The airline industry is at a turning point.  With expenses increasing, the industry’s big labor unions are desperate to preserve their old order.  In fact, the situation has become so exacerbated that American Airlines’ unions have taken the extraordinary step of pushing their employer to merge with US Airways rather than allow the legal process of American’s bankruptcy reorganization to reach its natural conclusion. 

Now that American Airlines is open to merger possibilities, it is even more vital that union leaders, who are largely responsible for the industry’s woes, do not seek to control the terms of any merger.  As this issue progresses, below is a list of questions for stakeholders – airline management, union members and customers.

General Questions for US Airways Management: 

Unsustainable labor costs drove American Airlines into bankruptcy, yet union leaders and US Airways management seek to perpetuate similarly unsustainable costs in a potential merger.  Given uncertain worldwide economic conditions and fuel costs, what assurances can you give that the cycle won't simply be repeated? 

“American is paying the price for sidestepping the near-death experiences of its competitors. It's bleeding red ink... Labor costs remain the big challenge.”  (Source:  “Why American Airlines is Stuck at the Gate,” BloombergBusinessweek, 10/7/10)

American Airlines has announced that it is open to exploring merger opportunities with multiple parties, and not just US Airways.  How does that alter your plans with American’s labor unions? 

(Source:  “American Airlines Opens Its Door to a Merger,” The Wall Street Journal, 7/10/12, Mike Spector, Susan Carey and Anupreeta Das)

Question for Rank-and-File Union Members:

US Airways’ management has aggressively and publicly recruited American Airlines' unions to support a merger between the two companies by promising a contract to American’s union employees.  How can US Airways be courting them while it has yet to integrate America West’s union workforce, and does it have any plans to complete that integration?   

Seven years have passed since the merger between US Airways and America West was completed, yet the workforces remain un-integrated. (Source:  “US Airways Pilots Protest Lack of Resolution Five Years After America West Merger,” Air Transport World, 9/9/10)

Consumer Questions:

What will the costs to taxpayers be in each city where service is downsized as a result of a US Airways-American merger, particularly my hometown?

Due to US Airways leaving Pittsburgh as a hub, as of 2009, more than half of the bond money to build the airport remained unpaid  – a  whopping $479 million. (Source: “US Airways Moves Deflate Work Force, Dreams,” Pittsburgh Tribune Review, 12/13/09, Tom Fontaine)

In terms of service cuts, what assurances can be given to customers that they will still have options from an integrated airline to key destinations?

The Southwest and AirTran merger has caused fifteen cities, many in small- and mid-sized markets, to lose AirTran service but not pick up Southwest service.  (Source: “Many Cities Lose Out in Southwest-AirTran Merger,” USA Today, 3/1/12, Nancy Trejos)

What will be done, if anything, to ensure a streamlined customer service experience?

US Airways recently ranked last in customer satisfaction according to a survey by J. D. Power and Associates. (Source: “US Airways Ranks Last in J.D. Power Customer-Satisfaction Survey,” Charlotte Business Journal, 6/14/12)

Is there a detailed plan to integrate reservation systems in a timely fashion to avoid delays, cancellations and missed flights?

After the merger with America West in 2005, it took US Airways three years to integrate their systems, resulting in only 55% of flights arriving within 15 minutes of their scheduled times. (Source: “US Airways Highlights Drawbacks of Consolidation; Merger with America West Led To Poor Service, Low Morale, Squabbling Workers,” USA Today, 3/5/08, Dan Reed)

Frequent flyer programs are important to fliers. How will these programs be integrated to ensure customers do not lose their hard-earned miles?

United and Continental just integrated their frequent flier programs this year, two years after their merger commenced.  (Source: “United, Continental Set Frequent-Flier Merger,” MarketWatch, 3/2/12, Val Brickates Kennedy)

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Read more on this issue:

• Labor-Union Alliance Poses New Threat to Aviation Industry
  The Washington Times, 5/24/12, Op-Ed by Timothy Lee, CFIF VP of Legal and Public Affairs

•  Big Labor Attempts to Commandeer American Airlines
  CFIF's Freedom Line Blog, 5/8/12, Timothy Lee 

• CFIF Print Ad in Politico (.pdf)