American Airlines pilots want decision on carrier's anti-trust immunity postponed

by B. N. Sullivan

In August of this year, American Airlines (AA), British Airways, and Iberia signed a joint business agreement on flights between Europe and North America in a plan "to expand their global cooperation." The carriers are asking for worldwide antitrust immunity from the U.S. Department of Transportation, and regulatory authorities in the European Union. Finnair and Royal Jordanian are included in the antitrust immunity application. The Allied Pilots Association (APA), the union representing pilots at American Airlines, expressed concerns regarding the impact the business agreement could have on job security, among other issues. Today the pilots reiterated their job security concerns, particularly in light of the ongoing economic downturn, asking U.S. officials to defer a decision on AA's business deals with foreign carriers.

In a statement to the press, APA President Captain Lloyd Hill said, "Because of the potential for further job losses in the nation’s airline industry, we urge Congress and the outgoing Bush Administration to withhold judgment on American Airlines’ application for worldwide antitrust immunity and related joint business agreement until a thorough assessment can be conducted."

"Just last week the U.S. suffered the biggest monthly job loss in 34 years," Hill went on. "Right now there is understandable concern about the many jobs that would be lost if one of our nation’s automakers were to fail.

"The last thing our nation’s economy needs is even more layoffs in the airline industry. Accordingly, APA urges the federal government to proceed with caution," he said.

The union's primary concern is that that if American Airlines' deals are approved, the carrier’s employees face the prospect of having their jobs outsourced to overseas workers.

Hill described last week’s announcement that British Airways is seeking to acquire Australian airline Qantas as a "further wrinkle" in an already complex and unprecedented web of international deal-making. The Courier-Mail, Brisbane, Australia’s daily newspaper, reported that a merger between British Airways and Qantas could generate savings by "cutting jobs, and duplication of routes and services," illustrating the impact on workers and flight schedules when former competitors join forces.

"We believe the best course of action right now for policymakers is to ‘do no harm’ by postponing any decision on these deals until a thorough assessment is conducted," said Capt. Hill. "It is our sincere hope that before reaching any decision on American Airlines' plans, policymakers clearly understand where these deals could lead."

American Airlines, British Airways, and Iberia applying for antitrust immunity

Today American Airlines, British Airways and Iberia announced that they "have signed a joint business agreement on flights between Europe and North America and plan to expand their global cooperation." In similarly worded press releases issued by each of the carriers, the airlines said that they will file for worldwide antitrust immunity from the U.S. Department of Transportation and will notify the appropriate regulatory authorities in the European Union. Finnair and Royal Jordanian are included in the antitrust immunity application.

According to the news releases:

Under the joint business agreement, the three airlines will cooperate commercially on flights between the United States, Mexico, and Canada, and the European Union, Switzerland, and Norway while continuing to operate as separate legal entities. They will expand their codeshare arrangements on flights within and beyond the EU and U.S., significantly increasing the number of destination choices that the airlines can offer customers.

The airlines all are members of the oneworld® global airline alliance. A press release was issued by oneworld® in support of the application for anti-trust immunity.

Crew Response

The Allied Pilots Association (APA), the union representing the 12,000 pilots at American Airlines, issued a statement about the multi-airline business agreement, calling it "problematic on several fronts." In particular, the APA cites the "scope clause" of the contract between the APA and American Airlines, which "embodies management’s promise that if a flight generates revenue for AMR Corp., an American Airlines pilot must be at the flight controls."

The scope clause contains a variety of exceptions for code-sharing agreements, commuter affiliate operations and other situations where an American Airlines pilot is not in control of an aircraft that generates revenue for the corporation. However, APA President Capt. Lloyd Hill points out that the scope clause in the current collective bargaining agreement does not include an exception for a joint business agreement between American Airlines and another airline. "Management therefore needs APA’s consent before this joint business agreement can go forward," said Capt. Hill.

Hill noted that APA representatives met last week in Washington, D.C. with their counterparts from the British Airways and Iberia pilot unions to explore common interests and identify areas of concern. The meeting was prompted by the previously announced plans by American Airlines and the other two carriers to pursue antitrust immunity. He also noted that APA’s board of directors will convene next week to discuss the joint business agreement and antitrust immunity application.

"Make no mistake, we want American Airlines to succeed, but that success cannot come at the expense of the employees," Hill said. "We have serious job-security concerns that must be addressed as part of any revenue-producing agreement with another airline."

As of this writing, there has been no public comment from the British Air Line Pilots Association (BALPA), which represents British Airways pilots, regarding the joint business agreement announced today by American Airlines, British Airways and Iberia.

Separately, BALPA came out in favor of recent merger talks between British Airways and Iberia. A BALPA news release issued late last month states:

"We have been anticipating this for some time. We are already in discussions with the pilot association in Spain.. We support these merger talks. Consolidation within the airline industry is inevitable and a merger of BA with Iberia makes good sense.

"We trust the two companies will take their pilots fully into the process and consult with BALPA and the Spanish pilots' association very closely indeed. Pilots have a lot to offer in the planning stages and want to be full partners in this enterprise."

BALPA does not expect a merger between British Airways and Iberia to result in the loss of any pilot jobs.

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