ContiUnited Pilots

It’s been quite a while since the Continental United merger was announced and pilots from both sides are *still* negotiating their integration.   This stands in stark contrast to the SWA / Airtran deal announced a few days ago and completed in far less time than the ContiUnited merger has been going on.  It’s been over a year now since the ContiUnited merger was announced.

This is about pay, seniority and job security.  Both sides of the table have given up significant pay over the past 10 years or so and both want a raise that shares in the wealth.  United has more senior pilots and that’s a threat to Continental pilots.  Continental pilots have enjoyed quite a bit of job security as a result of scope clauses that have limited Continental to using regional airlines for 50 seat missions or less. 

Mostly, neither side wants to budge.  I think the Continental pilots have viewed this merger as more threatening than any anticipated.  Despite the appearance of this being Continental with the United name to the public, more and more of the United model has been retained.  Any attempts to “outsource” Continental flying to United has been stopped in courtroom skirmishes by Continental pilots who don’t want to see regional jets flying *their* routes. 

So what breaks the impasse?  It’s hard to say.  There isn’t much One Love going on here despite the fact that both are represented by ALPA.  United pilots are very militant and Continental pilots are very concerned.  Failure to reach an agreement on much of anything here has caused these talks to look stagnant. 

ContiUnited can’t start benefiting from this merger until it has a merged single certificate as an airline and until it can flow flight crews between both airlines.  That day isn’t in sight as of today. 

Furthermore, management can’t afford to agree to an unsustainable raise for both sides given the current economic climate.  So there are few incentives that management can offer to stimulate an agreement among the pilots. 

Is this going to be another US Airways / America West problem?  Right now, I don’t think so.  It already doesn’t represent the smooth transition that Delta and Northwest enjoyed but it can be wrung out.   The problem here is that there is no momentum.  Continental pilots felt Continental was doing just fine on its own and that they were doing better than most pilots out there.  United pilots are out “to get theirs” at almost any cost.  Someone, somewhere, has to find something for both parties to agree upon and get some momentum going for an agreement.

Continuing these talks for years or coming to an agreement that falls apart hurts the pilots the most.  Senior Continental pilots are going to need to have some assurances with respect to seniority that go beyond “date of hire” integration.  Pay is the easy part here.  Job security and seniority are the hard parts.  Seniority in particular because a Continental pilot that is, say, bumped from his job as a Captain on a 777 stands to lose quite a bit of pay. 

I suspect we’ll see these jobs “fenced” at the airlines with a date sometime in the near future (3 to 5 years) of breaking down those fences so that pilots can bid for jobs they want on each other’s equipment. 

How does all of this happen?  It should happen with Jeff Smisek, CEO of ContiUnited.  It’s always dangerous for  a company leader to get directly involved but he needs to find a way of assuring both sides and an incentive for them to agree upon something.  That incentive is going to cost but the sooner he finds it, the sooner United starts making consistent profits.


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