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America West pilots reject contract by 5 votes
Tuesday December 2, 5:03 PM EST
By Kathy Fieweger
CHICAGO, Dec 2 (Reuters) - America West Airlines pilot union on Tuesday rejected by just a few votes a tentative contract deal calling for an 11 percent pay increase.
Captain Terry Stadler, the head of the pilots union, said 1445 pilots represented by the Air Line Pilots Association voted on the tentative agreement, which was struck in October.
Of that number, 725 pilots rejected the contract and 720 approved it. Had it been approved, the pay increase would have been the first since 1995 for pilots of America West, which was operating in bankruptcy protection in the early 1990s.
America West is charging ahead with a low-fare strategy and has forecast a profit in 2004.
Stadler said no particular issue was cited as a stumbling block. The contract talks focused on issues of pay, retirement benefits, so-called scope clauses and scheduling matters.
"I think it goes across a wide spectrum of issues," said Stadler of the reason for the contract rejection.
The National Mediation Board has been arbitrating the contract talks between Phoenix-based America West, a unit of America West Holdings Corp. (AWA), and the union. Stadler said it would now be up to the NMB to decide what to do next.
"We have been told that we will not be released to a 30-day cooling off period," Stadler said, indicating a strike by pilots is not likely.
In March, the pilots rejected the first contract deal, which also called for an 11 percent wage hike, because of concerns over retirement and job security.
America West Chief Executive Doug Parker said in a statement the company was disappointed in the voting results.
"While we look forward to eventually reaching a new agreement with our pilots, in the meantime, we will continue to work together under the terms of our existing contract," Parker said.
THIRD TIME'S THE CHARM?
Jamie Baker, airline analyst at J.P. Morgan, said that given the reported closeness of the vote, he did not think the next tentative agreement will need major sweeteners to win approval.
According to Baker, the rejected deal called for an 11 percent wage hike and an additional 3 percent in 2007, along with one-time pension contributions of $12,000 per captain and $7,500 per first officer. That would put America West's pilot pay between that of rivals Frontier Airlines Inc. (FRNT) and JetBlue Airways Corp. (JBLU).
"We had previously estimated incremental $30 million in pretax pilot expense during year one (of the contract,) or $0.25 (per share) in full-taxed earnings," he said. "Final contract costs will likely be slightly higher.
Shares of America West fell $1.13, or 7.3 percent, to close at $14.35 on the New York Stock Exchange.
America West pilots reject contract by 5 votes
Tuesday December 2, 5:03 PM EST
By Kathy Fieweger
CHICAGO, Dec 2 (Reuters) - America West Airlines pilot union on Tuesday rejected by just a few votes a tentative contract deal calling for an 11 percent pay increase.
Captain Terry Stadler, the head of the pilots union, said 1445 pilots represented by the Air Line Pilots Association voted on the tentative agreement, which was struck in October.
Of that number, 725 pilots rejected the contract and 720 approved it. Had it been approved, the pay increase would have been the first since 1995 for pilots of America West, which was operating in bankruptcy protection in the early 1990s.
America West is charging ahead with a low-fare strategy and has forecast a profit in 2004.
Stadler said no particular issue was cited as a stumbling block. The contract talks focused on issues of pay, retirement benefits, so-called scope clauses and scheduling matters.
"I think it goes across a wide spectrum of issues," said Stadler of the reason for the contract rejection.
The National Mediation Board has been arbitrating the contract talks between Phoenix-based America West, a unit of America West Holdings Corp. (AWA), and the union. Stadler said it would now be up to the NMB to decide what to do next.
"We have been told that we will not be released to a 30-day cooling off period," Stadler said, indicating a strike by pilots is not likely.
In March, the pilots rejected the first contract deal, which also called for an 11 percent wage hike, because of concerns over retirement and job security.
America West Chief Executive Doug Parker said in a statement the company was disappointed in the voting results.
"While we look forward to eventually reaching a new agreement with our pilots, in the meantime, we will continue to work together under the terms of our existing contract," Parker said.
THIRD TIME'S THE CHARM?
Jamie Baker, airline analyst at J.P. Morgan, said that given the reported closeness of the vote, he did not think the next tentative agreement will need major sweeteners to win approval.
According to Baker, the rejected deal called for an 11 percent wage hike and an additional 3 percent in 2007, along with one-time pension contributions of $12,000 per captain and $7,500 per first officer. That would put America West's pilot pay between that of rivals Frontier Airlines Inc. (FRNT) and JetBlue Airways Corp. (JBLU).
"We had previously estimated incremental $30 million in pretax pilot expense during year one (of the contract,) or $0.25 (per share) in full-taxed earnings," he said. "Final contract costs will likely be slightly higher.
Shares of America West fell $1.13, or 7.3 percent, to close at $14.35 on the New York Stock Exchange.
