merger with that provision. (It) will either result in a merger never being done or it will be a merger that doesn't trigger that provision."

Although former leaders of the U.S. Pilots Airline Association were often perceived as obstreperous, in the spring of 2010 they acted to work with the carrier to enable a merger with United, and Parker subsequently praised those efforts.

Parker has said that US Airways has a 10% revenue disadvantage to the Big Three airlines, which have hubs in cities with higher levels of local traffic, and that lower employee costs make up for the revenue disadvantage. A merger would enable better contracts at US Airways, he has said.

"The change of control provision provides US Airways pilots with a tremendous amount of leverage should a transaction occur," said USAPA spokesman James Ray. "In order for US Airways pilots to support a merger, it has to recognize the sacrifices that this pilot group made in two bankruptcies, which put us in the position we are today, where we can possibly make a deal that benefits employees and investors at both airlines."

-- Written by Ted Reed in Charlotte

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