In the Matter of the

Application of the

ASSOCIATION OF FLIGHT ATTENDANTS

alleging a representation dispute pursuant to Section 2, Ninth, of the Railway Labor Act as amended

involving employees of

ALLEGHENY AIRLINES, INC.

PIEDMONT AIRLINES, INC.

POTOMAC AIR

PSA AIRLINES, INC.
29 NMB No. 26

CASE NO. R-6862

(File No. CR-6733)

FINDINGS UPON

INVESTIGATION -

DISMISSAL

January 14, 2002

This determination addresses an application filed by the Association of Flight Attendants (AFA or Organization). The AFA requests the National Mediation Board (Board) to investigate whether Allegheny Airlines, Inc. (Allegheny), Piedmont Airlines, Inc. (Piedmont), Potomac Air (Potomac)1 and PSA Airlines, Inc. (PSA), collectively the Carriers, are operating as a single transportation system.

The weight of the evidence establishes that Allegheny, Piedmont and PSA do not constitute a single transportation system at this time. Therefore, the AFA's application is dismissed. This decision is based on the facts and circumstances of this case. Future changes on the Carriers may lead to a different result.

PROCEDURAL BACKGROUND

On September 6, 2001, the AFA filed an application alleging a representation dispute involving the Flight Attendants of Allegheny, Piedmont, Potomac and PSA. The AFA asserted that the Carriers constitute a single transportation system. The application was assigned NMB File No. CR-6733.

At the time the application was filed, AFA represented the Flight Attendants on Allegheny, Piedmont and PSA. The Potomac Flight Attendants were unrepresented.

The Board assigned Susanna Fisher to investigate.

On September 6, 2001, the Board requested the Carriers to provide information. Allegheny, Piedmont and PSA jointly responded on October 11, 2001. On October 18, 2001, the AFA filed a response.

On October 18, 2001, the Investigator gave all labor organizations representing the Carriers' employees an opportunity to comment on AFA's application. The Air Line Pilots Association (ALPA) and the International Brotherhood of Teamsters (IBT) submitted comments on November 7, 2001. The International Association of Machinists and Aerospace Workers did not comment. Allegheny, Piedmont and PSA and the AFA filed additional submissions on November 21, 2001.

BACKGROUND

US Airways Group, Inc. (US Airways Group) is a holding company whose operations consist of two main segments, US Airways, Inc. (US Airways) and US Airways Express. US Airways is the main operating arm of US Airways Group. Ten regional carriers provide commuter service under code share agreements with US Airways to operate under the trade name "US Airways

Express." Seven of these carriers, CCAir, Chatauqua Airlines, Mesa Airlines, Trans States Airlines, Air Midwest, Colgan Airlines and Shuttle America are independently owned. The three carriers involved in this determination, Allegheny, Piedmont and PSA, are wholly-owned subsidiaries of US Airways Group. The 10 regional carriers will be referred to collectively as "Express carriers."

Allegheny is based in Harrisburg, Pennsylvania, with flight operations concentrated in Boston, Massachusetts; New York - LaGuardia; Philadelphia, Pennsylvania and Pittsburgh, Pennsylvania. Piedmont is based in Salisbury, Maryland, with flight operations concentrated in Washington, DC; Philadelphia, Charlotte, Florida and the Bahamas. PSA is based in Dayton, Ohio, with flight operations concentrated in Pittsburgh.

ISSUES

Whether a single transportation system exists among Allegheny, Piedmont and PSA?

CONTENTIONS

AFA

AFA contends as follows:

Allegheny, Piedmont and PSA are "held out" to the public as a single transportation system, have integrated essential operations, are commonly owned and controlled, and have interlocking boards of directors.

US Airways "markets the operation of the various Express carriers as one seamless transportation system." US Airways Express customers call the US Airways reservation number or visit the US Airways website to make a reservation. AFA states:

Only when actually examining the available flights on the computer screen from which to choose is the customer informed that the specific flight is operated by US Airways Express, then finally by the name of the individual carrier.

"All reservations for the flights of the Carriers are provided by contract with US Airways." Since the Carriers do not maintain independent reservations systems, "without the US Airways reservations system, they would be unable to book any passengers." Express carrier tickets are printed on US Airways stock.

