United and Continental Talking....

[densoo]

United has for the most part just stayed United. CAL on the other hand is a mix of all different backgrounds.

And this is going to make all the difference. When each side hires the best experts they can to crunch the "career expectations" numbers and present them to the neutral party, from what I've seen at CAL, I just don't think CAL can go toe-to-toe with UAL in this scenario and get any kind of a fair deal.

Heck, CAL pilots have had how many changes of leadership (union and otherwise) in the pilot group in the past 10 years? They can't even get it together and stabilized within the pilot group, much less get an equal shake vs management in the last contract, or a fair deal vs UAL ALPA. Just last week a new LEC was voted in at IAH. Nothing is settled at CAL.

UAL ALPA won't be looking for a "fair deal" and they shouldn't. They will come to the table with the most expensive, professional, cut-throat group of dispassionate representatives they can hire to get the absolute most they can. Unless CAL looks at it that way too so that the neutral party can reach a fair compromise, the compromise will be all CAL's.

 

[Plug]

Percentage integration. Andy, you are at about 93% on the UAL list and I am about 96% on the CAL list, you would be senior. Put up a 5 year fence and call it done!

 

[pkober]

This will be interesting. CAL has captains right now with DOH junior to UAL pilots still on furlough. So a furloughed UAL pilot gets to come back from furlough to captain? If you're UAL ALPA, yes. If you're CAL ALPA, well, can they fight the inevitable renewal of the "torque" campaign of the early 90s?

I would say that a furloughed pilot isn't currently working for the company and would be put at the bottom of the list and recalled before and additional hiring.

I hope this thing is just smoke and mirrors.

 

[Sonny Crockett]

I think this will happen (UAL-CAL) merger.

At least you CAL guys seem more civil about it then the USAir boys back in 2000.

Time will tell I guess?

 

[Flybwoy]

Just As I Posted 6 Months Ago. And All Said I Was Crazy. I Only Post The Facts!! No Rumors Here! Im In The Know!!!

 

[Andy]

I know you were'nt speaking for all of us but I have to point it out again.......that you're not speaking for all of us.

I only speak for myself.
I know that I'll never be on UALALPA's merger integration committee.
Any seniority integration, should this merge occur, will ultimately be decided by an arbitrator.

Out of every other airline that is a potential dance partner, I think that CAL is the best fit due to minimal route overlap.

 

[General Lee]

I only speak for myself.
I know that I'll never be on UALALPA's merger integration committee.
Any seniority integration, should this merge occur, will ultimately be decided by an arbitrator.

Out of every other airline that is a potential dance partner, I think that CAL is the best fit due to minimal route overlap.

Minimal route overlap is the key, since AWA/US was approved because of that. The only CAL conflict I can see is the CLE base, being so close to ORD. But, every merger potential merger has one or two hot spots. Look at CVG for DL. It would likely be gone if we merged with USAir (PIT, PHL close by), NWA (DTW next door), and UAL (ORD next door).

Other than CLE, I think UAL/CAL would be a good fit.


Bye Bye--General Lee

 

[Captzaahlie]

huh?...........

 

[General Lee]

huh?...........

Are you 4 years old? You sound like it. Self portrait?


Bye Bye--General Lee

 

[fatboyplt]

There are are alot of smart people on both merger committees. This is all speculative right now so do not get your nickers in a wad. I personally believe BOTH groups bring much wealth to the table. Because of that very point hopefully as Crokett said there would be civility overall. Unlike the potential lopsided debacle in 2000 aka the US AIR deal.
As has been said before, there are many decent scenerios for integration if a deal comes to pass.

Birdman
BTV

 

[CAL EWR B737]

And this is going to make all the difference. When each side hires the best experts they can to crunch the "career expectations" numbers and present them to the neutral party, from what I've seen at CAL, I just don't think CAL can go toe-to-toe with UAL in this scenario and get any kind of a fair deal.

Heck, CAL pilots have had how many changes of leadership (union and otherwise) in the pilot group in the past 10 years? They can't even get it together and stabilized within the pilot group, much less get an equal shake vs management in the last contract, or a fair deal vs UAL ALPA. Just last week a new LEC was voted in at IAH. Nothing is settled at CAL.

