United Airlines (ContiUnited aka Continental and United Airlines merged) has a problem.   Continental pilots have enjoyed one of the most restrictive scope clauses in the industry so far and United pilots have seen quite a bit of mainline flying move from their group to being outsourced to regional airlines flying the CRJ-700/900.   Both parties are unhappy with outsourcing the flying and both see the merger and need for a new contract as the perfect opportunity to gain ground on this issue.

At the same time, United needs to keep its costs in line with rivals Delta and American Airlines and, if possible, lower.  To do that under the present day model, that means outsourcing even more flying to regional airlines.

As usual, I would suggest that both parties need to meet in the middle a bit.  Pilots (and other flight crew) could stand to permit lower wagese for this “regional” flying to keep it “in house”.  United needs to recognize that this is about job security and these pilots want some assurance that their seniority means something in bad times.  Neither party is going to get what they want or even a majority of what they want. 

And if this conflict blooms into a multi-year negotiation, things won’t be good for either side.  Pilots will lose out on salary increase opportunities and United will lose out on the synergies that this merger is supposed to provide. 

One solution could be to retain the 50 seat Continental scope clause but pilots permit a lower entry level wage for 51+ seat aircraft or even perhaps a “B” wage scale until a pilot moves into generally accepted mainline aircraft (say 125+ seats.)  The pilots could be permitted to use their seniority to retain a job in the lower pay scale in the event of a downturn and bad times displacing only the newest pilots and at the same time the airline could benefit from being able to use regional airlines for truly regional flying. 

CEO Jeff Smisek would be wise to get creative rather than tough here.  This is a real obstacle to realizing the benefits of his merger.

Filed under: Airline Fleets, Airline News by ajax