Saturday, November 21, 2015

United, Pilots Reach Tentative Pact on Contract Extension: United Continental is trying to expedite labor negotiations under new management

The Wall Street Journal
Nov. 20, 2015 8:32 p.m. ET

United Continental Holdings Inc. late Friday said it reached an agreement in principle with its pilots union to extend the duration of group’s current contract by two years to the end of 2019, adding to its budding success in reaching new deals with its unionized workers.

A majority of the 12,000 aviators represented by the Air Line Pilots Association would have to approve the contract extension, once the union’s leadership meets over the weekend to consider it, draft the final language over the next few weeks and then decide whether to accept the terms as a tentative agreement.

United said agreement underscores the “positive, collaborative relationship” between the company and the union leadership. Capt. Jay Heppner, chairman of the ruling council of ALPA, said polling of the membership indicated that the pilots want “industry-leading compensation” without “any concessions.”

United, which has suffered from rocky labor relations since its 2010 merger with Continental Airlines, has been trying to smooth that friction under new management that took over in September. Shortly after Oscar Munoz, a railroad executive and United director, was named chief executive when his predecessor was abruptly ousted, Mr. Munoz said one of his priorities was to listen to the company’s 85,000 workers.

Mr. Munoz suffered a heart attack a little over a month after taking the reins. So United’s then-general counsel, Brett Hart, took over as acting CEO until Mr. Munoz returns to the job in the first quarter. Mr. Hart has stressed that he is committed to sticking to Mr. Munoz’s game plan, which also includes being more passenger friendly.

United’s pilots reached a joint contract in late 2012, two years after the merger. Still, the group has groused periodically about what it sees as poor training, lack of the proper tools to do the job, United’s erratic reliability and other issues. The pilots’ current contract comes open for renewal in late 2017. This fall, United proposed extending the current pact in a round of expedited bargaining that would only cover a few issues. The talks lasted less than 30 days before this agreement was reached.

United in early November said it reached a deal to start negotiations with the International Association of Machinists union more than a year before the contract covering 30,000 ramp workers, customer-service agents and reservationists opens for renewal at the end of 2016. The company at that time extended by two years to January 2019 its earlier commitment not to contract out IAM jobs at United hubs and airports. Since 2013, United has outsourced about 2,300 airport jobs to outside vendors to cut costs.

The airline in late October said it has reached a new proposed joint labor agreement for its 9,000 mechanics. The International Brotherhood of Teamsters union must put the proposal out to a membership vote, but that hasn’t occurred yet.

Perhaps the trickiest negotiations concern United’s 21,000 flight attendants. They and United have been unable to reach agreement on a joint contract even though they have been bargaining since 2012. The talks are being assisted by federal mediators. But until a tentative deal is reached and then ratified by a majority of the group, the former United attendants are limited to staffing United planes, and the Continental attendants can only fly on Continental aircraft. This reduces efficiency, perpetuates divisions between the two sides and requires flight attendants to relocate to other crew bases to follow “their aircraft.”

With the airline industry producing record profits, some unions at other airlines this year have rejected tentative labor accords even though they contained big pay increases. Pilots at Delta Air Lines Inc. and Southwest Airlines Co. both turned down new deals, as did the Southwest flight attendants.

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