UAL ALPA won't be looking for a "fair deal" and they shouldn't. They will come to the table with the most expensive, professional, cut-throat group of dispassionate representatives they can hire to get the absolute most they can. Unless CAL looks at it that way too so that the neutral party can reach a fair compromise, the compromise will be all CAL's.

I've got to raise the BS flag on this one.


It's not up to the pilots on this forum or either airline to debate other than for speculation and it has absolutely not bearing on the ultimate outcome. With the leadership change in IAH our MEC is now solid and no weaker than our UAL counterparts. I worked my a@@ off as the EWR lead in the IACP/ALPA merger campaign most importantly for one reason ALPA merger policy.

ALPA merger policy is a fair process that will be ultimately determined by a neutral arbitrator period. Based on the equities each party brings to the table nothing more and nothing less. By the way our merger committee and counsel are as good as any in the business.

I was one of the principals involved in the Super Bowl Sunday 98 potiental merger with DAL. I can tell you back then the CAL pilots would have been screwed period. Today is a whole different ball game.

 

[densoo]

It's not up to the pilots on this forum or either airline to debate other than for speculation and it has absolutely not bearing on the ultimate outcome. With the leadership change in IAH our MEC is now solid and no weaker than our UAL counterparts. I worked my a@@ off as the EWR lead in the IACP/ALPA merger campaign most importantly for one reason ALPA merger policy.

ALPA merger policy is a fair process that will be ultimately determined by a neutral arbitrator period. Based on the equities each party brings to the table nothing more and nothing less. By the way our merger committee and counsel are as good as any in the business.

I hope you're right. My comment was in response to this:

United has for the most part just stayed United. CAL on the other hand is a mix of all different backgrounds.

Here is a release today, the very day the rumors started flying, from UAL ALPA. Where is CAL ALPA's response?

And this is my point. If CAL ALPA doesn't start planning now, UAL ALPA is likely be to on top and in front of the issue from rumor all the way to seniority list integration. They already are responding to their constituency.

Admittedly, there isn't alot of new info in this release, but it is a communication, direct and immediate, to the pilot group. This kind of thing indicates unity, and unity translates into bargaining strength, whether with management or with another pilot group or in front of neutral arbitrator.

December 13, 2006

Dear Fellow United Pilot:

It has come to the UAL-MEC Merger Committee’s attention that there are some serious misconceptions and blatant misstatements floating around concerning the seniority integration process should United merge with any other airline. Specifically, the suggestion has been made that the United Pilots would be better off if they were not in ALPA in the event of a merger. Nothing could be further from the truth.

As we have said in our document that we published earlier entitled Merger 101, ALPA Merger and Fragmentation Policy governs in the event that ALPA represents both pilot groups. ALPA’s Merger and Fragmentation Policy contains a detailed process, which ultimately leads to an integrated seniority list, whether that seniority integration is achieved through negotiations, mediation or in final and binding arbitration. The standard, or test, contained in the policy provides that the lists are to be integrated in a “fair and equitable” manner.

That “fair and equitable” test has been the ALPA standard for decades. It finds its origins in the so-called “Labor Protective Provisions” (“LPPs”), which the old Civil Aeronautics Board (CAB) historically imposed on carriers as a condition of the merger. The last time the CAB modified their terms was in the Allegheny-Mohawk merger, which occurred in 1971. Section 3 of the LPPs required that the seniority lists of each class or craft of employees be merged in a “fair and equitable manner.” Section 13 of the LPPs provided that, failing a consensual agreement between the two groups, the dispute had to be arbitrated in a proceeding involving management and the two employee groups.

ALPA designed its process, using the same LPPs test, as one limited to the two pilot groups with the ultimate result then taken to management for acceptance as part of a new, combined collective bargaining agreement. Although management theoretically had the right to arbitrate under Section 13 the fairness of the list as presented by ALPA, this almost never happened as management usually was only interested in ensuring that the integrated list did not add significant costs to the operation.

