Staying Legal: Mergers & Acquisitions

Smooth flying, collision course, or government intervention? Mergers come at a difficult time for mechanics


When Congress passed the Civil Aeronautics Act of 1938 it subjected all the air carriers to the provisions of the RLA. Again, as in the application to the railroads, the act established formal rules for negotiations between employer and the union-represented employees. These rules allowed for long time periods in which to seek a solution to their labor problems, by design, in order to create long-term stability in the airline system, free from the threat of immediate strikes, at least during the negotiation period.

We have just seen an example of this in the recent strike by Spirit Airlines pilots. They have been in “negotiation” under the rules of the RLA for almost four years. Only now are they given the green light to go forward with the strongest weapon in their quest for higher wages and more favorable work rules — the strike. The airline was shut down at the time I submitted this article.

The act however is significant in what it does not expressly address. The act, as originally set out, did not provide for any labor protection provisions when airlines merged. There were no job security provisions provided for employees. These were added later by the Civil Aeronautics Board. Now it may be that the government may step up again and guarantee job security by simply taking over. Take a look at Air France if you want to see the result.

Although the merger of Delta and Northwest progressed smoothly through the government approval process it appears that the merger of United and Continental and any others may see increased opposition from our Justice Department. Congressman Oberstar and other members of Congress see no great benefits for the traveling public with another merger and will attempt to slow down and stop the approval of this merger and any others that come along. Mechanics and others should prepare with Plan B in case things go wrong or another “crisis” appears. Let’s wait and see. Comments to aerolaw@att.net. AMT

Stephen P. Prentice is an attorney whose practice involves FAA-NTSB issues. He has an Airframe and Powerplant certificate and is an ATP rated pilot. He is a USAF veteran. Email: aerolaw@att.net

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