Continental Attendants Spurn Merger-Contract Overture From Peers at United

By Mary Schlangenstein - Oct 5, 2010 10:10 AM

Continental Airlines flight attendants declined to join their peers at merger partner United Airlines in immediate contract talks at the combined carrier, possibly slowing work on a joint labor agreement. United attendants said in an exchange of letters that working together now would give employees more clout in talks with United Continental Holdings Inc., the new company created by the Oct. 1 merger.

Continental attendants want to vote first on a labor accord reached with their airline’s previous management, said Joseph Tiberi, a spokesman at International Association of Machinists and Aerospace Workers in Washington. The disagreement may imperil Chief Executive Officer Jeff Smisek’s goal of having joint contracts with all labor groups by the time United Continental Holdings, the world’s largest carrier, receives a single airline operating certificate in about a year.

“Getting a transition agreement would be important, both in delivering benefits to the company, which could conceivably be shared back, but also just to get agreement between the parties on some of the thornier issues before a single-carrier certificate,” Robert Mann, president of airline consultant R.W. Mann & Co., said today in an interview. Single contracts are “essential” as the combined airline works to achieve its goal of as much as $1.2 billion in annual savings and new revenue by 2013, Mann said.

Choosing Representatives Workers normally would vote on which union represents them and then negotiate a new contract to cover all employees in that labor group. The Association of Flight Attendants, which represents 16,000 United workers, instead wants to negotiate a joint contract that would be administered by the union selected later to represent the attendants, said Sara Nelson, an AFA spokeswoman. The AFA points to pilots at Delta Air Lines Inc. and Northwest Airlines Corp., who negotiated a joint contract with Delta before those two carriers completed their merger.

In contrast, pilots and flight attendants at US Airways Group Inc. continue to work under separate contracts five years after America West Holdings Corp. and US Airways combined. The lack of single contracts means US Airways must maintain separate scheduling and work rules, pay and benefit plans for each company.

To contact the reporter on this story: Mary Schlangenstein in Dallas at maryc.s@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net