US Airways sees AMR merger as solution to pilot seniority woes

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US Airways sees a merger with American Airlines parent AMR as a "fresh beginning" for its pilots contract woes, said airline president Scott Kirby at the Bank of America Merrill Lynch transportation conference in Boston.

Former America West Airlines and former US Airways pilots, which still have separate contracts with the airline following the carriers' 2005 merger, would move to a new contract with American pilots once they agree to an integrated seniority list, said Kirby. Integration of the seniority lists could be achieved under binding arbitration mandated by the federal McCaskill-Bond statute that was passed in 2007.

The incentive to do so would be large pay increases for the pilots under the new contract, he added.

"I feel this is the way out of the box for them," said Kirby.

The airline has already reached an agreement with the Allied Pilots Association, which represents American's pilots, that could be implemented if a merger were to take place.

Kirby said that it is in talks with the US Airline Pilots Association regarding a possible merger and joint contract. The union represents both the former America West, often referred to as West, and former US Airways, referred to as East, pilots.

US Airways claims that its contract with American's pilots would reduce the latter's proposed cost cuts to $800 million from $1.2 billion due to differences in employee productivity and pension provisions in the agreement.

A joint labour agreement between the East and West pilots was not negotiated due to disputes over the integration of the groups' seniority lists at the time of the merger. "The side that didn't like it could prevent a joint contract," said Kirby.

Kirby did not comment on how former TWA pilots would be treated under a joint contract. The former St. Louis-based carrier's pilots request for a seat on American's unsecured creditors committee was denied by the bankruptcy court in March.

American bought the St. Louis-based airline in 2001.