Union officials are afraid that half of the 330 pilots employed by US Airways' MidAtlantic commuter division could lose their jobs if a U.S. bankruptcy judge approves a new investment deal with commuter carrier Republic Airways.
"That is my biggest, immediate concern," said Dan Von Bargen, a pilots representative from Philadelphia.
A bankruptcy judge is scheduled to rule tomorrow on the Republic agreement, which would provide US Airways with much-needed cash -- up to $235 million -- and help lift it out of bankruptcy this summer.
The deal, contingent upon US Airways finding another $100 million in investment capital, includes an option allowing Indianapolis-based Republic to purchase some or all of MidAtlantic's 28 new Embraer regional jets and fly them under the US Airways Express banner.
For MidAtlantic pilots, the issue comes down to whether the Republic deal represents a change in control or, if the jets exchange hands, simply an asset sale.
All 330 pilots would move to Republic's payroll if such a deal constitutes a "change in control," according to a contract agreed to by the pilots union last April.
But if the deal represents a sale of assets instead, Republic would be obligated to pick up only half the pilots.
Another complication is Embraer, which yesterday filed an objection in U.S. Bankruptcy Court to the potential sale of its aircraft to Republic.
US Airways and Republic have not clarified the "change in control" issue publicly, although US Airways has dropped some hints that the clause does not apply.
In a Mar. 14 press release, it said the "net effect" of the deal would be the "sale of US Airways MidAtlantic aircraft to Republic."
Moreover, in a March 15 conference call with analysts, Republic Airways Chief Executive Officer Bryan Bedford said he was not "in position" to talk about the labor implications of the deal. "As the situation develops, we will address those questions," he said.
A Republic spokesman could not be reached yesterday.
Pilots chairman Bill Pollock, who met with US Airways Chief Executive Officer Bruce Lakefield yesterday, acknowledged the concerns of the MidAtlantic pilots and promised to do all he could to secure jobs.
"Nobody wants to be furloughed," he said. "We worked hard to find a place for the furloughed pilots (at MidAtlantic) and we will still work hard to get as good a situation for them as we can."
Pollock and other pilots union officials who met with Lakefield relayed the fears of the MidAtlantic pilots who fly the airline's smaller 70-seat jets and earn far less than their mainline counterparts. The union officials plan to meet again today at a Coraopolis hotel to consider what action, if any, should be taken to protect the MidAtlantic pilots.
Billed in 2002 as a way to return US Airways to profitability, MidAtlantic now employs 649 overall in Pittsburgh, Philadelphia and Washington, D.C., with Pittsburgh serving as headquarters. The division employs furloughed US Airways pilots and is home to 224 workers locally.