Common ownership and common control are factors the Board examines when making a single carrier determination. "[T]he corporate structure of the US Airways Express system proves that all of the wholly-owned express carriers" satisfy the common ownership and common control criteria supporting a single transportation system finding. USAir Inc./Shuttle Inc., d/b/a USAir Shuttle, 19 NMB 388, 412-414 (1992)

The Express carriers operate similar aircraft. For example, Allegheny and Piedmont use DeHavilland "Dash 8" models and PSA uses the Dornier 328. Some Allegheny and Piedmont aircraft "are jointly operated as 'exchange aircraft.'" Flight operations for all US Airways Express carriers are centrally located and "flight releases" for Allegheny, Piedmont and PSA look identical.

US Airways Express has its own trademark and logo. The Express carriers' aircraft are all painted the same (navy blue top with a grey belly). AFA states:

The only method by which one may visibly determine which Express carrier company operates a specific individual aircraft is to closely examine a small 6 x 8 inch corporate logo found to the right of the passenger entry door on the exterior sidewall of the aircraft. Notwithstanding this small identification, the US Airways Express logo and livery predominates.

The US Airways inflight magazine "Attache" is placed in the seat pocket on all Express carriers' aircraft, yet the magazine does not identify the individual Express carrier operating the flight. AFA also states that US Airways Express passengers are eligible to accrue frequent flyer miles in the US Airways "Dividend Preferred" program.

The Crew Rest/Lounge facilities are the same for all the Express carriers. "The public contact employees of the Express carriers also wear identical uniforms tailored to their particular job function." The only way to tell which Express carrier employs an individual is to look at the employee's identification card.

Ground operations on the Express carriers are integrated and the ticket and gate counters at airports served by the Express carriers are identified as "US Airways Express." The individual Express carriers are not listed by name anywhere in any of the airports served by US Airways.

An interlocking board of directors is one indicia of a single transportation system. When there is common control, the Board should find a single transportation system. AMR Eagle, Inc., 22 NMB 331 (1995). AFA states

Thomas Hanley, Thomas Mutryn and Gregory Taylor serve on the boards of the three carriers. The only individual on each board who does not sit on any other is the President and CEO of the individual company. Overall, the same Board controls all three carriers.

Allegheny, Piedmont and PSA

The Carriers contend as follows:

The Board should dismiss AFA's application because:

(1) Each carrier is a separate and distinct entity with separate corporate identification, corporate officers, formalities and headquarters;

(2) Each carrier has its own separate labor relations and employment policies;

(3) The Carriers are not commonly controlled; and

(4) The Carriers are not held out to the public as one carrier.

While US Airways Group elects three of the board members for each carrier, each carrier hires its own corporate officers and managers. Furthermore, the Carriers operate independently from each other and from US Airways and they have separate FAA operating certificates.

Allegheny, Piedmont and PSA share common ownership. However, Board precedent "suggests that it is only when common ownership results in the consolidation and centralization of operations and management that a single carrier determination has resulted." American Eagle, above, is distinguishable from this case because the Board's single carrier determination was based on "common control, not common ownership." American Eagle, above, is further distinguishable since the individual carriers did not handle "their own key operational functions, nor did they have their own separate management teams."

Pursuant to marketing agreements, US Airways handles the advertising for all 10 Express carriers. In addition, US Airways approves the schedules for all US Airways Express service and US Airways Express flight schedules are published in the US Airways'

System Timetable. However, all Express carriers are identified by name in the System Timetable and on the US Airways reservations website. Each Express carrier has its own unique range of flight numbers.

US Airways Express has its own trademark and logo. "Because more than one US Airways Express carrier may operate from any given airport, the ticket and gate counters display the US Airways Express logo, and do not distinguish the individual Express carriers by name." The Express carrier's aircraft is painted with the US Airways colors and carries the name "US Airways Express" and the name and/or logo of the individual Express carrier providing the service. Allegheny, Piedmont and PSA each have their own websites, publications, and business cards that identify the individual "operating carrier's trademark and/or logo."

Allegheny, Piedmont and PSA each have separate flight departments. Each carrier plans its own itineraries, routes, fueling and flight releases. Each carrier trains its pilot and crew and develops its own training curriculum. "As a result, the training curricula, flight operations manuals, safety manuals, and in-flight procedure handbooks are unique to each wholly-owned carrier."

Allegheny, Piedmont and PSA recruit, hire and train their own employees. They each have "their own separate and self-
contained maintenance departments."

Allegheny, Piedmont and PSA have separate customer service functions, however, each carrier "does not necessarily maintain a customer service function for each city in which they operate." Customer service functions for all Express carriers are provided in one of the following three ways:

(1) the carriers' own customer service/ramp agents at the particular city location;

(2) another carrier's customer service/ramp agents at the particular city location on a contractual basis; or

(3) US Airways' customer service/ramp agents at a particular location on a contractual basis.

