Delta merger talks must include pilots, union boss says
By RUSSELL GRANTHAM
The Atlanta Journal-Constitution
Published on: 12/13/07
Any successful merger talks involving Delta Air Lines will have to include the pilots union from the start, the union's top leader says.
"Any consolidation attempt involving Delta will fail if it does not involve Delta's pilots in the formative stage and does not provide adequate protection and added value for Delta's pilots in any consolidated entity," union chairman Lee Moak said Thursday in a letter to pilots.
institutional shareholder, Pardus Capital, urged management in November to combine with United Airlines in a stock-swap deal. The New York hedge fund, which owns shares in both airlines, hired retired Continental Airlines Chief Executive Gordon Bethune to talk up the proposed merger among other investors.
So far there's been no indication that other investors are pushing a Delta-United combination. But worsening industry conditions could continue to fuel speculation.
On Thursday, German carrier Lufthansa reached an agreement to buy a 19 percent stake in discount carrier JetBlue Airways. Airline shares have dropped significantly amid investor fears that rising jet fuel prices and a weakening economy could undermine the industry's recovery from years of losses.
"We are not opposed to consolidation, could support a rational consolidation strategy, and at some point may even determine that consolidation is desirable," he said.
He said Delta will have to emerge from any deal a stronger carrier, and it will have to "reward the pilots for their participation as stakeholders in the transaction, and will provide the necessary platform for long-term growth in pilot earnings and career progression."
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1 comment:
The dynamics of coalitions and the payoffs received depend a lot on the bargaining power of all the players, even when they are small as we saw in the Baltic Pigments case. In this article union pilots express their position on future possible coalitions. The union pilots are definitely a stakeholder in a posible deal involving Delta however so far they have not been included as a player in the game. Voicing their opinion and showing the power that they have, their point of view will be considered in future negotiations and possibly will be satisfied. This article is another proof that even small players can change the rules or the expected outcomes in a game.
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