Taking stock of the first six months of the Trump administration.
Airline Employees See Big Gains In Merger
Tempe-based US Airways has upped its spending on lobbyists this year as it tries to merge with American Airlines. There's a big job to do.
The airlines go to court in November to defend against a Justice Department antitrust lawsuit. Now, as the court date approaches, both airlines have gone a step further by sending their own employees to Washington to make the case to policymakers.
About 300 flight attendants, pilots and others showed up on Capitol Hill this week. For a handful of them on a chartered flight from Phoenix, the trip began with a pep talk from US Airways CEO Doug Parker.
“It's nice for people to see how much this means for all of you, which I don't think they fully understand,” said Parker, who spoke over the public address system before take off. "Do us proud.”
Unions for the employees on this plane said their members have been paid at rates far below counterparts at other airlines, and that is why pilot Salihu Ibrahim was on the flight to Washington.
“The prospect of a merger just opens doors up that before would have been shut completely in our faces,” Ibrahim said.
That is because US Airways pilots are still operating on a bankruptcy contract left over from the days of the last merger with America West nearly a decade ago. Ibrahim said as a rookie US Airways first officer he made about $3,000 a month.
What if he worked for Delta? Ibrahim punched a few numbers into his phone and figured his Delta equivalent made about $2,000 more every month. With a family to support and student loans to worry about, the pay was not competitive.
“It does nothing for you, trust me on that one,” Ibrahim said.
If the deal is signed to create the world's largest airline, US Airways pilots have agreed to contract that would give them a 25 percent pay raise or more. If the deal fails, it is the status quo, and it is not just the pilots who stand to gain. A spokesman for the Transport Workers Union, which represents 20,000 various American Airlines employees, said its members would get an immediate 4 percent bump and $26,000 in stock equity.
“It probably is in the interest of the employees,” said Tom Horne, who is one of seven attorneys general nationwide that is signed on to the Justice Department's lawsuit.
“But I'm not an employee. I'm the attorney general charged with A: enforcing the antitrust laws and B: protecting the public interest," Horne said. "And this is not in the interest of the public.”
According to the federal government, the airlines compete on more than 1,000 routes where one or both offer connecting service. They say reduced competition would lead to higher fares and fees for million of passengers. Meanwhile, sending hundreds of airline employees to lobby Congress will not do much to affect the court case said the Consumer Travel Alliance's Charlie Leocha.
“Really it won't,” Leocha said. “And it is a dog and pony show. For them to bring everyone into Washington really won't have any affect on the Department of Justice deliberations.”
That did not stop uniformed pilots, flight attendants and their unions from trying to sway politicians to their side. They held a rally at the Capitol Wednesday and met with Congressional staffers and Department of Justice officials to explain how the merger will stabilize a battered industry.
Flight attendants for American Eagle, the regional airline owned by American Airlines' parent company, said they have not been promised anything if the merger goes through. (Photo by Peter O'Dowd-KJZZ
“If you talk to almost any airline employee they'll say, ‘Look back over my 20 year career and see what's happened to the airline business,'” said US Airways Spokesman John McDonald. “It's been a bloodbath, it's been losses, it's been job cuts. It's just been horrendous.”
But there is a contingent that worries a merger will continue the bloodbath. In the back of the crowd, a few protestors gathered from American Eagle, the regional airline that is owned by American’s parent company. They said their flight attendants have so far been left out of any talks about job security or better pay.
Plus, there will be layoffs if this merger goes through. Some non-union employees at US Airways' Tempe headquarters, people in human resources or accounting for instance, will almost certainly lose their jobs airline officials said.