US Airways reaches pact with flight attendants

US Airways Group Inc. has reached a tentative contract agreement with its 6,700 flight attendants, removing one hurdle in a potential merger with bankrupt American Airlines.

In 2005, US Airways was acquired out of bankruptcy by America West Airline. Management has been unable to reach contracts with the former "east" and "west" flight attendants and pilots, who worked for the predecessor US Airways and America West, because of seniority and wage disparities.

Pilots still do not have a unified contract. The major issue is seniority integration. Pilots from premerger US Airways have more years of service on average than pilots from the former America West.

Now there is fresh impetus for US Airways to reach labor peace because it would remove skepticism about whether the airline could make a merger work with American's flight attendants and pilots.

US Airways CEO Doug Parker, a proponent of industry consolidation, said Wednesday the carrier has hired advisers to explore a potential merger with American Airlines, which filed for bankruptcy reorganization on Nov. 29.

"We hope that there might be an urgency to get the contracts all settled, so that they can move forward" with a possible merger, said Capt. James Ray, spokesman for the U.S. Airline Pilots Association.

"Having open contracts, particularly the pilot contract, can be a big stumbling block for a merger," Ray said. "And now the pilots are the last ones left."

Pilots employed at the former US Airways, which went through bankruptcy twice in the last decade, have a provision in their current contract that if there is a "change of control" at the airline "our wages will snap back to pre-bankruptcy era wages, which would put us by far at the top of the industry," Ray said. "So they don't want that to happen."

On Thursday, the National Mediation Board advised US Airways and the pilots union that it was recessing negotiations for now.

"It's not unusual for the mediator and the mediation board to suspend mediation when they believe, if they recess the talks, it will assist the parties in reaching a deal in the longer term," said airline spokesman Todd Lehmacher.

The pilots union responded, in a statement, that the mediator did not indicate how long the "break" would be, and reminded both sides that they were free to continue to negotiate.

Aerospace analyst Ray Neidl of Maxim Group L.L.C. said "it would help" if US Airways "had agreements with the labor groups from the previous merger out of the way. It's not a necessity, but it would help."

Management has previously taken the view "it's up to the pilots to get their act together," Neidl said. "I guess management could try to put a little more pressure on the pilots to get their seniority agreement together. From what I understand, that's the big differential. The pilots between US Airways and America West can't agree on the seniority system."

If US Airways were to combine with American, the third-largest U.S. airline in passenger traffic, the new airline - likely to be called American - would be about the size of United Airlines and Delta Air Lines, largest airlines in the world.

"These negotiations have been arduous, frustrating, and far too long," the Association of Flight Attendants said in a statement Friday. "Until we gained the right to federal mediation, with oversight by the National Mediation Board, management did not take our members seriously. Now, they do."

Details of the deal were not disclosed. US Airways flight attendants are based in Philadelphia, Charlotte, N.C., Phoenix, and Washington, D.C.