USAir Group's $400 million acquisition of Pacific Southwest Airlines cleared its final hurdle late Sunday night when 3,800 Teamsters-represented employees ratified contract modifications that USAir had demanded as part of its bid for the San Diego-based airline.
The vote to accept the modified contract was concluded just minutes before a midnight deadline on Sunday, after which USAir had threatened to walk away from the deal.
The Teamsters represent PSA's flight attendants, mechanics, station agents and reservations agents. Each group had to approve the contract modification, and their votes ranged from overwhelming to bare approval.
USAir hopes to complete its acquisition of PSA by May 29, according to spokesman David Shipley. However, PSA will be operated independent from USAir until sometime after the first of the year, when the two airlines' operations will be merged.
Pilots Approve Pact
Several months ago, PSA's 695 pilots, who are represented by the Air Line Pilots Association, and some 50 members of to small unions ratified the contract modifications being demanded by USAir. PSA's shareholders voted to sell the airline to USAir during an April shareholders meeting and federal regulators have approved the merger.
However, PSA has had difficulty negotiating contract modifications from its Teamsters-represented employees. The deal almost fell apart last month when PSA and the Teamsters were unable to reach agreement before USAir's April 30 deadline. On April 29, USAir extended its deadline until midnight on Sunday.
The modified contract eliminated a provision that would have kept the Teamsters Union intact after the two airlines were merged, a provision that USAir had described as unacceptable. By accepting the modified contracts, PSA's Teamsters-represented employees have given up what one PSA executive has described as the "finest protective language in the airline industry."
Only 1,416 of USAir's 15,726 employees belong to the Teamsters Union. However, 5,300 pilots, flight attendants and mechanics belong to unions other than the Teamsters. With the modified contract in effect, PSA's Teamsters contract likely would expire when flight operations of the two airlines are merged.