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Plans by Southwest Airlines to buy Frontier Airlines out of bankruptcy hit a snag on Thursday as pilots for the two carriers failed to work out a deal on how they would merge their ranks.
Talks ended between the two pilot unions around midnight Wednesday, said Carl Kuwitzky, president of the Southwest Airlines Pilots' Association.
It appeared the talks broke down over seniority, the ranking of pilots that determines their rights for schedules and protects them if there are layoffs. Kuwitzky said the Southwest pilots' offer was to put Frontier pilots at the bottom of the combined seniority list.
For pilots in an airline merger, that's considered the worst possible outcome.
An auction had been expected to begin Thursday to sort out competing bids by Southwest and regional jet operator Republic Airways Holdings Inc. On Monday Southwest bid $170 million for Frontier, topping an earlier $108.8 million bid by Republic.
Southwest spokesman Chris Mainz said the airline is still participating in the process but he declined to provide details.
Republic has said it would keep Frontier as a stand-alone carrier, while Southwest plans to absorb the airline over about two years, dumping Frontier's Airbus planes in favor of its all-Boeing 737 fleet.
Kuwitzky said Southwest pilots offered to guarantee that their Frontier colleagues would not lose pay if they go from being a Frontier captain to being a Southwest first officer.
Kuwitzky said they based their offer to Frontier pilots on the career expectations of both. Southwest pilots had higher career expectations than Frontier pilots, who work for a carrier that won't get out of bankruptcy unless someone else buys it, he said.
"We understood their needs. They wanted their jobs, and we think we've offered all of them jobs at Southwest, which we think would be a much more secure future for them than Republic would be," he said.
Frontier Airline Pilots Association President John Stemmler and a Republic spokesman did not return phone messages.
While Frontier pilots are in a position to make some kind of deal before their airline is sold, other workers aren't so lucky. Southwest told Frontier mechanics and others represented by Teamsters Local 961 in a meeting Wednesday that it intended to eventually liquidate Frontier and hire only a handful of the 450 Frontier mechanics and others represented by the union, said Matthew Fazakas, president and principal officer of the local.
"We obviously think that's outrageous," Fazakas said Thursday. "They told us only a handful of people would be offered jobs, and they were not coming over by seniority."
Southwest shares rose 14 cents to $9.15 in afternoon trading, while Republic shares fell 13 cents, or 2.1 percent, to $6.01.
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AP Business Writer Catherine Tsai in Denver contributed to this report.
