Southwest-AirTran merger hinges on union vote
Southwest Airlines Co. has told pilots it would keep operating newly acquired AirTran Holdings Inc. as a stand-alone carrier if union members don't agree to combine seniority lists.
Southwest briefed pilots on a "Plan B" for "separate and unintegrated" operations after their union declined to hold a membership election on a seniority proposal, according to an AirTran union summary obtained by Bloomberg News. Pilots at both airlines are now voting until Nov. 7 on a new agreement. Keeping AirTran flying on its own would run counter to the goal of folding the discount carrier into Southwest. The Dallas-based airline paid $1 billion in cash and stock in May to buy AirTran, winning access to fly into Atlanta. Winning pilots' approval of one seniority list would give Southwest a timeline to blend workforces and fleets, and set union members' rankings for pay, schedules and the types of aircraft they fly. For AirTran pilots, ratification will mean "certainty of integration," Southwest said in a Sept. 22 letter to union members. Southwest has met with pilots to explain "what that vote is and what it does," Beth Harbin, an airline spokeswoman, said in an interview Tuesday. "Absent approval, we have to think about, 'Where is the flexibility?' " Harbin declined to discuss the AirTran union summary or what options that Southwest would consider if pilots don't accept the new seniority agreement. "I'm certainly not going to go into any detail about what that flexibility is," she said. "Our focus is going to be on getting the deal with the pilots done quickly because that really does set a good momentum for the rest of the integration." Jim Morris, a spokesman for the Air Line Pilots Association at AirTran, declined to comment, as did Jacob North, a spokesman for the Southwest Airlines Pilots' Association. AirTran has about 1,700 pilots, and Southwest has more than 6,000. The seniority agreement now being voted on by pilots was crafted after AirTran's union decided against sending the original version to rank-and-file members. Under the new plan, current Southwest pilots' seniority rights would be protected, and AirTran pilots would get pay raises. If the ratification vote falls short, Southwest executives have developed "Plan B," according to the AirTran union summary. Details of that strategy were completed on Sept. 20, the summary said. "Plan B calls for AAI and SWA to remain separate and unintegrated," according to the summary, using abbreviations for AirTran and Southwest. A stand-alone AirTran would provide the same savings and revenue benefits because it would keep collecting $200 million a year in fees for checked bags, and AirTran's Boeing 717s wouldn't be blended into Southwest's fleet, the summary said. Southwest flies only Boeing 737s. SUBHEAD: Southwest could fly AirTran as a stand-alone carrier.
