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U.S. Airways pilots union disapproves of possible United combo

ASSOCIATED PRESS

3:49 p.m. May 16, 2008

PHOENIX – If US Airways and United Airlines decide to combine, they'll bring along a number of reluctant employee groups that would rather remain separate.

US Airways pilots on Friday joined a chorus of criticism about a possible tie-up. The US Airline Pilots Association said United parent UAL Corp. is financially weak, and that mixing the carriers is a bad idea. Chicago-based UAL lost $537 million in the first quarter.

“With mounting losses, and a dismal balance sheet, UAL may not be the best dance partner for US Airways,” USAPA President Stephen Bradford said in a statement.

United pilots are equally resistant to pairing with Tempe, Ariz.-based US Airways Group Inc. Steve Wallach, a union leader for United pilots, has said that US Airways gives poor customer service and its previous deal with America West created a “toxic stew” within its pilot ranks.

Flight attendants, mechanics and fleet service workers at both carriers also have come out against plans for a combined operation.

Airline chiefs Doug Parker of US Airways and Glenn Tilton of United Airlines have both praised airline consolidation in general as the best way to deal with soaring fuel prices. By joining forces, airlines can cut redundant routes, increase demand for the remaining seats, and keep fares high.

But the International Association of Machinists and Aerospace Workers is lobbying for a different strategy.

Spokesman Joseph Tiberi said consolidation won't put an end to the high fuel prices that squeezed profit out of the industry. Instead, the machinists union has called for a return of airline regulation.

For example, Tiberi said, the government should limit carriers from starting price wars with heavily discounted fares.

“This is an industry where the free market has obviously failed,” he said. “An airline can't pay $100 to deliver a product to a customer, and then sell it for $75 and expect to make any kind of profit. It doesn't make sense.”

Airline consultant Robert Mann said it's nice – but not necessary – for combining companies to have the blessing of employees. However, employee participation could become important if the carriers look to third parties to pay for the combination.

“Those third parties would want to know that there are willing participants in the deal,” Mann said.

Delta Air Lines Inc. and Northwest Airlines Corp. initially sought the blessing of their pilots unions before announcing plans to join in April. Delta pilots eventually agreed, but Northwest pilots have opposed a deal.

US Airways shares were up 18 cents to $7.80 and UAL shares were down 57 cents to $13.81 in Friday trading.



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