FOR D & H A R R I 5 0 NLLP

Transcription

1 FOR D & H A R R I 5 0 NLLP ATTORNEYS AT LAW th Street, NW Suite 700 Washington, DC Tel Fax Writer's Direct Dial: September 30,2011 DOUGLAS WARD HALL, (202) dhall@fordharrison.com VIA E-FILING Eileen Hennessey 1301 K Street, NW, Suite 250 East Washington, DC Re: TWU-Pinnacle/MesabaiColgan: File No. CR-7011 AFA- PinnaclelMesabaiColgan: File No. CR-7017 Dear Ms. Hennessey: As requested in your letter dated September 28,2011, we are writing to respond to the supplemental submission of the Transport Workers Union of America ("TWU"), dated September 27,2011, regarding the TWU's contention that the three airline subsidiaries of Pinnacle Airlines Corp. ("Pinnacle Corp.") - Pinnacle Airlines, Inc. ("Pinnacle"), Mesaba Aviation, Inc. ("Mesaba"), and Colgan Air, Inc. ("Colgan") - constitute a single transportation system under the Railway Labor Act with respect to the craft or class of Flight Dispatchers. We also are providing additional information relevant to your investigation of both the TWU's application and a similar application filed by the Association of Flight Attendants - CW A ("AF A") regarding the craft or class of Flight Attendants. In their submissions to the Board, TWU and AF A have neglected to focus on whether the carriers constitute a single transportation system with respect to the craft or class of Dispatchers or Flight Attendants. That is a critical omission in this case, given that the carriers do not contest that they may constitute a single transportation system with respect to their Pilots, in light of the integration of that work group among the carriers. The NMB, however, looks at the single carrier question independently for each work group. As was discussed at length in our previous submissions in these cases, the Dispatch and Flight Attendant groups at each of the carriers currently - unlike the Pilots - are separately managed, operated and staffed, with different wages, benefits, work rules, and policies applicable to them, and thus there is insufficient basis to find that any combination of the carriers constitutes a single transportation system. In apparent recognition of the futility of using current circumstances to argue that a single transportation system exists with respect to Dispatchers or Flight Attendants, AF A and TWU have focused primarily on what may occur in the future with the carriers. For that reason, it has been the carriers' position that the TWU and AF A applications are, at best, premature, in that it is the Board's consistent practice to base its single carrier determinations on existing circumstances, not on what might happen down the road. The wisdom of the Board's approach ATLANTA ASHEVILLE BIRMINGHAM CHICAGO DALLAS DENVER JACKSONVILLE LOS ANGELES MELBOURNE MEMPHIS MIAMI MINNEAPOLIS NEW YORK ORLANDO PHOENIX SPARTANBURG TAMPA WASHINGTON, DC

2 Page 2 has been demonstrated in these cases, as the plans that were being contemplated for the carriers previously have changed significantly over time. At the time of our initial response to the TWU petition (filed in April 2011), the tentative plan was that, at some point in time, the Mesabajet aircraft would be transferred to Pinnacle and the propeller operations of Mesaba and Colgan would be combined. The carriers hoped to accomplish this by late summer or early fall. Therefore, our response stated that there might be a time when a single carrier petition would be ripe between Mesaba and Colgan but not, in any event, with respect to Pinnacle, which would remain a separate carrier from the combined Mesaba/Colgan operation. The two entities would have their own management teams, labor relations and personnel functions, flying different routes and schedules with different aircraft types for different code share partners. We emphasized that the contemplated transaction had not yet occurred, and that it was unclear when it would occur, and if it would be completed precisely in the fashion that was envisioned at the time. Our point about the plans being uncertain and in flux was borne out by subsequent developments. As we noted in our supplemental submission in the TWU case and in our initial response to the AF A application (both filed in June 2011), the tentative plan to merge Mesaba and Colgan was discarded. Instead, the new plan was that, once Mesaba's jet aircraft were transferred to Pinnacle, Mesaba would remain as a stand-alone airline until Delta discontinued the Saab flying that Mesaba was performing for Delta, after which Mesaba would be shut down in its entirety. At that time, the carriers still hoped that this all would occur in late summer/early fall of 20 11, but because it remained uncertain when the transaction would take place, and whether it might continue to change, the carriers reiterated their position that the petitions were premature. Moreover, because the Dispatch and Inflight departments of the two post-transaction (i.e., "end-state") carriers would be managed and operated separately under the contemplated transaction, and because there no longer would be an operational combination of any sort between Mesaba and Colgan, the carriers' position was that there would not be a basis for finding any combination of the carriers to be a single transportation system. Today, the general end-state structure remains as it was envisioned in June Specifically, Mesaba's jet aircraft will be transferred to Pinnacle, and Mesaba personnel affected by that transfer will be offered positions at Pinnacle. Soon thereafter Mesaba will discontinue its propeller flying, cease operations, and surrender its operating certificate to the FAA. The endstate propeller operation will not perform any flying formerly done by Mesaba, nor will any of the Mesaba aircraft be transferred to that operation. The anticipated timing of the restructuring, however, has changed. Now, the transfer of the jet aircraft from Mesaba to Pinnacle is expected to occur in December 2011, with the Mesaba propeller flying being discontinued later that month. See Declaration ofw. Christopher Harrison ("Harrison Decl."), attached hereto, at ~~ 3-4. One thing that has not changed is that the end-state carriers are anticipated to be operated separately - particularly with respect to the Dispatch and Flight Attendant crafts or classes - in ways that have been cited by the NMB to support a finding that multiple carriers are not a single

