Oct. 5 (Bloomberg) -- Continental Airlines flight attendants declined to join their peers at merger partner United Airlines in immediate contract talks at the combined carrier, possibly slowing work on a joint labor agreement.
United attendants said in an exchange of letters that working together now would give them more clout in talks with United Continental Holdings Inc., the company created by the Oct. 1 merger. Continental attendants want to vote first on an accord reached with that airline, said Joseph Tiberi, a Machinists union spokesman.
The disagreement may imperil Chief Executive Officer Jeff Smisek’s goal of having joint contracts with all labor groups by the time Chicago-based United Continental Holdings, the world’s largest carrier, receives a single airline operating certificate in about a year.
“Getting a transition agreement would be important, both in delivering benefits to the company, which could conceivably be shared back, but also just to get agreement between the parties on some of the thornier issues before a single-carrier certificate,” Robert Mann, president of airline consultant R.W. Mann & Co. in Port Washington, New York, said today in an interview.
Single contracts are “essential” as the combined airline works toward a goal of as much as $1.2 billion in annual savings and new revenue by 2013, Mann said. Streamlined operations under a joint accord allow savings to be achieved sooner.
Workers normally would vote on which union represents them and then negotiate a new contract to cover all employees in that labor group. The Association of Flight Attendants, which represents 16,000 United workers, instead wants to negotiate a joint contract to be administered by the union selected later to represent the attendants, said Sara Nelson, an AFA spokeswoman.
The AFA points to pilots at Delta Air Lines Inc. and Northwest Airlines Corp., who negotiated a joint contract with Delta before those two carriers completed their merger. Both pilot groups were members of the Air Line Pilots Association.
In contrast, pilots and flight attendants at US Airways Group Inc. work under separate agreements five years after America West Holdings Corp. and US Airways combined. Without single contracts, US Airways must maintain separate scheduling and work rules, pay and benefit plans for each company.
The International Association of Machinists and Aerospace Workers and Continental announced a tentative contract agreement on Sept. 30. The airline’s 9,300 flight attendants will begin voting on the plan later this month. If approved, it will stay in place until a joint contract is negotiated by the union elected to represent attendants at both carriers.
Members’ Best Interests
“To accept the AFA offer would have meant ignoring our legal obligations to act in the best interest of the members we currently represent,” Tiberi, a spokesman at the national IAM office in Washington, said today. “We will be back at the table after representation issues are resolved. That is when the combined flight attendant group will negotiate a transition agreement.”
Union leaders at Continental thought it more important to first secure retroactive raises, merger protection and a no-furlough clause in the contract talks that just resulted in an agreement, Tiberi said.
Continental and United aren’t involved in the question of whether the flight attendants should negotiate jointly or separately, Julie King, a spokeswoman for United Continental Holdings, said in an e-mail.
The AFA in separate talks has rejected United’s offer to use the prior Continental accord as a basis for a new contract. While the Continental plan pays higher base wages, its employees work a longer day and may be scheduled to fly more hours each month. United said on its negotiations website on Sept. 27 that AFA bargainers aren’t engaging in “any ‘give and take’ bargaining on issues of economic importance.”
The contract would mean concessions for United attendants, Nelson said.
Continental flight attendants want to vote on their pending agreement with the carrier, because it’s “money in the bank,” said Jeff Straebler, an RBS Securities Inc. analyst in Stamford, Connecticut.
United Continental Holdings rose 37 cents, or 1.5 percent, to $24.47 at 4:04 p.m. in New York Stock Exchange composite trading.
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