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SCOPE=Leverage for CAL pilots

Twotter Driver

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Pilots contract threatens Continental-United ventures



A little-known pilot contract provision could scuttle two major international initiatives planned by Continental and United Airlines and their Star Alliance airline partners.
The two U.S. carriers, along with Lufthansa and Air Canada, received antitrust immunity from the U.S. government last year to divvy up revenue and closely coordinate flights across the North Atlantic.
Chicago-based United and Continental are using that partnership as a template for a trans-Pacific venture they are forming with All Nippon Airways to compete with that region's troubled juggernaut, Japan Airlines.
However, Continental's pilots hold an effective veto over the deals as a result of a clause in their contract that bars the Houston-based carrier from entering into a revenue-sharing arrangement with another U.S. carrier.
Deep in contract talks with Continental management, the pilots union is refusing to budge on the "scope" language in their collective bargaining agreement.
The stalemate is holding up the full launch of the Atlantic joint venture and would be a barrier to the Pacific deal, sources said. The Atlantic partnership must be fully operating by December under the terms of the antitrust immunity granted by the U.S. Department of Transportation last summer.
"There are a number of open items related to governance and commercial issues that we are working through on the joint venture, including discussions concerning our pilots' scope clause," said Continental spokeswoman Julie King. "The companies and the DOT recognized that there were a lot of issues to be resolved in setting up a joint venture, and that's why the DOT order gives 18 months for the joint venture to be implemented."
The pilots are aware of the clout that they hold as potential deal-breakers and the importance of the international forays to Continental's management. The nation's fourth-largest carrier defected last year to Star from the SkyTeam alliance and formed a close relationship with United that many analysts think is a precursor to an eventual merger.
"I think they're counting on us," Capt. Jay Pierce, head of the Continental pilots union, told the Tribune. "History would probably tell you that's not a bad gamble for them to take. I will say this: We are well aware of the leverage this gives us."
Continental and its pilots have been in contract talks since July 2007 and, after reaching agreement on nine sections, are starting to tackle "hard economic issues" like pay, Pierce said. Scope issues touch all of the hot buttons: pay, management's rights and job security, he noted.


Since Continental is known for healthy employee relations in an industry rife with acrimony, industry observers predict the carrier will find a middle ground with pilots.
"It needs to get worked out," said aviation consultant Robert Mann. "Like it or not, this is where the industry is going."
Many U.S. pilots find the prospect of large-scale partnerships deeply threatening. They worry that carriers are seeking to outsource the long-range flying jobs that are among the most prestigious and highest paying.
American Airlines' pilots oppose its proposed trans-Atlantic alliance with Oneworld partners British Airways and Iberia. While United and Continental pilots didn't try to block Star's Atlantic venture, they want assurances that pilot jobs won't be a casualty of "metal-neutrality," the practice of giving all participating carriers a cut of revenue on a flight regardless of who flies it.
"We do not want a shell operation," said Capt. Wendy Morse, who heads United's pilots union. "We want metal in the market, United pilots being productive in terms of flying their own airplanes and route structure."
That concept is less threatening to Delta Air Line's pilots, who already participate in a metal-neutral venture in the Atlantic and last fall endorsed their management's bid to form a partnership with JAL that would likely have a similar structure. But the pilots have safeguards against flying cuts. Delta, for example, is required to maintain a minimum number of landing slots at Tokyo's Narita Airport for its own aircraft, according to a Nov. 30 union communique.
Proponents of the new ventures argue that they will create jobs and travel growth as passengers in Tokyo or Brussels find it easier to get to destinations like Costa Rica.
"Joint ventures and alliances make us a stronger airline and partner, and create and protect jobs," said United spokeswoman Jean Medina. She estimated that United's alliance with Lufthansa and other partnerships have created or protected 3,000 jobs that would have otherwise vanished.
But this decade's alliances may prove far different than those forged during the past two decades, when global aviation boomed, warned aviation consultant Hubert Horan, a former airline executive who helped form the original Northwest-KLM alliance in 1992.
"These are taking place in markets that are shrinking, not growing," he said. "There's no discussion of how that pain will be shared."
 

mamba20

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No Scope relief. . . . PERIOD! This is the FIRST thing I will look at when the first TA comes out. Middle ground my arse. Our current clause is pretty good but it needs to be updated to protect us from this AND those pesky super turbo props that management is salivating over.
 

UALRATT

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Shouldn't the post read ALPA pilots. I guess not because the personal interest of one ALPA group can and will certaining f uc the other.

From the UALMEC high command...

January 29, 2010

Dear Fellow Pilots,

On December 23rd, 2009, United Airlines filed a request with the Department of Transportation for another anti-trust immunity (ATI) agreement. This proposed agreement would allow United, Continental and All Nippon Airways (ANA) to jointly manage trans-Pacific activities, including scheduling, pricing and sales. This joint venture is the first of its kind between the United States and Asia.

This request for an ATI agreement is yet another step toward the “virtual” airline: A shell comprising upper-level managers, revenue-sharing agreements and faux “United” flights outsourced to the lowest bidder.

The previous United-Continental ATI agreement, the imminent start up of the Aer Lingus-United joint venture, the loss of all United 737 flying, the huge increase in United Express feeder flying, the lack of near term airplane orders, the fact that almost 1,500 of our fellow United pilots have been laid off for an indeterminate number of years (many for the second time) and the ongoing overall shrinkage of United’s size (from more than 100,000 employees to the current total of around 46,000), are a clear demonstration of the current management’s approach.

Undoubtedly the appeal of being able to run an operation that has fewer and fewer employees and drives toward a “virtual” airline is strong in some circles. However, we operate in a different circle and have a significantly different vision for United Airlines. In order for a service provider to survive and prosper, there must be a motivated and recognized employee group. This group of dedicated employees should be treated in a manner which allows them to perform their best. This — not joint ventures such as this proposed ATI agreement — is what will make the enterprise flourish.

Last week I began receiving calls from various contacts on Capitol Hill indicating that United was seeking support for expedited consideration concerning its ATI application with ANA and CAL. Some of these representatives reported that they had been told that United’s unions were “neutral” on this issue. (LYING SACK OF faeces)

On learning of United’s application, I immediately tasked our MEC Legislative Committee to contact congressional representatives and inform them that we are not “neutral.” We stand in opposition to United’s ATI request, and we asked the representatives to refrain from endorsing United’s request. It is inappropriate that anyone at United relay our position without first discussing it with the MEC Officers.

The employee groups at United have proved again and again that we are willing to do the work required to bring United back to the top of our industry. Unfortunately, sacrifices by the employees are met with new and creative attempts by management to outsource more jobs, siphon off more flying, shrink the United mainline and make the careers of those who actually built the airline less secure.

This application for another ATI appears to be the latest move down a road that needs to be modified or redirected if U.S. jobs are to be protected. I have no issue with our fellow pilots at either Continental or All Nippon Airways. Our issue is with the apparent motive on the part of United’s management to use every tool available that results in the diminishing of the livelihoods of United’s pilots and other employees who have made the sacrifices that allowed United to survive, while some at the top reap the benefits.

The United MEC is opposed to the granting of anti-trust immunity to United. We are specifically and strongly opposed to any expedited handling of this process due to ongoing concerns regarding the loss of jobs and the apparent lack of willingness on the part of United’s management to address these concerns in any meaningful way. We will continue to oppose and fight this ATI proposal with all of our legislative resources.
 
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