UAL pilots leader pans possible merger with US Air
WASHINGTON (Reuters) - A "toxic stew" of problems with pilots and other issues at US Airways Inc (LCC.N) would imperil any merger between that carrier and United Airlines, the leader of the United pilots' union said on Tuesday.
While United has its own problems, the shortfalls at US Airways "run even deeper," said Steve Wallach, chairman of the Air Line Pilots Association (ALPA) chapter at United.
Wallach said in a statement that reports of advanced merger discussions between United, a unit of UAL Corp (UAUA.O) and US Airways on Monday have generated "enormous concern" among pilots at United.
They point to US Airways' financial and performance setbacks, as well as potential problems of combining work arrangements and seniority of union employees at both companies, if a merger were proposed.
US Airways has failed to integrate pilots following its 2005 merger with America West Airlines. Divisions over seniority have prompted pilots at US Airways to abandon ALPA and form another union.
The United pilots believe that problem alone could "imperil a United/US Airways" merger.
"US Airways' pilot integration problems have created a toxic stew, as any carrier that seeks to merge with it will quickly discover," Wallach said.
The United pilots urged management to focus on solving its own problems rather than continue with its "single-minded focus on consolidation."
Continental Airlines Inc (CAL.N) said on Sunday it pulled out of merger discussions with United in favor of exploring a marketing alliance with American Airlines, a unit AMR Corp (AMR.N) and British Airways Plc (BAY.L).
A source briefed on the matter said Continental was concerned with United's financial condition.
United reported a quarterly loss of $537 million in the first quarter.
United and US Airways have not commented on merger speculation.
United shares closed less than 1 percent higher on Tuesday at $14.93 on Nasdaq and posted a slight gain after hours.
US Airways shares, which rose sharply on Monday on reports of merger talks, were up another 4 percent on Tuesday at $8.96 on the New York Stock Exchange. The shares shed 15 cents after hours.
Airline shares were broadly higher on a sharp decline in crude oil prices.
Separately, US Airways reported that chief executive Doug Parker made $550,000 in base salary in 2007. He did not receive a bonus because the company did not meet its financial goals.
Parker also received stock awards valued at $3.9 million when issued, but worth only about $200,000 if sold today, Parker said in a memo to employees.
US Airways shares have fallen 75 percent during the past year.
(Reporting by John Crawley; Editing by Andre Grenon)
