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You'll gain real-world insights into how economics impacts your daily life with this easy-to-follow online course. This crash course is based on the acclaimed textbook Economy, Society, and Public Policy by CORE Econ, tailored to help you grasp key concepts without feeling overwhelmed.

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Mergers can provoke a war among pilots over seniority

Merger partners?
For about four years, Delta and Northwest have had a partnership in which they sell seats on each other's planes and integrate their frequent flier programs. But an ongoing dispute among the two airlines' pilot groups over seniority appears to be holding up a merger of the carriers.
Photo courtesy of Michael Carter

It's been almost three years since a healthy America West Airlines merged with a struggling US Airways. Officially, the two carriers are now one, flying under the US Airways banner. However, the airline's pilots are split into factions, known as "East" and "West." And the East pilots, the pilots who flew for the old US Airways, are spearheading an effort to oust their current union, the powerful Air Lines Pilots Association, (ALPA).

ALPA is the union that represents most commercial airline pilots in the country, including pilots at Northwest and Delta.

The seniority-inspired revolt at US Airways has got ALPA worried.

"ALPA takes it deadly seriously," says Pete Janhunen, a spokesman for ALPA.

"It really is a tragedy we're in this situation. But our focus is on convincing the pilots that at the end of the day staying with ALPA is the best choice."

Over the remainder of my career the [seniority] decision [would] cost me on the order of about three quarters of a million dollars.

ALPA has been the leading union for America's commercial pilots for 70 years. The union's potential ouster at US Airways shows how serious an issue seniority is for pilots.

Seniority determines which planes pilots fly. And the bigger the planes they fly, the more money they make.

After US Airways and America West merged in 2005, the two carriers' pilot groups tried to combine their seniority lists, first by negotiation, then by mediation, and finally binding arbitration.

It's the same route a Northwest-Delta seniority dispute could follow.

After three years, the seniority issue is still a mess at US Airways.

The arbitrator's ruling riled a lot of pilots for the old US Airways. And next month, all the airline's pilots will start voting to keep or dump ALPA.

"The arbitration decision was the final straw for the East pilot, in particular," says Scott Theuer, a US Airways pilot and spokesman for the US Airline Pilots Association (USAPA), which aims to replace ALPA as the pilots' union.

Theuer says dumping ALPA would allow pilots to escape the arbitrator's ruling.

Theuer says the decision moved less senior America West pilots ahead of him and other US Airways pilots.

"Personally and very, very roughly speaking, over the remainder of my career the decision cost me on the order of about three quarters of a million dollars."

Theuer figured he had eight years of flying left. So, he was looking at a loss of nearly $100,000 a year.

ALPA's critics at US Airways say a new union would come up with a much fairer plan for combining seniority lists.

Pilots out West--the pilots who flew for the former America West--have a different take on the arbitrator's ruling and the wisdom of throwing out their current union.

"No pilot, neither East nor West lost any kind of significant relative seniority," says Tania Bziukiewicz, an America West pilot and union spokesperson.

"If you're half way down the list before the merger," she says, "you're going to be pretty close to halfway down the list after the merger."

Bziukiewicz says the dispute over the seniority list is hurting all pilots. It's holding up bargaining on a new contract that would likely include pay and benefit hikes for everyone.

She says the dispute is also hurting morale, which is causing service to suffer. For the first half of 2007, nearly 40 percent of US Airways flights were late. To be sure, no seniority solution for pilots at merging airlines is going to please everyone.

Labor consultant Jerry Glass says the trick is to eventually find a formula that most people think is fair overall.

"If most of the people can look at this and say, 'You know this was done fairly. I would have liked to have done better personally but at least it was done in a way that makes sense to me and I think there was an inherent sense of fairness in how they did this for both sides, then that's something we can live with.'"

Northwest and Delta pilots continue to remain mum about how their seniority talks are going. But they could take quite a while longer. A person with knowledge of the situation says the pilots are under no deadline to make a deal.

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