Following the Airline Deregulation Act of 1978, the Department of Transportation, which had taken over the role of the disbanded CAB in reviewing airline mergers, served notice on carriers and labor organizations that it intended to discontinue the historic practice of applying LPPs to mergers, and that the parties should therefore negotiate such provisions if they wanted their protections.

ALPA immediately made negotiation of LPPs a priority contract item and you can find reference to what now are termed “contractual LPPs” in Sections 1-D and 1-E of your Agreement. Among other things, they guarantee that United pilots will have the protection of the Allegheny-Mohawk LPPs, including a “fair and equitable” seniority integration in the event that United were to be acquired by another carrier, or if United engaged in the sale of a significant portion of its flying operations. United is contractually bound to make a “fair and equitable” seniority integration a condition of any transaction. It was a provision such as this in the Flying Tiger pilots’ agreement, which forced Federal Express and its pilots, who were not members of ALPA at that time, to engage in a seniority arbitration. In addition, and even more remarkably, it was a provision such as this in the Western Airlines Flight Attendant agreement which forced Delta and its non-union Flight Attendants to engage in a seniority integration arbitration when Delta bought Western.

The significant fact is that almost all ALPA carriers, including Continental and Delta, have virtually identical language in their agreements. Even if the United pilots were not represented by ALPA, because of these provisions in the other pilot group’s contract, we still would be required to engage in a seniority integration arbitration under a “fair and equitable” standard if we merged with either of these carriers. Simply stated, neither Continental nor Delta could legally enter into an agreement with United without such a guarantee for all pilots even if United’s pilots were not in ALPA.

How, then, you might ask, did the American pilots avoid an arbitration with the TWA pilots? The simple fact is that a court found at the time American proposed to buy TWA that TWA was on the verge of liquidation. The TWA pilots were told by American that they would have to waive their contractual right to arbitration and accept the proposed seniority list, or no transaction would take place. The TWA pilots elected to waive their contractual rights and accept the only deal available in order to salvage at least some of their careers. Obviously, that scenario does not apply to United and any carrier with whom it may merge.

It is important to know the facts, and not blindly believe anything someone puts on the wall or on a website in an attempt to mislead you. We hope this explanation helps you assess some of the claims being advanced. To that end, and to provide what you need to stay informed about mergers and acquisitions.

 

[densoo]

..............

 

[densoo]

ALPA merger policy is a fair process that will be ultimately determined by a neutral arbitrator period.

And on what will this "neutral arbitrator" base their decision. I guess it will be based largely on a presentation of each sides' position on the matter, followed by a careful study of each sides' presentation, historical precedence, and perhaps some wisdom. Will CAL bring everything to the table to ensure a fair outcome? Again, I hope so.

 

[CAL EWR B737]

And on what will this "neutral arbitrator" base their decision. I guess it will be based largely on a presentation of each sides' position on the matter, followed by a careful study of each sides' presentation, historical precedence, and perhaps some wisdom. Will CAL bring everything to the table to ensure a fair outcome? Again, I hope so.

Yes that is pretty much it in a nutshell. I can tell you we have one of the best merger counsel Dan Katz and our merger committee is very sharp. Our merger chairman is now the US air pilot neutral in the US/AWA merger. Our vice chairman was the pilot neutral for Polar in the recent Atlas/Polar merger. They are well versed on ALPA merger policy.

If and when we go to an seniority arbitration you will be well represented and I believe our career expectations are as good or better then anyone in the business today. Do yourself a favor chill out negotiating merged lists on this forum will serve no purpose other than to give you an ulcer or worse a coronary.

Your merger committee is well prepared relax.

 

[CAL EWR B737]

One additional thought. In less than three weeks who will be the President of ALPA? CAL will not get any special treatment and conversely we are no longer the red head step child of the airline industry. We will get a fair integration no better or worse than any other ALPA carrier

 

[MSNFlier]

NWA's blocking rights, mergers, etc...

Unfortunately, yes, I am an attorney. This post is not intended in any way as "flame bait" or to be otherwise disrespectful of any board member's interests. As a private pilot who follows airline issues because I have always wished my office was a cockpit instead of a desk with a tiny window, I tremendously respect the sacrifices commercial pilots make to bring me home safely - every time. What has happened to rank-and-file airline workers' pay over the past five years has been nothing short of scandalous while bigwigs walk away with millions.

