United Can't Use Continental Code With 70-Seat Jets, Arbitrator Determines

United Continental Holdings Inc. can’t use the Continental Airlines code on 70-seat jets operated by its regional partners because a labor contract requires planes of that size to be flown by Continental pilots, an arbitrator ruled.

Continental pilots filed a grievance about United’s plans to add Continental’s code on a few dozen flights from Continental hubs such as New Jersey’s Newark and Houston airports starting in January, and an arbitrator, Richard I. Bloch, found in favor of the pilots in a ruling yesterday.

Continental pilots have a “scope clause” in their contract that requires planes with 51 or more seats to be flown by Continental pilots, not regional partners such as SkyWest Inc., while the United contract has a scope of 71 seats. United wanted to move some 70-seat jets to Continental hubs and add Continental’s code, prompting an objection by the pilots.

United will still be able to operate the 70-seat regional jets at Newark and Houston using its own code, said Julie King, a spokeswoman for the Chicago-based carrier.

“Although we disagree with the arbitrator’s decision, we will comply with the ruling,” King said. “We are pleased that this decision will permit the company to redeploy 70-seat aircraft in certain markets under the United Express brand to better meet demand and improve profitability of the combined company.”

Separate Airlines

Routes include Newark-Atlanta, Newark-Detroit, Houston- Colorado Springs and Houston-Dallas Fort Worth, she said.

“We are of course pleased with the arbitrator’s decision,” Jay Pierce, chairman of the Continental chapter of the Air Line Pilots Association, said yesterday in a message to the 5,000 Continental pilots.

United Airlines parent UAL Corp. merged with Continental Airlines Inc. in October in an all-stock deal valued at $3.47 billion. The two must operate as separate airlines until they are granted a joint operating certificate by the U.S. Federal Aviation Administration at the end of 2011.

United Continental management and the pilots for both carriers jointly filed for mediation in their contract talks for a new collective bargaining agreement on Dec. 17.

To contact the reporter on this story: Mary Jane Credeur in Atlanta at mcredeur@bloomberg.net.

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net.

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