US Airways Workers: Merger Appears Likely

Since word leaked three weeks ago that US Airways and America West Airlines have been discussing a merger, US Airways workers have wondered whether a marriage between the two airlines would come to pass.


Since word leaked three weeks ago that US Airways and America West Airlines have been discussing a merger, US Airways workers have wondered whether a marriage between the two airlines would come to pass.

Now, among many workers, there is a sense of inevitability developing that the airlines will soon announce a partnership. That perception has been fed by media reports and, employees say, by positive signals that seem to be coming out of US Airways' Arlington, Va., headquarters.

Suspicions of a merger announcement deepened late Monday, when US Airways filed court papers seeking approval to offer incentives for 1,900 salaried employees to stay on the job. The plan is needed, the company said, to retain the workers "during negotiations over a strategic transaction, and during the approval and implementation of any such transaction."

Although the airline says there are no guarantees it will reach a deal with Arizona-based America West, labor leaders say they think the timing of the request indicates that talks are serious.

"If it wasn't that far along, they wouldn't be rushing to put this in place," said Mike Flores, a flight attendant union leader in Charlotte. "They're concerned that managers are going to leave because of a shakeup in management due to a merger."

This week's move follows a presentation to labor leaders at the company's headquarters last week, in which executives said they are pursuing a "strategic partnership" because it would save jobs and would be attractive to investors and customers. Other alternatives are keeping the airline as is, which would require fuel costs to drop, and shrinking the company's size, which would cost money, according to slides at the meeting.

US Airways, which has been operating in bankruptcy court since September, is Charlotte's dominant carrier. About 5,600 of the airline's 25,000 workers are based in Charlotte.

An airline spokesman declined to discuss the timing of any announcement, or whether one is forthcoming.

Any deal would likely require an infusion of outside investment and would be subject to the approval of a variety of parties, including the federal government, a bankruptcy judge, US Airways creditors and America West shareholders.

A slide at the labor meeting last week said there are "many hurdles to success."

Pilot Evan Calott of Charlotte was in a meeting last week, and said he perceived that a headquarters employee who led the meeting thinks a merger will take place.

"His tone seemed to indicate that this project was moving forward at a pretty rapid pace," Calott said. "You get that overwhelming feeling that this in fact will happen."

Calott likes the prospect of a merger, saying it would be great for Charlotte to be part of a large low-cost airline.

On Tuesday, labor leaders continued to criticize the company's proposal to offer severance payments to white-collar workers so they'll stay at the airline. The plan could pay up to $55 million, mostly for severance payments if salaried workers are required to transfer or lose their jobs, which could happen in a merger. Up to $18 million of that could go to the company's top 25 executives.

The airline says the total program is more likely to cost between $16 million and $21 million, because some workers are likely to be retained and some will choose to leave.

Of the 1,900 covered in the plan, the airline deems 1,562 of the employees are "subject to risk of elimination or relocation," according to court papers.

The company said money for the retention plan would come from money that has been saved in recent months by leaving positions unfilled.

But Bill Wise, a machinists' union leader from Charlotte, says paying failed executives to stay with the company is wrong.

"I think it's horrible to even think that would be an issue," he said.

He pointed to comments from US Airways Chairman David Bronner, who told The Associated Press last month that US Airways executives "are more than happy to go back to playing golf as opposed to running an airline that is extremely difficult."

This content continues onto the next page...

We Recommend