I do not condone the bretherens' work to make that happen.

While I understand NWA has certain power to block a CAL merger, UAL and CAL are paying very smart lawyers top dollar to figure out creative ways to thwart NWA's rights. I don't have much experience in BK law, but I know one thing: money absolutely talks to shareholders and creditors of bankrupt entities. From what I've read, NWA's long-term viability is in serious question and if I'm a creditor (secured or not), I want to make sure I get paid, plain and simple.

One way to make sure I get paid is for NWA to survive BK and thrive with me as a shareholder.

Another way is to sell my vote on the NWA creditors committee for a one-off payment (cash or shares) from the new UAL/CAL entity. The committees could make life so miserable for NWA management they could conceivably force NWA to give up NWA's blocking power in return for a payment of some kind (cash infusion, stake in the new airline - not a merger). Not sure if it's possible, but there are no more shark-infested waters than those around a bankrupt business. Big-time BKs are one of the most intense and financially high stakes area of law and you must expect the unexpected.

Now, about that Air Tran's proposal to "merge" with Midwest? Disaster for us good old Wisconsin boys. I want to see Midwest stay independent. Glad they never had to go BK or for sure they'd be gobbled up by now.

Fly safe,

 

[CAL EWR B737]

Most important part of ALPA merger policy other than guaranteeing a seniority arbitration:


5. The merger representatives shall carefully weigh all the equities inherent in their merger
situation. In joint session, the merger representatives should attempt to match equities to
various methods of integration until a fair and equitable agreement is reached, keeping in
mind the following goals, in no particular order:
a. Preserve jobs.
b. Avoid windfalls to either group at the expense of the other.
c. Maintain or improve pre-merger pay and standard of living.
d. Maintain or improve pre-merger pilot status.
e. Minimize detrimental changes to career expectations.

 

[XJTAv8r]

Unfortunately, yes, I am an attorney. This post is not intended in any way as "flame bait" or to be otherwise disrespectful of any board member's interests. As a private pilot who follows airline issues because I have always wished my office was a cockpit instead of a desk with a tiny window, I tremendously respect the sacrifices commercial pilots make to bring me home safely - every time. What has happened to rank-and-file airline workers' pay over the past five years has been nothing short of scandalous while bigwigs walk away with millions.

I do not condone the bretherens' work to make that happen.

While I understand NWA has certain power to block a CAL merger, UAL and CAL are paying very smart lawyers top dollar to figure out creative ways to thwart NWA's rights. I don't have much experience in BK law, but I know one thing: money absolutely talks to shareholders and creditors of bankrupt entities. From what I've read, NWA's long-term viability is in serious question and if I'm a creditor (secured or not), I want to make sure I get paid, plain and simple.

One way to make sure I get paid is for NWA to survive BK and thrive with me as a shareholder.

Another way is to sell my vote on the NWA creditors committee for a one-off payment (cash or shares) from the new UAL/CAL entity. The committees could make life so miserable for NWA management they could conceivably force NWA them to give up NWA's blocking power in return for a payment of some kind (cash infusion, stake in the new airline - not a merger). Not sure if it's possible, but there are no more shark-infested waters than those around a bankrupt business. Big-time BKs are one of the most intense and financially high stakes area of law and you must expect the unexpected.

Now, about that Air Tran's proposal to "merge" with Midwest? Disaster for us good old Wisconsin boys. I want to see Midwest stay independent. Glad they never had to go BK or for sure they'd be gobbled up by now.

Fly safe,

Isn't "bankruptcy attorney" the best paying job in the airline industry (other than CEO)? :laugh:

 

[Andy]

Do yourself a favor chill out negotiating merged lists on this forum will serve no purpose other than to give you an ulcer or worse a coronary.

... just make sure not to quote me in any merger committee meetings. I do NOT represent the UAL pilots.

 

[Andy]

More on the Northwest 'golden share' (from usaviation.com):

Section 4: Master Alliance Agreement

iii Additional Termination Rights

(a) In the event of a NW Change of Control, each of CO and NW shall have the right to terminate the Master Alliance Agreement on 6 months' prior written notice, without liability or penalty to the other party.


