Bloomberg News

United Removes Strike Threat With Pilots Contract Deal

August 03, 2012

United Continental Holdings Inc. (UAL:US) reached an agreement with pilots on the main components of a new contract, moving the world’s largest airline closer to integrating its workforce after the 2010 merger.

Some issues that don’t involve compensation or rules governing what size aircraft are flown in the main jet fleet still must be settled, the Air Line Pilots Association told its members. The accord also must be voted on by pilot leaders and union members, United said in a statement.

The agreement removes the threat of a potential strike, a step approved by pilots on July 17 to protest the lack of progress toward a single contract after more than two years of bargaining. United had to negotiate a unified accord because pilots’ previous contracts differed over matters such as pay, benefits and scheduling.

“This agreement follows intense negotiations with our pilot group and is an important step forward for our company,” Fred Abbott, senior vice president for United’s flight operations, said in the statement.

Approval by rank-and-file union pilots would bring together work groups from the former United Airlines and Continental Airlines Inc., which completed their merger in October 2010. The combined company (UAL:US) flies as United Airlines and kept that carrier’s Chicago headquarters.

Contract ‘Value’

Pilot negotiators are “confident that we can reach satisfactory agreement” on remaining issues, the union said. Finalizing formal contract language and approval by union leaders and then members should be complete by the mid-fourth quarter, Jay Pierce, chairman of the ALPA unit at Continental, said in an interview.

“When I look at the cornerstones we established for wages, compensation, retirement, job security and quality of life work rules, I am very confident in saying we did what the pilots asked us to do,” he said. “You never get everything you want in a negotiation, but I think they will see value in this contract.”

Tensions had marked pilot-management relations in recent months. United warned pilots in June against misusing sick leave after noting an “abnormally high” rate of such reports, and union pilots protested a decision to remove secondary cockpit barriers from new Boeing Co. (BA:US) 787s.

The union, representing about 12,000 pilots at the combined airline, asked the National Mediation Board in April and again in June to declare talks with United at an impasse. That was one of several steps that must occur under federal law before the pilots would be allowed to strike.

United Continental rose 0.6 percent to $18.26 at the close in New York today. The shares have fallen 3.2 percent this year.

To contact the reporters on this story: Mary Schlangenstein in Dallas at maryc.s@bloomberg.net; Julie Johnsson in Chicago at jjohnsson@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net


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Companies Mentioned

  • UAL
    (United Continental Holdings Inc)
    • $45.47 USD
    • -1.32
    • -2.9%
  • BA
    (Boeing Co/The)
    • $124.67 USD
    • -2.71
    • -2.17%
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