Allegheny, Piedmont and PSA each have separate accounting and finance departments. Each carrier "develops its own budget that is then submitted to US Airways Express Division, and ultimately to US Airways Group for final approval."

The labor relations at Allegheny, Piedmont and PSA are decentralized. Allegheny, Piedmont and PSA each have separate collective bargaining agreements with AFA and all other unions, and handle labor grievances and discussions separately. Allegheny, Piedmont and PSA have their own policies and handbooks which cover medical, disability, workers' compensation, unemployment and pension benefits. In addition, each carrier administers its own payroll.

ALPA

ALPA supports AFA's application and requests that the Board hold evidentiary hearings to determine whether the Carriers constitute a single transportation system.

ALPA contends as follows:

Allegheny, Piedmont and PSA constitute a "single, coordinated component of the larger US Airways network." US Airways controls the Express carriers since US Airways senior officials hold three of the four seats on Allegheny, Piedmont and PSA's Board of Directors.

Allegheny, Piedmont and PSA management have the same relationship with US Airways as the Shuttle management did in USAir Inc./Shuttle Inc., d/b/a USAir Shuttle, 19 NMB 388 (1992).

In that case, the Board determined that USAir controlled labor relations at Shuttle.

IBT

The IBT opposes the application. The IBT contends that there is "[i]nsufficient exercise of actual common control among the three carriers or among any of the ten independent carriers that operate under the US Airways Express name to render them a single carrier for representation purposes."

FINDINGS OF LAW

Determination of the issues in this case is governed by the Railway Labor Act (RLA or Act), as amended, 45 U.S.C. §§ 151-
188. Accordingly, the Board finds as follows:

I.

Allegheny, Piedmont and PSA are common carriers as defined in 45 U.S.C. § 181.

II.

AFA is a labor organization as provided by 45 U.S.C. § 152, Ninth.

III.

45 U.S.C. § 152, Fourth, gives employees subject to its provisions, "the right to organize and bargain collectively through representatives of their own choosing. The majority of any craft or class of employees shall have the right to determine who shall be the representative of the craft or class for the purposes of this chapter."

IV.

45 U.S.C. § 152, Ninth, provides that the Board has the

duty to investigate representation disputes and to designate who may participate as eligible voters in the event an election is required. In determining the choice of the majority of employees, the Board is "authorized to take a secret ballot of the employees involved, or to utilize any other appropriate method of ascertaining the names of their duly designated and authorized representatives . . . by the employees without interference, influence, or coercion exercised by the carrier."

STATEMENTS OF FACT

Board of Directors

US Airways Group elects the board of directors for Allegheny, Piedmont and PSA.

Thomas M. Hanley, Vice President - US Airways Express Division; Thomas A. Mutryn, Senior Vice President, Finance and Chief Financial Officer for US Airways Group, and US Airways; and Gregory T. Taylor, Senior Vice President-Planning for US Airways, serve on the Board of Directors of all three Carriers. The only individual on each Board who does not sit on any other Board is the President and Chief Executive Officer of the individual carrier.

Corporate Officers

Allegheny, Piedmont and PSA hire their own corporate officers. With the exception of Jennifer C. McGarey, Secretary, there is no overlap of corporate officers at Allegheny, Piedmont and PSA.

Operations of Allegheny, Piedmont and PSA

I.

Flight Departments

Allegheny, Piedmont and PSA have separate flight departments. Each carrier plans its itineraries, routes, fueling and flight release. Each carrier also trains its pilot and crew as required by the FAA.

Thomas Hanley, Vice-President of the US Airways Express Division, submitted a declaration. Hanley states that the flight departments of Allegheny, Piedmont, and PSA are separate and independent from each other. According to Hanley, "[t]he training curricula, flight operations manuals, safety manuals, and in-flight procedure handbooks are unique to each wholly-owned carrier."

II.

Maintenance Departments

Hanley states that Allegheny, Piedmont and PSA have their own self-contained maintenance departments. Each carrier is responsible for its heavy aircraft maintenance and overhaul work; performing its FAA-required inspections; and performing line maintenance.

According to Hanley, each carriers' maintenance departments "hire and train their own mechanics, perform their own quality assurance and inspections and audits, and handle their own maintenance regulatory filings with the FAA."

III.

Customer Service Departments

Although each carrier has its own customer service department, it may not maintain a customer service function for each city in which it serves.

Customer service functions for all Express carriers, including the independently-owned carriers, are provided in a variety of ways. For example, PSA provides all customer service/ramp functions at the Pittsburgh location for all 10 Express carriers, on a contractual basis. Similarly, PSA contracts with Air Wisconsin to provide ramp service functions for PSA at the Lexington, Kentucky location.

