General Lee
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Delta Pilots Told of Combination Risks
Delta Pilots Told of Risks of Lengthy Contract Talks in Event of Merger
February 14, 2008: 04:52 PM EST CNN Money
NEW YORK (Associated Press) - The head of Delta Air Lines Inc.'s pilots union told rank-and-file members Thursday that when two carriers seek to combine there are risks to waiting until after a deal is announced to discuss integrating seniority lists and agreeing to a joint contract.
Lee Moak, chairman of the union's executive committee, said once a corporate merger is publicly announced, each pilot group's leadership typically would analyze the deal and decide whether to oppose the deal or enter into the combination process.
If the pilot unions at both companies agree to move forward, they would set deadlines designed to reach a joint pilot contract and an integrated seniority list, Moak wrote in a letter to fellow Delta pilots.
Those negotiations likely would be protracted and contentious, and some issues could end up in arbitration, Moak said.
Moak said that typically at some point after a contract study is complete and union leaders weigh in, direct negotiations with management would begin. That process, too, could be long and drawn out, he said.
US Airways and America West followed the typical approach following the 2005 announcement that the two carriers would combine, but nearly three years later a joint pilot contract has yet to be reached, Moak said.
"As a result, the pilots have been unable to capture any meaningful value from the merger transaction," Moak said in his letter.
Recent media reports have asserted that the pilot groups at Atlanta-based Delta and Eagan, Minn.-based Northwest Airlines Corp. are prepared to have those labor discussions now with their respective companies in hopes of resolving the issues before a combination is announced.
Moak did not say in his letter whether the Delta pilots union was willing to have those discussions now with management or would defer to the typical process of waiting until after a deal is announced. A union spokesman declined to elaborate on Moak's letter.
A person briefed on the combination discussions between Delta and Northwest said last week that the two carriers are inching closer to a combination that would create the nation's largest airline. No deal has yet been reached.
Democratic presidential hopeful Hillary Rodham Clinton said in a statement Thursday that if Delta and Northwest decide to combine, U.S. officials "will have to take a hard look at the potential effects on workers and consumers."
AirTran Airways spokesman Tad Hutcheson said Thursday that the Orlando, Fla.-based carrier would be interested in scooping up gates, slots or facilities that Delta or other carriers would be required to divest in the event of a combination. He said AirTran was particularly interested in assets at congested airports like Hartsfield-Jackson Atlanta International Airport, O'Hare International Airport in Chicago, LaGuardia Airport in New York and Reagan National Airport outside Washington.
Delta has a growing presence across the Atlantic. Northwest has strong routes across the Pacific.
One of the biggest factors driving renewed talk of consolidation has been the sharp increase in fuel prices, among the industry's biggest costs. Jet fuel costs have surged along with the price of oil.
The clock is ticking to get any deals accomplished quickly, some observers say. That's because industry observers believe a combination has a better chance of surmounting the considerable political and regulatory hurdles under the current administration than under President Bush's successor.
Bye Bye--General Lee
Delta Pilots Told of Risks of Lengthy Contract Talks in Event of Merger
February 14, 2008: 04:52 PM EST CNN Money
NEW YORK (Associated Press) - The head of Delta Air Lines Inc.'s pilots union told rank-and-file members Thursday that when two carriers seek to combine there are risks to waiting until after a deal is announced to discuss integrating seniority lists and agreeing to a joint contract.
Lee Moak, chairman of the union's executive committee, said once a corporate merger is publicly announced, each pilot group's leadership typically would analyze the deal and decide whether to oppose the deal or enter into the combination process.
If the pilot unions at both companies agree to move forward, they would set deadlines designed to reach a joint pilot contract and an integrated seniority list, Moak wrote in a letter to fellow Delta pilots.
Those negotiations likely would be protracted and contentious, and some issues could end up in arbitration, Moak said.
Moak said that typically at some point after a contract study is complete and union leaders weigh in, direct negotiations with management would begin. That process, too, could be long and drawn out, he said.
US Airways and America West followed the typical approach following the 2005 announcement that the two carriers would combine, but nearly three years later a joint pilot contract has yet to be reached, Moak said.
"As a result, the pilots have been unable to capture any meaningful value from the merger transaction," Moak said in his letter.
Recent media reports have asserted that the pilot groups at Atlanta-based Delta and Eagan, Minn.-based Northwest Airlines Corp. are prepared to have those labor discussions now with their respective companies in hopes of resolving the issues before a combination is announced.
Moak did not say in his letter whether the Delta pilots union was willing to have those discussions now with management or would defer to the typical process of waiting until after a deal is announced. A union spokesman declined to elaborate on Moak's letter.
A person briefed on the combination discussions between Delta and Northwest said last week that the two carriers are inching closer to a combination that would create the nation's largest airline. No deal has yet been reached.
Democratic presidential hopeful Hillary Rodham Clinton said in a statement Thursday that if Delta and Northwest decide to combine, U.S. officials "will have to take a hard look at the potential effects on workers and consumers."
AirTran Airways spokesman Tad Hutcheson said Thursday that the Orlando, Fla.-based carrier would be interested in scooping up gates, slots or facilities that Delta or other carriers would be required to divest in the event of a combination. He said AirTran was particularly interested in assets at congested airports like Hartsfield-Jackson Atlanta International Airport, O'Hare International Airport in Chicago, LaGuardia Airport in New York and Reagan National Airport outside Washington.
Delta has a growing presence across the Atlantic. Northwest has strong routes across the Pacific.
One of the biggest factors driving renewed talk of consolidation has been the sharp increase in fuel prices, among the industry's biggest costs. Jet fuel costs have surged along with the price of oil.
The clock is ticking to get any deals accomplished quickly, some observers say. That's because industry observers believe a combination has a better chance of surmounting the considerable political and regulatory hurdles under the current administration than under President Bush's successor.
Bye Bye--General Lee
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