US Department of Transportation Secretary Rodney Slater has met with United Airlines chief executive James Goodwin over labour disputes that have contributed to thousands of cancelled and delayed flights, but no immediate end to the troubles is in sight.
The dispute is chiefly with the airline's pilots. Their Air Line Pilots Association (ALPA) contract became amendable on 12 April and pilots have since then been calling in sick or refusing to work overtime. This - as well as weather-related problems and the opening of separate negotiations with another union - has forced United to cancel thousands of flights.
The resulting chaos at airports, customer dissatisfaction and negative headlines, could not come at a worse time for United, which is trying to push through a merger with US Airways. Newspapers and politicians alike are concerned about how things would be even worse if the two airlines become a single company. The Department of Justice's antitrust division, already preparing its case against the Continental Airlines-Northwest Airlines equity alliance, seems unlikely to look kindly on United's merger plans and such disputes will only bolster a negative view in Congress.
The DoT says that a meeting between Slater and Goodwin centred on the labour problems as well as more general issues of customer service standards and air traffic control problems. Goodwin admits the situation is "obviously unacceptable", but so far seems unable to fulfil a commitment to the Secretary to bring about a quick resolution.
United's second quarter results were strong, with net earnings of $374 million, on revenues of $666 million, up from $244 million last year.
The favourable results offset the effects of higher fuel prices and operational disruptions.
The airline warns in its outlook for the rest of the year that revenues could be significantly affected by costs related to the proposed merger with US Airways and labour integration issues, as well as the results of the labour disputes.
Source: Airline Business