IV.

Accounting and Finance Departments

According to Hanley, Allegheny, Piedmont and PSA "each maintain their own financial ledgers, operate their own payroll, pay their own invoices, make their own capital expenditures, and generate their own income statements." Hanley also states that each carrier "develops its own budget that is then submitted to US Airways Express Division, and ultimately to US Airways Group for final approval."

V.

Marketing and Advertising

US Airways approves the schedules for all 10 Express carriers. US Airways determines the city pairs each Express carrier flies, taking into account market factors. Occasionally, US Airways will reallocate a city pair from one Express carrier to another. The Express carrier's flight schedules are published in

US Airways' System Timetable and are identified by specific flight numbers.

When a customer makes a reservation on the US Airways website, the Express carrier is identified to the customer. According to Hanley,

[p]ursuant to its marketing agreements with its ten Express carriers, US Airways handles all advertising, distributes flight schedules and handles the Express carriers' promotions and ticket sales functions. In return, the Express carriers adhere to certain US Airways expectations and guidelines for the performance of air transportation services under the US Airways Express brand name.

A. Scheduling

The Express carriers' flight schedules are integrated and published as part of the US Airways system schedule and the individual city schedules. The Express carriers do not publish a separate schedule. The US Airways logo appears on the heading of each schedule on the website. When a customer books a reservation on the US Airways website, and the customer will be flying an Express carrier, the itinerary identifies the carrier as follows: "Flight: US Airways Express flight 3436 operated by US AIRWAYS EXPRESS-PIEDMONT AIRLINES".

If a customer selects the "more information" icon on the itinerary on the website, the flight is identified as a US Airways Express flight and lists the flight number. Further exploration on the website allows the customer to learn about the Express carriers. The website states,

US Airways Express is a network of ten regional airlines operating under a code share and service agreement with US Airways. This service offers

travelers frequent, well-timed flights to US Airways hub airports and cities throughout the U.S., Canada and the Bahamas. Like US Airways, we provide many important benefits, including the convenience of through fares, checked baggage, assigned seating and advance boarding passes. Plus every flight earns a minimum of 500 Dividend Miles for free travel to more than 500 destinations worldwide. More importantly, we provide customers with the same high level of service and reliability they receive on all US Airways flights.

B. Ticketing

Tickets for the Express carriers are printed on US Airways ticket stock.

C. Reservations

Reservations for the Express carriers are centrally handled by US Airways. A customer making a reservation by computer visits the US Airways website. After selecting the departure and arrival city, a list of options appears on the screen. When an Express carrier is listed as an option, it is listed as, "Flight: US Airways Express flight 3740 operated by US AIRWAYS EXPRESS-
ALLEGHENY AIRLINES on a DeHavilland Dash 8."

D. Signs and Logos

US Airways Express has its own trademark and logo. The ticket and gate counters display the US Airways Express logo and do not identify the individual Express carriers. The Express carrier's planes are painted with the same color scheme as the US Airways planes (navy blue top with a grey belly). The planes have the name "US Airways Express" on the exterior and the name

and/or logo of the Express carrier operating the flight, located on the passenger doorways of the airplane.

VI.

Uniforms

All Express carrier employees wear uniforms approved by US Airways.

VII.

Management and Control of Labor Relations

According to Hanley, Allegheny, Piedmont and PSA have separate human resources and labor relations departments. Each carrier hires and trains its employees in accordance with FAA requirements. However, US Airways and Piedmont developed a training program for ramp and customer service agents which is available to all ten Express carriers. Positions for crew members are advertised through job fairs and public advertisements, while senior executives are hired from the "open market."

Each carrier maintains its website that lists job openings for the individual carrier. For example, on Allegheny's website there is a listing under "Career Opportunities" for flight attendants. Interested applicants are advised to submit their resumes and applications to the individual carrier's human resources department.

Allegheny, Piedmont and PSA have separate collective bargaining agreements with AFA. According to Hanley, "[e]ach of

the carriers is responsible for handling their own contract negotiations with the different unions and handling their own disciplinary and grievance process with the unions."

Each Express carrier has its own policies and employee handbooks. Hanley states that each carrier "monitors it own employee attendance, handles its own payroll, and provides its own medical, disability, worker's compensation, unemployment and pension benefits."

DISCUSSION

I.

