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How US Airways Pilot Leaders Found Their Way to Unanimously Back Merger Deal

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US Airways plane at Philadelphia International Airport (Photo credit: Wikipedia)

This story has been revised to reflect additional information provided by US Airways pilots familiar with their union's internal negotiations.

This week, as pilots at US Airways vote on a temporary contract that will take effect in the event of a merger with bankrupt, approval seems virtually assured.

That might not have been the case if not for the complicated negotiations that brought together two divided factions on the board of pilot representatives, the 11-member leadership group of the U.S. Airline Pilots Association, in internal debate last month regarding the MOU.

Like many pilot leadership groups, the BPR is split. The split was particularly evident in the MOU negotiations. Yet in the end, the conflict was resolved in a way that created broad support for the deal, symbolized by a unanimous BPR vote to endorse it. Voting ends February 8.

The MOU is stacked with benefits for the US Airways pilots, who have worked for below-standard wages ever since signing a bankruptcy contract in 2004. Among the benefits are a lump sum $40 million payment, worth about $10,000 per pilot; pay rate increases to American pilot levels, which means increases of 13% to 35% over current rates as well as substantial increases for the life of the contract, and retroactive pay to American levels. The improvements would be implemented, retroactive to the date of ratification, if a merger occurs.

“Our pilot group has been without a reasonable contract for far too long,” said the USAPA negotiating team in a Jan. 15 letter to members. “We are confident that the resulting document offers our pilots substantial progress towards industry standard pay and working conditions that we have long deserved. We feel it benefits all pilots, no matter where you are on the seniority list.

"If this merger transpires, we believe this MOU is the quickest and surest path to a better lifestyle for us all,” the negotiators said.

USAPA President Gary Hummel has consistently advocated for the MOU because it so clearly benefits the vast majority of his constituents. Elected in 2012 as the third USAPA president, Hummel has sought to build consensus and generally has the support of six members BPR members. The five other members, including the three Charlotte representatives as well as two of the three Philadelphia representatives, typically take a more aggressive approach towards the airline.

As the BPR considered the MOU deal reached by the union’s negotiating team, the date for the MOU to take effect was in play. The negotiators had been in sessions involving five parties: the two airlines, the two pilot unions and the AMR creditors, represented by attorney Jack Butler. They had agreed to an implementation date 30 days prior to the effective date of the merger, and Hummel’s group of six backed them.

But within the BPR, various members of both groups thought it might be worthwhile to have the union’s negotiators go back go to airline to seek to secure an earlier implementation date. Ratification, expected on Feb. 8, could come weeks or months before a merger is approved, if it is approved.  Using Feb. 8 as a contract implementation date could be worth millions of dollars to the US Airways pilot group.

A key argument in favor of the earlier implementation was that pilots from both US Airways and from America West, which merged in 2005, have worked under sub-standard contracts since before the merger and should be brought up to industry scale as early as possible.

The group of five pilots, headed by Bill McKee, chairman of the Charlotte base, was not wholly in support of the MOU. But a consensus emerged that in return for an earlier implementation date, the BPR might be able to offer the company something of importance: unanimous approval from all 11 members. This would provide a sign to creditors, who are deciding whether to back a merger with American, that Doug Parker and his management team have the strong support of the pilot group and the potential for some degree of labor peace in a merger deal.

That is the deal that was struck. It relied on cooperation between two leadership groups that have tended to oppose one another. It seems to indicate that Hummel has emerged as a leader with ability to take the pilot group in a direction that benefits all of its members, and that McKee is able to make a deal when he needs to.

Several pilots provided details of the union’s deliberations, but  asked not to be named because those details were considered to be confidential under a non-disclosure agreement, related to merger negotiations, that was signed by USAPA. USAPA spokesman James Ray declined to comment for this story.  McKee declined to provide details of the talks but said “I am proud of what the Charlotte reps and two of the Philadelphia reps have accomplished for the US Airways pilots.”