3 Page 3 transportation system. For example, the two carriers will continue to have separate Certificates of Public Convenience and Necessity issued by the Department of Transportation and separate Air Carrier certificates issued by the Federal Aviation Administration. Harrison Decl., ~ 5. The Board has held that the fact that carriers "hold separate certificates strongly supports the Board finding separate transportation systems." NJL Inc.lNetJets Aviation, Inc., 37 NMB 186, 196 (2010) (citing GoJet Airlines, LLC and Trans State Airlines, Inc., 33 NMB 24, (2005), and Frontier Airlines, 24 NMB 635, 643 (1997)). In addition: Harrison Decl., ~~ 6-7. The carriers will fly very different aircraft - regional jets versus propeller-driven aircraft - with different markings and insignia; The carriers will fly for different code share partners (Delta in the case of the jet operations and United/Continental and US Airways in the case of the propeller operation); The carriers will fly different schedules and routes, as dictated by their code share partners; The carriers will have separate websites; The carriers will be responsible for their own hiring; The carriers will have separate department heads and managers for Operations, Maintenance, Flight Operations, Inflight, Safety, and Dispatch. With respect to the Dispatch and Inflight departments, the two end-state carriers will be totally separate, with their own personnel and management. For Dispatch, each carrier will have its own Director of System Operations Control, Manager of Dispatch, and Supervisors. For Inflight, each carrier will have its own department head (either a Vice President or Director), and separate management structure underneath the department head. There will be no overlap or interchange among the Dispatch or Inflight departments at the two carriers, either between the Dispatchers or Flight Attendants themselves or their management. Each carrier's Dispatchers will only dispatch that carrier's aircraft, and each carrier's Flight Attendants will only be able to work the aircraft of their own carrier. Indeed, neither the Dispatchers nor the Flight Attendants at one carrier would be permitted by federal regulation from dispatching or working the aircraft of the other: Harrison Decl., ~~ 8-9. This, too, supports a finding of separate carrier status. NJIINetJets, 37 NMB at 196 (fact that carriers' flight attendants could not fly on each other's aircraft supports finding that carriers were not a single transportation system). Labor relations will be handled separately at the two carriers with respect to Dispatch and Inflight as well. Specifically, for the end-state propeller operation, Dan Copp will continue in his current role as Labor Relations Manager for Colgan, responsible for all employee groups - union and non-union alike - except for Pilots. Likewise, for the end-state jet carrier, Don Seago will

