Muscle flexing at the rumour mill

The unions are ready for it. The analysts are ready for it. The media and blogosphere are ready for it, but are the airlines ready for consolidation? Rumours of merger, much as Matthew and Mark commented on rumours of war flexing%2520muscle.jpg in their Gospels, are grabbing the attention of the US airline unions, Wall Street observers and journalist-speculators. Plunging share values have brought some airline stocks to near all-time lows, making a potential takeover cheaper to do, and as investors, frustrated with the sector’s inactivity, walk away from airline shares, merger and consolidation speculation has taken foot. But the unions are not to be left out, even if they have to put their feet down. Or on the picket line. The largest cabin crew union, the Association of Flight Attendants, has just concluded a two-day strategy session in Washington to set negotiating tactics if their carriers seek a merger, and the Air Line Pilots Association chapters at Delta and at United – the two most-mentioned merger movers – are flexing their muscles in preparation.
Labour is not silent, though, and on Thursday, Delta’s chapter of Image2GeneralStrike.png ALPA told its members that it was vigilant in watching the direction consolidation does or doesn’t take. “Consolidation may indeed be at our door,” said Lee Moak, the master executive council chairman at Delta’s ALPA group. He added, “While we have increasingly been hearing about ‘inevitable consolidation’ for many years, it is becoming increasingly difficult to discount these facts and other recent evens as simply more rhetoric.” Moak went on to say that the union had reactivated its strike preparation committee. At United, the ALPA chapter has been making similar noises since late last year.

The Association of Flight Attendants says it has plenty of muscle solidarity.jpg to flex because so many of its contracts will open up for negotiation this year and next, and the union is preparing ways to share its leverage with other labour groups including the Transport Workers Union. If the splintered flight attendant groups can work together, they said, they can achieve some of the clout that the pilot have through ALPA, which represents all the major carriers except American.
Delta is thought of as a prime mover because it was last year’s takeover target when US Airways launched an unsolicited and ultimately unsuccessful bid, while United is also high on the list because its chairman, Glenn Tilton, has advocated merger for more then a year. Delta set up a special committee to explore merger possibilities late last year, but a spokesman says the carrier will not issue any day-to-day comments or updates – unlike chief executive Richard Anderson’s unusual step last year of explicitly denying merger talks with United. Other carriers including frequent rumour-target Northwest were similarly reticent.

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One Response to Muscle flexing at the rumour mill

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