The Board's Authority

45 U.S.C. § 152, Ninth, authorizes the Board to investigate disputes arising among a carrier's employees over representation and to certify the duly authorized representative of such employees. The Board has exclusive jurisdiction over representation questions under the RLA. Switchmen's Union v. National Mediation Board, 320 U.S. 297 (1943); General Committee of Adjustment v. M.K.T. Railroad, 320 U.S. 323 (1943). In Air Line Pilots Association, Int'l v. Texas Int'l Airlines, 656 F.2d 16, 22 (2d Cir. 1981), the court stated, "the NMB is empowered to . . . decide representation disputes arising out of corporate restructurings."

II.

Single Transportation System

The Board finds a single transportation system only when there is substantial integration of operations, financial control, and labor and personnel functions. American Airlines and Reno Air, 26 NMB 467 (1999); AirTran Airways and AirTran Airlines, 25 NMB 429 (1998); Precision Valley Aviation, Inc., d/b/a Precision Airlines/Valley Flying Service, Inc., d/b/a Northeast Express Regional Airlines, 20 NMB 619 (1993); Air Wisconsin, Inc./Aspen Airways, Inc., 18 NMB 336 (1991).

The following are indicia of a single transportation system:

[W]hether a combined schedule is published; how the carrier advertises its services; whether reservation systems are combined; whether tickets are issued on one carrier's stock; if signs, logos and other publicly visible indicia have been changed to indicate only one carrier's existence; whether personnel with public contact were held out as employees of one carrier; and whether the process of repainting planes and other equipment, to eliminate indications of separate existence, has been progressed.

Other factors investigated by the Board seek to determine if the carriers have combined their operations from a managerial and labor relations perspective. Here, the Board investigates whether labor relations and personnel functions are handled by one carrier; whether there are a common management, common corporate officers and interlocking Boards of Directors; whether there is a combined workforce; and whether separate identities are maintained for corporate and other purposes.

Trans World Airlines/Ozark Airlines, 14 NMB 218 (1987). The Board also reviews whether the systems are held out to the public as a single carrier. Id.

The Board has noted that a substantial degree of overlapping ownership, senior management and boards of directors is critical to finding a single transportation system. Precision Valley/Valley Flying Service, above. In another determination, the Board found USAir had "the right to recommend individuals to fill the positions of director of operations, chief pilot and director of maintenance" for the USAir Shuttle. The USAir Shuttle Board of Directors was required to accept USAir's recommendations if the individuals were qualified in the "reasonable judgment" of the USAir Board of Directors. USAir Inc./Shuttle Inc., d/b/a USAir Shuttle, 19 NMB 388 (1992).

These facts do not exist in this case. While three of the four members of the Board of Directors at each carrier are US Airways Group officials, labor relations are handled by each of the Carriers separately. Moreover, Allegheny, Piedmont and PSA hire their own corporate officers and management team.

Allegheny, Piedmont and PSA have separate flight departments responsible for the individual carrier's flight operations. Each of the three carriers plans its own flight itineraries and fueling and flight release; trains its own pilots and crew per FAA regulations; and develops its own training programs. Allegheny, Piedmont and PSA have their own maintenance departments and hire and train their own mechanics and other employees. Although there is substantial coordination between Allegheny, Piedmont and PSA labor policies, each of the three carriers continues to maintain its own collective bargaining agreement with AFA. Each carrier handles its own employee relations such as medical benefits and attendance policies. Compare USAir/ USAir Shuttle, above, in which the Board found a single transportation system where the management agreement specifically delegated control over Shuttle collective bargaining to USAir.

Although the Express carriers' flight schedules are published in the US Airways' System Timetable, the individual Express carrier is identified by name. Additionally, the Express carriers are identified by name and flight number on the US Airways' website.

There is insufficient evidence presented here to conclude that Allegheny, Piedmont, and PSA each operate as a single transportation system.

CONCLUSION

The Board finds that Allegheny, Piedmont and PSA are not operating as a single transportation system for representation purposes under the RLA. Accordingly, the AFA's application in File No. CR-6733 is converted to NMB Case No. R-6862 and dismissed.

By direction of the NATIONAL MEDIATION BOARD.

Stephen E. Crable

Chief of Staff

Copies to:

Tom Jerman, Esq.

Keith D. Houk

Michael Scrobola

John Leonard

Kristen Collins

Steve Farrow

Richard Pfennig

Tim Keuscher

Dave Glenn

Edward J. Gilmartin, Esq.

Richard P. Wrede, Esq.

Jerry D. Anker, Esq.

Russell Bailey, Esq.

Marcus C. Migliore, Esq.

Robert Roach, Jr.

James Conley

David Neigus, Esq.

Ray Benning

Joshua D. McInerney, Esq.