4 Page 4 continue in his role as Labor Relations Manager for Pinnacle with respect to all work groups except for the Pilots. Consistent with the integrated status of the Pilots, Pinnacle Corp. recently hired a separate Labor Relations Manager, Alan English, whose sole responsibility is for the Pilots at all three carriers (and will continue in that role for the two end-state carriers). Messrs. Copp, Seago and English will report to Chris Harrison, the Vice President of Labor Relations at Pinnacle Corp. It is still anticipated that Mr. Harrison's primary responsibility will be with respect to the Pilots and with Pinnacle unionized work groups, and that he will not direct the labor relations regarding the other unionized work groups at Mesaba or Colgan. Harrison Decl., ~~ As pointed out in the TWU's most recent submission, Pinnacle Corp. recently decided that, effective January 1, 2012, it will implement consistent compensation and benefits packages for the employees at all of its airline subsidiaries. In the first instance, these changes have not yet gone into effect, and thus should not be considered by the Board in determining whether any combination of carriers currently constitutes a single carrier. NJIINetJets, 37 NMB at 196 (finding no single carrier where flight manuals and personnel policies were "being integrated, but they remain separate at this time"). Indeed, as things currently stand, Mesaba will have ceased operations by the time these changes are made, and thus certainly cannot be used to support the inclusion of Mesaba in any single transportation system. Moreover, though identity of benefits is a factor that has been cited by the Board as supporting single carrier status, it is not enough in this case, given the totality of the circumstances, to tilt the balance in favor of finding the two end-state carriers to be a single carrier. The events cited in the September 7,2011 from Doug Shockey and the September 19,2011 message from Sean Menke, both attached to the TWU's most recent submission, do not demonstrate that the carriers are a single transportation system with respect to the craft or classes of Dispatchers (or Flight Attendants, for that matter). As these communications make clear, the changes that were made - the elimination of the majority of the pro-rate flying that Colgan and Mesaba were doing for US Airways and the relocation of certain Colgan operations from Cleveland to Houston - were driven by the need to maintain a reliable operation in light of the implementation of key elements of the joint pilot contract (as well as by the pending approval of the slot swap between US Airways and Delta Airlines at LaGuardia airport, which made the elimination of such flying inevitable at some point).l Specifically, because of a "one-time 1 Under a "pro-rate" relationship, the regional carrier is compensated by its mainline partner based on the number of passengers actually transported, as opposed to the more beneficial (from the regional carrier's perspective) "fee for departure" structure, under which the regional carrier receives a fixed fee for each flight it operates, regardless of the number of passengers on board. In a "pro-rate" situation, the regional carrier is responsible for its own fuel costs and bears the revenue risk on the number oftickets sold. As noted in Mr. Menke's communication, once the swap slot between US Airways and Delta is approved, US Airways "will no longer be able to provide any feed traffic to our service network," which would have a "significant" impact on the profitability of such flying. Rather than wait until the swap slot approval was granted to terminate such flying, the decision was made to do so now.

5 Page 5 training surge related to the implementation ofthe integration seniority list for our pilots," a large number of pilots will be in training during the fall and thus unavailable to cover flights as currently scheduled. The Pilot-driven decision to discontinue unprofitable flying does not in any way impact the single carrier status of the Dispatcher and Flight Attendant crafts or classes. TWU also attempts to draw single carrier significance from comments made by Mr. Shockey and Mr. Menke referring to "our organization" or "our team members" in addressing the employees of all three airline subsidiaries. Notably, TWU does not cite to any Board precedent suggesting that such statements - made to boost employee morale during a time that flying is being eliminated and jobs may be lost - have any relevance in determining whether a single transportation system exists for representation purposes. CONCLUSION Pinnacle Corp. acquired Colgan in January 2007, and for more than four years, it operated Pinnacle and Colgan separately, without any organization filing a petition with the Board contending that they represented a single carrier. As far as the Dispatcher and Flight Attendant crafts or classes are concerned, the end-state carriers will continue to be operated and managed separately, just as they have been for years. In NJIINetJets, AFA successfully argued that the following factors supported a finding that the two carriers did not constitute a single transportation system, even though the carriers' parent company provided overall management of the enterprise, and such things as financial, legal, labor relations and human resources services were administered in an integrated fashion: The carriers had separate operating certificates. Each carrier had its own Chief Pilot and Chief Flight Attendant. Each carrier had its own scheduling department and travel department. The carriers had their own websites. The carriers did their own hiring, training and aircraft maintenance. The flight attendants were qualified only to fly the aircraft of their own carrier. There was no plan to integrate the flight attendants of the two carriers. 37 NMB at These same facts are anticipated to exist with respect to the end-state carriers. Harrison Decl., ~~ 5-6. Thus, even if it were not premature for the Board to make a single carrier determination for the end-state carriers at this time, there would not be a sufficient basis to conclude that a single carrier would exist between them.

6 September 30,2011 Page 6 For all of the reasons stated herein and in our prior submissions in these cases, the TWU and AF A single carrier petitions should be dismissed. cc: Chris Harrison, Esq. All counsel of record smcet/;~ DIu~AS WARD HALL DC:!05263.!