Airline merger lawsuit returns workers to familiar uncertainty

  • Article by: ELY PORTILLO , Charlotte Observer
  • Updated: August 21, 2013 - 9:32 PM

The Justice Department’s opposition has unions considering putting pressure on lawmakers.

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The U.S. government last month sued to block the merger between US Airways and American Airlines.

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About 108,000 US Airways and American Airlines employees left in limbo by a U.S. Department of Justice suit that has stalled a long-planned merger are considering picketing and other actions to pressure politicians to support the deal.

Last week’s action by the Justice Department shocked airline executives and industry watchers who had expected the merger to win antitrust approval easily.

One of the deal’s major selling points was that the major unions representing workers at US Airways and American had agreed to support the deal, which airline executives said was a path to greater career stability and higher pay at what would be the world’s largest airline.

Roger Holmin, president of the master executive council for the Association of Flight Attendants, said many US Airways flight attendants feel left in the lurch.

“The average worker, they don’t know what their future is going to hold,” he said. “We have had a positive outlook for a few months here. People embraced it. They have been looking forward to being part of the world’s biggest airline.”

The AFA represents US Airways’ 7,200 flight attendants. Like some of the other airline unions, it’s working to put public pressure on lawmakers to allow the marriage to go forward. Holmin said union leaders are meeting this week to decide whether to take steps such as picketing or filing a brief in support of the merger in court.

The Association of Professional Flight Attendants, which represents American’s 18,000 flight attendants, is asking its members to contact Texas Attorney General Greg Abbott — who joined the Justice Department’s lawsuit — and ask him to back off. The Allied Pilots Association, representing the 10,000 American pilots, took out a full-page ad in the Dallas Morning News asking Abbott to drop out of the suit.

A major part of the executives’ pitch to approve the deal was that there would be no job cuts below the executive level, and that employees would have greater opportunities for career advancement and higher wages in a company with higher revenue. US Airways management won the support of American’s unions early to help pressure American’s management to merge.

“We are certain that our proposed merger is the best path forward for both airlines and all of our stakeholders,” US Airways spokeswoman Michelle Mohr said in an e-mail this week.

The new uncertainty goes from top to bottom at the airlines. US Airways CEO Doug Parker reportedly moved to the Dallas area, which was set to be the combined airline’s headquarters. And the airlines have already announced executive teams at the combined airline, which means corporate workers who had been told they would lose their jobs when the merger closes must now decide whether to look for new jobs or stay and see whether the merger happens.

Other workers are also in limbo across the country. A US Airways flight operations center in Pittsburgh that employs 700 people, which many analysts had expected to close after the merger, would remain if the merger is blocked. In Tulsa, Okla., the Tulsa World reported that American maintenance workers who had been counting on $12,000 to $15,000 stock payouts later this year now don’t know whether they’ll receive them.

Although Parker said he thinks the companies will defeat the Justice Department in court and close the merger later this year, analysts say it’s far from certain that the merger will go forward. There doesn’t appear to be any room for the airlines to compromise with the Justice Department by agreeing to divest landing slots or routes, meaning the issue probably will be settled in court.

The Justice Department said the merger, which would bring the number of major U.S. carriers down from five to four, would reduce competition significantly and force consumers to pay higher fares and fees.

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