The merger of United and Continental airlines into the world’s largest airline is a situation ripe for rumors.
After circulating among employees since the merger was announced a year ago, some rumors are spilling out to the flying public.
“It’s a match made in heaven,” said Jeff Smisek, chief executive of the new company, to be called United Continental Holdings.
Employees are feeling anything but heavenly. The $3.2 billion “merger of equals” has them concerned about job security, pay, benefits and home-base assignments.
“I don’t know if I will have to move. Moving? Over my dead body,” one United flight attendant said about the possibility that the Denver employee base would be moved to Houston, the home of Continental. She did not want to be identified out of fear for her job.
“We don’t comment on rumors or speculation,” United spokesman Mike Trevino said. “Not everything has been decided and implemented. Integrating the two airlines is certainly a complex process, and it will take some time to do.”
Trevino did echo Smisek’s comment that the integration is going well, with details being complex.
“We’re in the in-between phase until we get to the single operating certificate,” Trevino said, which he said should happen by the end of this year.
Until then, United and Continental will operate as separate airlines. However, Trevino said some areas can be integrated such as branding, signage, and policies and procedures.
United’s signage at Denver International Airport will get its makeover this fall. The airline will be referred to as United and its planes are being painted United colors with the Continental globe logo on the tail.
There is also concern about whether Denver will remain as a hub and as DIA’s largest airline.
When the merger was announced, airline officials said all 10 existing hubs would remain hubs after the merger, and all the cities they served would continue to be served.
Internal airline planning documents presented at an unsuccessful shareholder-lawsuit hearing last year showed otherwise. Denver was among those preliminarily tapped for reductions: 19 percent, a cut of 37 departures.
“Just tell us what the future will be in Denver,” one United ramp worker wrote on an online forum. “Give us time to find other jobs instead of stringing us along as you have been for the last three years.”
Aviation consultant Mike Boyd of Evergreen said there will be reworkings of aircraft and routes, but added emphatically, “Close the hub in Denver? Not going to happen.”
Ken Kyle, president of Denver Local Council 9 of the Association of Flight Attendants, said he’s heard the same rumors.
“I can’t say there is no truth to it, but we don’t know what upper management’s plans are,” Kyle said.
With what he and other United employees called a lack of information, reliance on “Facebook and Twitter does not help legitimize the rumor mill,” he said.
“There are a lot of things in play here,” Kyle said. “The most current thing is our representation election for a single union, and at the same time, there is this massive reorganization or blending of managements and operation of the two companies. It tends to spark a rumor.”
All of United’s unions — except the weather forecasters — are in negotiations.
Coupled with the financial fallout of the Sept. 11, 2001, attacks and United’s bankruptcy in 2002, “these are abused people,” Boyd said, noting they have endured more than a decade of labor turmoil.
United’s employees have “some baggage,” acknowledged Bob McGowan, a management professor at the University of Denver’s Daniels College of Business.
To ensure a smooth transition rather than “trying to jam people together sort of like a shotgun wedding,” McGowan urged quick decisions and open communications.
“The key is really good internal communications,” said McGowan, who teaches corporate strategy in mergers and acquisitions.
Trevino said regularly updated websites and a number of meetings, including one between Smisek and employees last month in Denver, keep employees informed.
As for labor, Trevino echoed what Smisek told shareholders late week: “We are focused on agreements that are fair to employees and the company.”
Ann Schrader: 303-954-1967 or aschrader@denverpost.com
Numbers
19% Denver departures that the combined United and Continental airlines considered eliminating — 37 flights — according to internal documents presented at a shareholder-lawsuit hearing