(d) For purposes of this term sheet, a "Change of Control" with respect to either NW or CO shall mean any merger, reorganization, share exchange, consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction involving NW or CO, or any sale or disposition of all or substantially all of NW's or CO's airline assets on a consolidated basis, involving, or the acquisition of beneficial ownership of 25% or more of the equity securities or voting power of NW or CO by, a third-party air carrier or carriers with annual passenger revenues in any such carrier's most recently completed fiscal year in excess of $1 billion, or an affiliate of any such third-party air carrier(s), or the execution of definitive agreements in respect of any such transaction.

With Northwest filing chapter 11, it appears that they have lost their golden share. (Ch 11 = reorganization)

 

[Occam's Razor]

Andy,

RE: "With Northwest filing chapter 11, it appears that they have lost their golden share. (Ch 11 = reorganization)"

I don't think Chapter 11 is listed as one of the triggers. Reorganization is...but NWA is not reorganized, nor have they indicated when they will be.

 

[Andy]

A reorganization is what chap 11 is all about.

http://www.sec.gov/investor/pubs/bankrupt.htm

http://en.wikipedia.org/wiki/Chapter_11

http://www.extension.umn.edu/distribution/businessmanagement/DF7296.html

 

[densoo]

Yes that is pretty much it in a nutshell. I can tell you we have one of the best merger counsel Dan Katz and our merger committee is very sharp. Our merger chairman is now the US air pilot neutral in the US/AWA merger. Our vice chairman was the pilot neutral for Polar in the recent Atlas/Polar merger. They are well versed on ALPA merger policy.

If and when we go to an seniority arbitration you will be well represented and I believe our career expectations are as good or better then anyone in the business today. Do yourself a favor chill out negotiating merged lists on this forum will serve no purpose other than to give you an ulcer or worse a coronary.

Your merger committee is well prepared relax.

Well, OK then.

 

[COpilot]

Most important part of ALPA merger policy other than guaranteeing a seniority arbitration:


5. The merger representatives shall carefully weigh all the equities inherent in their merger
situation. In joint session, the merger representatives should attempt to match equities to
various methods of integration until a fair and equitable agreement is reached, keeping in
mind the following goals, in no particular order:
a. Preserve jobs.
b. Avoid windfalls to either group at the expense of the other.
c. Maintain or improve pre-merger pay and standard of living.
d. Maintain or improve pre-merger pilot status.


e. Minimize detrimental changes to career expectations.

Look I think we are getting way ahead of ourselves, but since we are, here's my two cents.

This is going to be easy when following the rules above, regardless of who is running ALPA...

With the location of the current crew bases, and the way the fleets are set up I can see a simple (relative term) set of fences and bid freezes set up for a few years ('ala NWA/REP).

After which a merged list with seat protections and percentage placements top to bottom would prevent windfalls and major disruptions.

If your in the top 5% before and you come out 3-8% post, if your 85% before and you come out 80-90% post; then with overall fleet increase your in the same position. Heck I'm 40% CA EWR now, I can't believe that enough UA staff will, or wants to come to EWR to move me down, RIGHT?

 

[Tejas-Jet]

Yes that is pretty much it in a nutshell. I can tell you we have one of the best merger counsel Dan Katz and our merger committee is very sharp. Our merger chairman is now the US air pilot neutral in the US/AWA merger. Our vice chairman was the pilot neutral for Polar in the recent Atlas/Polar merger. They are well versed on ALPA merger policy.

...and isn't Dan Katz the attorney representing the US Air pilots in the U/AWA seniority arbitration? If the CAL guys already have Dan Katz, then the UAL guys are already behind...

...maybe another "Summer of Love" might be in order?

Tejas

 

[CAL EWR B737]

Look I think we are getting way ahead of ourselves, but since we are, here's my two cents.

This is going to be easy when following the rules above, regardless of who is running ALPA...


If your in the top 5% before and you come out 3-8% post, if your 85% before and you come out 80-90% post; then with overall fleet increase your in the same position. Heck I'm 40% CA EWR now, I can't believe that enough UA staff will, or wants to come to EWR to move me down, RIGHT?

