United's Unions Ready for a Merger

United Airlines unions say they have spent several years preparing for a potential merger with another airline.

No merger has been publicly announced, but the most recent of many rumors involving United has the Chicago-based airline as a possible merger partner for Continental Airlines or Delta Air Lines.

"We've been preparing for a potential merger since late 2004," said Sara Nelson Dela Cruz, spokeswoman for the Association of Flight Attendants at United.

Her union is hopeful that a merger could bring more jobs or an opportunity to negotiate better pay and benefits.

"The industry is headed towards consolidation to expand," Dela Cruz said. "That is a sign of good things for the airline industry, and the employees who have sacrificed so hard to keep the industry afloat stand to benefit from profits or any industry turnaround."

The Air Line Pilots Association at United has a merger committee that meets regularly and has been preparing a review of issues pilots would face in a consolidation scenario.

"ALPA always has contingency plans for any possibility of action, whether it be a merger, financial challenges such as bankruptcy or any other possibility that may come down the line in an ever-changing industry," said pilots union spokesman Dave Kelly.

Mergers can cause such complications as combining nonunionized with unionized groups or employees represented by different unions. Particularly for airlines, combining labor groups with different levels of seniority can be contentious.

United has about 56,500 employees, including about 5,100 in Denver, and is the largest carrier at Denver International Airport.

Both unions said United chief executive Glenn Tilton seems to talk about consolidation whenever he speaks in public.

Earlier this year, The Associated Press reported Tilton saying, "I think the best thing for United to do is to continue to get its house in order and prepare itself for whatever opportunity presents itself."

That has not changed, according to a United spokeswoman.

During a recent earnings conference call, Tilton said, "We're not motivated by any particular transaction. We're motivated because we think it would be good for United and good for the industry."

Calyon Securities analyst Ray Neidl in a recent report said Continental and United "would be a good strategic fit."

But, he wrote, "we still believe it may be too early to be looking at airline mergers."

"Airline managements are still trying to get their operations and finances back into shape from five lean years," Neidl wrote, "and we are not sure if the regulators are ready to approve large-scale mergers at this time. ? If such a merger was to occur, however, we believe that it would set off a chain reaction in the industry."

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