Success of merger of Continental and United Airlines will depend on union support
Experts have said that the success of the expected merger of Continental Airlines and United Airlines will depend heavily on union support.
The Houston Chronicle has reported that integrating union workers has often been one of the toughest parts of airline mergers. The workers, who include pilots, baggage handlers and flight attendants, can disrupt operations if they're dissatisfied.
Harley Shaiken, a labor professor at the University of California, Berkeley, told the Chronicle, "The unions do play a very central role. Managements have generally sought to keep them out of these negotiations, but that can be very counterproductive. The ability to have a successful merger means they have to be on board."
The Post also said that although neither airline has confirmed merger talks, Continental's board met Friday on the merger and is to meet again Monday. Continental's pilots, flight attendants and mechanics are in contract negotiations.
Since Delta acquired Northwest in 2008 with pilot union support, more airlines have included unions in merger negotiations.
Gustavo Grullon, a finance professor at Rice University, said, "As a company, you want your employees to be happy, so making the union happy before making the merger is important. The union may also be afraid of downsizing, and that's a big concern, but at the same time they have to understand the company is going to be more stable financially."
Gary Chaison, a labor professor at Clark University in Worcester, Mass., said Wall Street will closely follow labor's reaction.
He said, "This is the way that it's going to be viewed on Wall Street: Are the unions in favor?" (With Inputs from Agencies)