"US Airways chief says labor problems worsening"

Tuesday, May 15, 2007

US Airways chief says labor problems worsening
By Dan Fitzpatrick
The Pittsburgh (PA) Post-Gazette


US Airways Chief Executive Officer Doug Parker, who failed last year in his
quest to take over Delta Air Lines, told shareholders today that the
industry still "needs" to consolidate but that his priority is to fully
integrate the operations of the old US Airways and the old America West
Airlines -- a process still incomplete almost 20 months after the merger. 

The Tempe. Ariz.-based carrier lacks single contracts covering its pilots,
flight attendants, mechanics and baggage handlers, all of whom want payback
for years of sacrifices through two bankruptcies at the old, Northeast-based
US Airways. 

Across the industry, the "labor issue is worsening," Mr. Parker said at the
airline's annual shareholders meeting, held this year in Philadelphia, where
the company employs 5,600 people. "More and more," he added, unions are
"looking to get more and more back. That is causing more and more strife
throughout our business."

Unions want to benefit from the dramatic turnaround at US Airways, which was
among the industry's most profitable last year with $303 million in gains.
It also was among the most profitable in the first quarter of 2007 despite
weather problems and a reservations system snafu that inconvenienced scores
of passengers and overloaded its airport employees, causing "undue grief"
Mr. Parker said. 

"If we don't start running a good airline, we will drive customers away and
that is not something any of us can tolerate."

US Airways is still the largest carrier serving Pittsburgh International,
responsible for about 47 percent of all traffic, and it still employs about
2,000 people in the Pittsburgh area after eliminating about 10,000 local
jobs since 9/11.

There are signs that an integration of cultures from the east and west will
be difficult to manage. Pilots from the old US Airways are upset with a
recent decision to strip them of certain seniority rights once they merge
ranks with pilots from the old America West. The seniority list determines
who gets the best pay, routes and vacations. US Airways pilots, as a group,
are older than the America West pilots, and they argue that pilots with
fewer years are now in line to take higher-paid captain's seats currently
held by the most senior pilots at the old US Airways, where the average age
of pilots is 53. 

There were no labor questions for Mr. Parker at today's annual meeting, held
at a Philadelphia area hotel. The only comment that bristled Mr. Parker a
bit was the implication made by one shareholder that Mr. Parker had not been
all that visible in Philadelphia, a major US Airways hub, since the merger.
"I have probably been here 25 times since the merger," Mr. Parker said. "I'm
sorry if I missed you."

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