United and Pilots Have Contract Deal, Easing Merger Integration
CHICAGO (TheStreet) -- United (UAL) and its pilots have reached an agreement in principle on a new contract, ending a simmering dispute that has stalled progress on the 2010 merger between United and Continental.
The agreement is a major step for a carrier where operations have suffered dramatically due to a so far uneven merger integration. In recent weeks, Wall Street analysts have been reducing estimates and downgrading the shares. A tentative contract deal with pilots is likely to restore confidence in the carrier's ability to successfully complete the merger process.
The Air Line Pilots Association "reached agreements in principle with United Continental Holdings Inc. management on all major economic and scope provisions of the joint collective bargaining agreement after two years of bargaining and with the assistance of the National Mediation Board," said Jay Hepner and Jay Pierce, chairmen of the Air Line Pilots Association chapters at United and Continental, in a letter to members on Thursday night.
"Work remains on some non-economic issues that will continue in the days ahead," the pilot leaders said. "But the joint negotiating committee is confident that, with the continued support of the NMB, we can reach satisfactory agreement on those as well."
The letter said terms of the agreement must be converted to a tentative agreement, a time-consuming process because the language will be "drawing upon provisions from the current (collective bargaining agreements} of both Continental and United, and from other concepts that exist at other carriers." Then leaders of both pilot groups will review the language before a ratification process begins.
In a prepared statement, Fred Abbott, United senior vice president of flight, declared: "This agreement follows intense negotiations with our pilot group and is an important step forward for our company."
United thanked negotiators for both sides and the National Mediation board for working to secure an agreement.
-- Written by Ted Reed in Charlotte, N.C.
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