You are correct it doesn't matter who is the President of ALPA. I am just tired of hearing so many pilots saying we (CAL) will get screwed because were are CAL. Those days are long gone. How many times have you heard "I was on a United jumpseat and they said they are going to kill us in a merger integration" etc etc.

The only reason I mentioned the President in the post above is he will definitely make sure CAL's rights are protected as he will for all ALPA carriers. I'm sick of the beaten wife syndrome some of our pilots still exhibit. This isn't the CAL of ten or twenty years ago.

Pilots don't have two cents in a merger outcome only the arbitrator following ALPA merger policy based on the criteria listed above.

Hey I am about 40% in EWR you must be close to an 4/87 hire?

 

[CAL EWR B737]

...and isn't Dan Katz the attorney representing the US Air pilots in the U/AWA seniority arbitration? If the CAL guys already have Dan Katz, then the UAL guys are already behind...

...maybe another "Summer of Love" might be in order?

Tejas

Yes that is correct. We have retained Dan Katz ever since we had our first union the IACP. We have Katz for all mergers with the exception a merger involving USAIRWAYS.

 

[MSNFlier]

Apologies to Occam, I think Andy may be right...

Believe it or not, enormous amounts of money sometimes hinge on a comma! Let's go to the tape (emphasis in bold, added):

Section 4: Master Alliance Agreement

iii Additional Termination Rights

(a) In the event of a NW Change of Control, each of CO and NW shall have the right to terminate the Master Alliance Agreement on 6 months' prior written notice, without liability or penalty to the other party.

(d) For purposes of this term sheet, a "Change of Control" with respect to either NW or CO shall mean any merger, reorganization, share exchange, consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction involving NW or CO, or any sale or disposition of all or substantially all of NW's or CO's airline assets on a consolidated basis, involving, or the acquisition of beneficial ownership of 25% or more of the equity securities or voting power of NW or CO by, a third-party air carrier or carriers with annual passenger revenues in any such carrier's most recently completed fiscal year in excess of $1 billion, or an affiliate of any such third-party air carrier(s), or the execution of definitive agreements in respect of any such transaction.

OK, again I'm not a BK attorney - it doesn't matter what I do for a job - the King's English controls here. If Andy's quote is correct, UAL/CAL' lawyers may be betting the bold wording above is operative here, and the second section after "...CO, or any sale...," is not relevant because when a company goes Ch. 11 it does cede control of the company to the debtor-in-possession (DIP) lender, creditors' committees and the bankruptcy court (thus one of the things evidencing a Change of Control...is...reorganization...).

But, since banks, Boeing, Airbus, GE, P&W, etc., etc., don't want to run the airline themselves they let management continue to do so, under their watchful eyes and that of the bankruptcy court judge. Recall the recent news about DL's current management saying their "plan" is better than a US Air/DL merger? And Parker saying US Air's proposal was better? That wasn't about convincing anyone but DL's creditors option A or B was better - because the creditors control the airline, subject to the BK judge's approval.

NWA might be out of luck. UAL/CAL would not go to the trouble of having their respective CEOs meet without doing lots of legal homework first. You can be fairly certain the lawyers have developed a strategy or contingencies for hosing NWA's power to stop a deal. UAL and CAL might be able to weaken or wipe out NWA's leverage by showing that its power to meddle in CAL's plans evaporated when they filed BK. Maybe so much so that UAL/CAL might be able to buy NWA now too, but for way less because NWA is in bankruptcy and, short of liquidation, it won't be worth less than it is now.

One question...how much of NWA's revenues come from their code-share with CO? If it's a significant number (say 15-20%), might that call into question NWA's survival through/after BK without CO? If so, NWA's possibly dim long-term prospects might make it a very attractive target for a low-ball offer because NWA's creditors would be very skittish about whether they'll get paid by NWA at all.

Remember, there are no more shark-infested waters than those around a bankrupt company. Expect the unexpected. NWA might be in an awful bind here.

 

[Occam's Razor]

Thanks, counselor!

I wonder if any of the other SEC filings NWA has made regarding the Agreement have any bearing?