Thursday, September 05, 2013

United Recalls 600 Furloughed Pilots: Positions Open Up Due to Retirements and New Rest Rules

September 5, 2013, 1:11 p.m. ET


The Wall Street Journal

United Continental Holdings Inc.  said Thursday that it intends to recall nearly 600 furloughed United pilots to address the airline's future staffing needs.

The callbacks echo those made by other large airlines, including AMR Corp.'s American Airlines and Delta Air Lines Inc. as carriers have returned to financial health and are coping with a wave of retirements.

United Continental, based in Chicago, is the result of the 2010 merger between United Airlines and Continental Airlines. In all, the two have more than 12,000 pilots. The company said training classes will begin next month and run through the end of the year for the furloughed pilots who choose to return to work. All of the laid off aviators were from the United side of the operation.

"We welcome our brother and sister pilots back with open arms," said Capt. Jay Heppner, chairman of the leadership council of the United branch of the Air Line Pilots Association. "We have worked toward this day for more than five years."

Like many other U.S. airlines hit by a plunge in travel demand after the 2001 terrorist attacks, United furloughed thousands of workers. For the pilots, it took from 2001 until 2007 for the airline to recall all those who still wanted jobs or weren't flying on temporary assignment for the military. But when oil prices spiked in 2008, United furloughed 1,400 of its most junior pilots and grounded its fleet of Boeing Co. 737s.

The company has instituted small pilot recalls since then. And in the past year, about 600 laid-off United aviators took the opportunity to take positions at Continental, which had completed its own pilot recalls by early 2011. That left about 600 United pilots to be returned to work. United wouldn't comment on how many pilots it expects to come back. Typically, after lengthy furlough periods, only about half the pilots return because they found jobs at other carriers or switched careers.

The company isn't calling back the pilots because it plans a growth spree. A spokeswoman said the recalls are aimed at filling positions coming open because pilots must retire at age 65, and to accommodate new pilot rest and duty regulations the Federal Aviation Administration plans to implement in early 2014. The new rules, which will give pilots more daily rest time, are expected to boost staffing needs at passenger airlines by at least 5%.

Both American and Delta said they have recalled all of their furloughed pilots. Delta said it plans to add about 50 pilots a month from November through early 2014 and then take 20 a month through September 2014.

The pilots of United and Continental last December ratified a new labor agreement covering both groups, replacing concessionary agreements under which both sides had been working for as long as a decade. The four-year accord provided hefty signing bonuses followed by a 8.5% raise in January 2014 and three subsequent annual raises of 3%. By early 2017, when the pact is open for renewal, the pilots will earn between 32% and 63% more than they did, with the largest gains coming on the United side.

After agreeing to the new pact, the two groups set to work trying to reach agreement on a single seniority list, which dictates which aircraft and routes the pilots can fly, their schedules and vacations. In accordance with ALPA merger policy, a three-member arbitration panel earlier this week released the seniority list, which is final and binding.

Now the airline and union must build on that list in terms of reassigning pilots to different planes, moving them from first office to captain and in constructing their monthly schedules, for which the aviators put in bids. Once that process is finalized, pilots and airplanes will be able to be mixed and matched freely, bringing United Continental some new efficiencies, on top of the increased productivity it garnered in the new labor contract.

The final step for the pilots will be merging the governance of the two ALPA branches under a single leadership council, accompanied by the election of new officers. This should occur in October, the union said.