Last month, American Airlines, British Airways, and Iberia announced a new joint business agreement on flights between Europe and North America. In a related move, the carriers also announced that they would file for worldwide antitrust immunity from the U.S. Department of Transportation and would notify the appropriate regulatory authorities in the European Union. Finnair and Royal Jordanian also are included in the antitrust immunity application. The Allied Pilots Association (APA), the union representing American Airlines pilots, immediately expressed concerns regarding the impact the business agreement could have on job security for the airline's 12,000 pilots. Now the pilots are asking the federal government to defer any ruling on American Airlines’ application for antitrust exemption to allow for a full examination of related national security, competitiveness and outsourcing issues.In a statement issued earlier today by the union, APA President, Capt. Lloyd Hill said, "Given the complexity of these proposed agreements, the many unknowns associated with them and other important considerations, we strongly recommend that any decision be deferred until a thorough analysis can be conducted.
"APA has major job-security concerns relative to what American Airlines is attempting to do, while other interested parties have voiced meaningful opposition to reduced competition among carriers. There simply isn’t time for the federal government to conduct an appropriately thorough investigation in a matter of weeks, as American Airlines management has advocated."
Security Considerations
Hill also pointed out that the government depends upon U.S. airlines to carry troops and supplies in wartime as the nation’s Civil Reserve Air Fleet.
"APA questions the wisdom of permitting national strategic-interest companies such as airlines to engage in what amounts to a virtual merger with foreign counterparts," Hill said. "I do not believe anyone fully understands the potential national-security ramifications of such a step."
Contractual Issues
According to APA, the union's current collective bargaining agreement precludes any joint business agreement between American Airlines and another carrier:
The contract’s "Scope" clause explicitly states that "All flying performed by or on behalf of the Company or an Affiliate shall be performed by pilots on the American Airlines Pilots Seniority List."In a letter this week to the CEOs of British Airways and Iberia, Hill questioned the advisability of entering into a joint business agreement with American Airlines at this juncture. He emphasized to the executives that APA has been rebuffed in its efforts to work with American Airlines management to address the airline’s widely reported operational shortfalls.
The clause does contain a series of exceptions for code-sharing agreements, commuter affiliate operations and other situations, but does not include any exception for a joint business agreement.
"Thus far American Airlines management has not negotiated any agreement with APA that would permit the airline to enter into a joint venture with British Airways and Iberia, which we firmly believe is a prerequisite," Hill said.
He also noted that management has permitted pilot staffing levels at American Airlines to fall below a specific contractual benchmark, triggering a provision that will soon enable APA to terminate the Scope exception that allows the company to utilize commuter air carriers in their system. In addition, Hill noted the absence of any contractual language permitting management to proceed with the joint business agreement.
