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United Pilot Seniority List Reflects Turmoil After US Airways Ruling

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CHARLOTTE, N.C. ( TheStreet) -- The pilot seniority ruling in the merger of United and Continental Airlines , reached last week, reflects the impact of the controversial 2007 seniority ruling in the merger between US Airways and America West .

As a result of that ruling by arbitrator George Nicolau, major changes were made to the Air Line Pilots Association seniority integration policy in 2009. "The evolution of ALPA merger policy including, most importantly, the modifications following George Nicolau's award in the America West-US Airways case, is central to the resolution of this case," the three United/Continental arbitrators said in the ruling they issued.

"The most significant change in the policy, particularly in light of the decision that prompted the revision, was the express addition of 'longevity,'" or pilot tenure at a merged airline, as a factor in seniority list integrations, the ruling said.

In the 57-page ruling, the arbitrators concluded that longevity should account for 35% of the seniority list placement in the United/Continental case, while "status and category," which refers to a pilot's rank as captain or first officer and to aircraft type, would count for 65%. A copy of the ruling was obtained by TheStreet. A spokesman for the United pilots didn't return phone calls.

The arbitrators considered arguments by merger committees from the two pilot unions. Ironically, each four-member merger committee included one member who was a "pilot neutral," participating with Nicolau in deciding the US Airways case.

The finding tilts strongly toward the proposal made by United pilots, who had wanted to equally consider longevity as well as "status and category," while the Continental pilots' proposal would have considered primarily status, grouping all captains together and all first officers together, without considering the category of aircraft. Also, the Continental proposal would have given mainline pilots credit for time spent at affiliated regional airlines.

Arbitrators make it clear they found the United case to be more reasonable and more conciliatory. In one section, they quote the United group as decrying "unreasonable posturing" fueled by "unrealistic expectations." The arbitrators found that "the primary failing of the Continental proposal's use of only {status}, to the virtual exclusion of all other merger policy factors, is that it unfairly, inequitably and disproportionately benefits one pilot group to the consequent detriment of the other."

The problem with the Nicolau Award, according to the United arbitrators, is that it was based on the ALPA merger policy in place at the time. That policy did not include longevity, which was in fact removed largely because United pilots were concerned that they would lose out to more senior US Airways pilots in a proposed merger in 2000.

In the future, three factors are to be considered in seniority list integrations involving ALPA carriers. The three are career expectations, longevity and "status and category." They are to be considered "in no particular order and with no particular weight," the new ALPA policy said.