AFA Merger Policy: Seniority & Job Protection

The state of the aviation industry is unsustainable. Over priced fuel, invasion of low cost carriers and over capacity plague the legacy carriers. All airlines are facing cutthroat competition, while some struggle merely to survive. Airline analysts predict massive consolidation of legacy carriers through merger, acquisition, sale, lease or liquidation to decrease capacity. We want to know what job protection we have as our airline faces the uncertainty of a corporate melting pot.

A Merger in Today’s Airline Industry

We all became very aware of the concept of a merger, when former United CEO Jim Goodwin, and other executives still at United today, spent millions on the 2000-2001 ill-fated merger with US Airways. That merger was cut short by a government regulators focused on concerns that the merger would result in a less competitive airline industry.

But oh, how things have changed in a few short years.

Today, we face a very different administration in the White House whose philosophy favors a hands-off approach by government, more likely to approve a merger despite any negative impact, particularly on employees. We also are faced with a vastly changed airline industry suffering from saturation of too many available seats and too much competition, and with failing carriers fighting to survive. As we know all too well, legacy carriers are slashing worker pay and benefits either in or out of bankruptcy in an attempt to compete in the new industry.

Within the past several months, airline analysts have been joined by airline CEOs and airline financiers in talk of industry consolidation. Recently, Glenn Tilton commented to investors in Brussels and New York that he believes our industry must consolidate. He stated, “just as telecom is plagued with over capacity and commoditization, so is the airline industry, which must follow and consolidate.” Although Tilton steered clear of specifics as to who may be the buyers or the sellers – he sent a clear message about his vision for our future.

It is nearly impossible to predict what a consolidation would look like today. If you read the Dallas papers, it will be American Airlines that swallows up United. If you read the Pittsburgh papers, United will again seek merger with US Airways. Ironically, it was only last year that it was rumored US Airways’ largest shareholder, the Retirement System of Alabama, may be considering purchasing United Airlines as a way to grow US Airways into profitability.

We can imagine a traditional concept of one airline or one corporation taking over another. Considering the possibility of an outside lender taking part in a hands-on reshaping of our industry by financing a massive takeover of several airlines changes the picture a bit. We must also consider the dangers of corporate lobbyists and interests of the European Union working to change US laws to allow for increased foreign ownership. Current law states that US citizens must own and control 75% of the voting securities of a US airline and two-thirds of the officers and directors must be US citizens. As our industry is desperate for access to additional liquidity, airline CEOs are intent on securing deals that insure their bonuses or golden parachutes. The crisis may open the door to corporate raiders, or it may prompt the Republican Congress to throw open the doors to foreign ownership. We face a host of variables for the future of our industry and we must be vigilant in protecting our jobs within this vast realm of uncertainty.

Seniority Protection for United Flight Attendants

Within all the uncertainty, however, we do have a measure of protection. Our AFA “current Flight Attendant seniority date” merger policy is a document of certainty in the event two AFA carriers are merged. It is a document that provides us support should we find ourselves defending our seniority before an arbitrator or a judge. For example, TWA Flight Attendants suffered greatly when American took over its operations, as all of the TWA Flight Attendants -- even long-term veterans – were tacked onto the bottom of American’s seniority lists. TWA Flight Attendants fought this in the courts, but their case was recently dismissed in its entirety by federal court; their seniority was lost forever. TWA Flight Attendants also joined forces with Missouri Senator Bond in an attempt to address the issue through legislation. Those efforts gained little attention and were also unsuccessful. Without an existing merger policy, TWA Flight Attendants had little more than vacant promises by American Airlines and APFA in preserving their seniority rights.

Until recently it would have been very difficult to imagine that United Airlines would be anything less than the buyer or surviving carrier in a consolidation scenario. United employees were always certain that our choice of employers had been a sound one: whether choosing an airline for the first time, making the difficult decision to switch airlines and leave behind accrued seniority at another viable carrier or being forced to find a new airline after being displaced from previous greats such as PanAm, Eastern or Braniff. Along this line of thinking, it was very tempting to believe that a merger policy that protects date of hire seniority for every Flight Attendant involved in a merger somehow seemed to discredit the “sound” decision we had made in our choice of airlines. This thought process made it difficult to find comfort in a policy that is rooted in recognizing each Flight Attendant’s years of service to the industry at their respective carrier. But today, we may be left to rethink our perspective and consider the protection afforded United Airlines Flight Attendants through our AFA merger policy.

The AFA Merger Policy

Recognizing that all Flight Attendants have similar duties and work in the same profession, AFA has an industry-leading policy for merging employee seniority lists. All AFA Members receive equal protection of their current seniority status in the event of a merger between two AFA airlines. The AFA “Merger Policy and Related Employee Protective Provisions” takes effect in the event of a merger, consolidation, acquisition of control, purchase, sale, lease or other similar transactions. The seniority merge is based on the date from which each Flight Attendant accrues bidding seniority as a Flight Attendant on her/his current seniority list.

Born in the late 1980’s, after the turbulence that followed deregulation of the industry, it is a powerful tool for protecting the seniority rights of Flight Attendants, and for easing the transition to newly combined work groups. It i s designed to eliminate the disputes that too often have plagued other work groups in a merger. Most importantly, this frees the newly merged Flight Attendant work group to focus efforts on protecting jobs and winning a new contract that includes the best protections combined from the previously separate agreements with the respective carriers.

While the policy focuses on mergers between AFA carriers where we as a Union would have the greatest amount of situational control, it also covers mergers with carriers whose Flight Attendants are not represented by AFA. The policy states, “ Seniority integration with a non-AFA carrier shall, to the extent legally possible, be accomplished by compiling an integrated seniority list in the same manner as provided for seniority integration between flight attendants on AFA carriers.” (The full text of the policy is posted on our website.) Disputes, if any, are resolved through negotiations with the other Union , or through arbitration if necessary.

Nuts and Bolts of the AFA Merger Policy

Here’s how it works under AFA’s system. Each affected MEC elects or appoints two Flight Attendants to serve on a seniority merger committee to review seniority records and prepare a preliminary, merged seniority list, giving each Flight Attendant full credit for his/her seniority. Next, the merger committee notifies each Flight Attendant at both carriers by certified mail of his or her seniority date.

Each Flight Attendant in turn has an opportunity to question the results. Mistakes made by the seniority merger committee can be corrected, but other adjustments are only allowed to account for differences in how seniority was assigned at the time of a Flight Attendant's initial training (i.e., whether a seniority number was assigned at the beginning or upon completion of initial training).

If any adjustment for training date differences is made, such adjustments cannot result in a Flight Attendant changing relative seniority positions on her or his own (pre-merger) seniority list. This prevents anyone from jumping over someone on their own list as a result of such an adjustment for training dates. The effects of earlier furloughs, leaves of absence, mergers and other factors remain in place for both groups in the current seniority merger process. Once corrections and adjustments are made, if any, then each Flight Attendant’s date of hire is finalized and the seniority lists are then merged into one combined list.

Once this process is finished, the list is then certified. Upon reaching an agreement with the surviving company over a merged collective bargaining agreement, the list is delivered to the company for implementation at the time of merger of operations. This helps to insulate our seniority from the whims of airline management as they decide whether to buy, sell, merge or acquire the airlines where we work. The fate of our seniority should never hinge on a corporate decision that is outside our control -- about which airline will survive and which will not in the event of a merger.

The AFA merger policy protects Flight Attendants. It ensures that every Flight Attendant gets treated in a fair and equitable manner. By smoothing the process, it frees Members to focus their energy on winning the best possible Contract to cover the entire new group.

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