US Airways chief Doug Parker refused to budge this year when his pilots unions asked for a better deal, saying he preferred to combine America West and US Airways pilots' contracts in a way that didn't raise costs.
But Parker recently changed his stance, saying the company would pay to bring everyone up to the more lucrative America West contract.
"We will go to the cost structure of the higher of the two carriers," company spokesman Phil Gee said Monday in a statement.
Pilots say they want more. But it's curious, they said, that the airline would sweeten the deal now that it has a second acquisition in mind: an $8.6 billion offer for the bankrupt Delta Air Lines Inc.
"They think they need to solve some of their labor problems prior to making this (Delta) deal successful," union spokeswoman Tania Bziukiewicz said.
Even without the Delta offer, it would make sense for an airline to settle its labor disputes quickly, said Ray Neidl, an analyst with Calyon Securities. But he agreed that US Airways Group Inc. has even more incentive to finish combining operations before focusing on Delta.
"You don't want this thing to continue to overhang you, especially as you try to do other transactions," Neidl said.
Besides, Neidl said, Delta pilots, who have a say in who runs the airline, are using US Airways' labor dispute as an argument not to support Parker's offer.
US Airways pilots have been operating under separate contracts since America West announced its acquisition of US Airways last year.
Pilots, who've watched the company beat market expectations the past two quarters, are demanding better pay and work conditions than what's spelled out in either contract. They held rallies last month at airports in Charlotte and Phoenix to explain why they deserve more.
Bziukiewicz said the union is planning more events to tell everyone - including Delta creditors and shareholders - that US Airways still has problems completing its first merger.
"We're going to continue to get very visible," she said.
In an e-mail, Gee argued that the airline hasn't changed its stance with the unions. He said the company has simply clarified its position.
But Bziukiewicz said this is the first time that the company has offered everyone the America West contract, which in general gives pilots better pay, better vacation packages and flight plans.
She said the airline previously told members of both unions not to expect any more in pay than their current contract offered.
Parker said as much to US Airways shareholders on July 27.
"Management's objective is to put those two contracts together without increasing the cost to the firm at all," Parker said in a conference call then. "Basically saying the contracts are the same, or are essentially identical in terms of cost to the company at both airlines."
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