BEFORE THE

NATIONAL MEDIATION BOARD In the Matter of the Application of the ASSOCIATION OF FLIGHT ATTENDANTS-CWA, AFL-CIO alleging a representation dispute pursuant to Section 2, Ninth, of the Railway Labor Act involving employees of UNITED AIR LINES, INC. and CONTINENTAL AIRLINES, INC. ______________________________________

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Case No. CR-7002

STATEMENT OF POSITION

BY UNITED AIR LINES, INC. AND CONTINENTAL AIRLINES

ROBERT A. SIEGEL O’MELVENY & MYERS LLP 400 South Hope Street Los Angeles, CA 90071-2899 (213) 430-6000 e-mail: rsiegel@omm.com CHRIS A. HOLLINGER O’MELVENY & MYERS LLP Two Embarcadero Center, 28th Floor San Francisco, CA 94111-3823 (415) 984-8700 e-mail: chollinger@omm.com Attorneys for United Air Lines, Inc. and Continental Airlines, Inc.

TABLE OF CONTENTS Page

PRELIMINARY STATEMENT ................................................................................................... 1

I. STATEMENT OF FACTS ................................................................................................ 2

A. PRE-MERGER OPERATIONS OF UNITED, CONTINENTAL AND CMI........................................................................................................................ 2

1. United Air Lines, Inc ................................................................................. 2

2. Continental Airlines, Inc............................................................................ 3

3. Continental Micronesia, Inc....................................................................... 3

4. Existing Labor Protective Provisions ........................................................ 4

B. CREATION OF A SINGLE TRANSPORTATION SYSTEM............................. 4

1. The Merger Between United And Continental .......................................... 4

2. Integration of United and Continental Management ................................. 5

3. Centralized Control of Labor Relations..................................................... 6

4. Common Personnel Policies and Administration ...................................... 7

5. Adoption of Common Corporate Name and Logo .................................... 9

6. Holding Out to the Public as a Single Transportation System................. 10

7. Combined Routes and Schedules............................................................. 12

8. Standardized Uniforms ............................................................................ 13

9. Integration of Ground Operations............................................................ 14

C. COMPOSITION OF THE CRAFT OR CLASS OF FLIGHT ATTENDANTS ................................................................................................... 15

1. Representation of Flight Attendants at United......................................... 15

2. Representation of Flight Attendants at Continental................................. 15

3. Representation of Flight Attendants at Continental Micronesia.............. 16

II. STATEMENT OF POSITION ........................................................................................ 17

A. THE BOARD SHOULD CONCLUDE THAT UNITED, CONTINENTAL AND CMI CONSTITUTE A SINGLE TRANSPORTATION SYSTEM FOR PURPOSES OF COLLECTIVE BARGAINING UNDER THE RAILWAY LABOR ACT ................................. 17

1. United and Continental Constitute a Single Transportation System ....... 18

2. The United-Continental Single Transportation System Includes CMI.......................................................................................................... 19

B. THE BOARD SHOULD CONDUCT AN ELECTION AMONG FLIGHT ATTENDANTS OF UNITED AND CONTINENTAL TO DETERMINE REPRESENTATION RIGHTS ........................................................................... 20

CONCLUSION............................................................................................................................ 21

PRELIMINARY STATEMENT

On January 19, 2011, the National Mediation Board (“NMB” or the “Board”) served

notice on United Air Lines, Inc. (“United”) that the Association of Flight Attendants-CWA,

AFL-CIO (“AFA”) had filed an Application for Investigation of Representation Dispute dated

January 18, 2011 (the “Application”), alleging a representation dispute among Flight Attendants

employed by United and Continental Airlines, Inc. (“Continental”).1 AFA asserts – and the

carriers agree – that the merger of United and Continental has resulted in a “single transportation

system” under applicable NMB authority. AFA asserts – and the carriers agree – that the single

transportation system includes United and Continental. The carriers submit that Continental

Micronesia, Inc. (“CMI”), a subsidiary of Continental, also is part of the single transportation

system arising from the United/Continental merger.2 The Flight Attendants at Continental and

CMI are represented by the International Association of Machinists and Aerospace Workers

(“IAM”).

As set forth in an earlier notice filed by United and Continental pursuant to the NMB’s

Merger Procedures, the corporate merger between United and Continental was effective on

October 1, 2010. The objective of the merger was to create a single airline operating under the

United name, and the two carriers are rapidly pursuing that goal. While complete integration of

flight operations will not be possible until the Federal Aviation Administration (“FAA”) issues a

single operating certificate, a process that takes up to a year or more, the carriers now constitute

1 The NMB’s January 19 letter is formally addressed to Jeff A. Smisek, as President and CEO of United Continental Holdings, Inc. (“UCH”). This tracks the AFA’s Application, which lists UCH under the entry “Name of Carrier.” UCH, however, is not a “carrier” within the meaning of the Railway Labor Act. It is a corporate holding company which has two wholly-owned carrier subsidiaries: United and Continental. The NMB’s January 19 letter and accompanying Notice to Employees properly describes the pending representation dispute as involving the flight attendants of United/Continental (as opposed to UCH). 2 Neither the AFA’s Application, nor the Board’s January 19 letter and accompanying materials, makes specific reference to CMI.

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a single transportation system within the meaning of the NMB’s rules and case law. As detailed

below, United and Continental are now commonly owned, with a single, shareholder-elected

Board of Directors, they have combined management at the officer level, including labor

relations and personnel functions, and will have common management within a combined

organizational structure at all levels within the first quarter of 2011. The customer

communications, advertising and other marketing efforts describe “the new United” as a

combined company, with the most comprehensive route system and best frequent flyer program

in the industry. These communications have also emphasized that the carriers will be integrating

operations in stages over the next year and will combine into one airline after obtaining a single

operating certificate from the FAA. Finally, the carriers are well along in the process of

integrating policies and practices, routes and schedules, livery, uniforms and other indicia of a

single transportation system, and are on schedule to integrate many customer service functions at

the airport level during the Spring of 2011.

Accordingly, United and Continental now operate as a single transportation system

consisting of United, Continental and CMI. Because AFA and IAM represent a comparable

number of Flight Attendants, the proper resolution of AFA’s Application is to conduct an

election among all United, Continental and CMI Flight Attendants.

I. STATEMENT OF FACTS

A. PRE-MERGER OPERATIONS OF UNITED, CONTINENTAL AND CMI

1. United Air Lines, Inc.

Prior to the merger, United Air Lines, Inc. was a wholly-owned subsidiary of UAL

Corporation (“UAL”). It is headquartered in Chicago, Illinois, and operates approximately 3,400

flights a day on United and United Express to more than 230 U.S. domestic and international

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destinations from its hubs in Los Angeles, San Francisco, Denver, Chicago, Washington, D.C,

and Tokyo. McKeen Decl. ¶ 2.

2. Continental Airlines, Inc.

Prior to the merger, Continental Airlines, Inc. was a publicly-held company with its

headquarters in Houston, Texas. It operates approximately 2,200 daily departures, including

regional flights operated on Continental’s behalf by other carriers, throughout the Americas,

Europe and Asia. It serves approximately 117 domestic and 127 international destinations and

has hubs serving New York, Houston, Cleveland and Guam. McKeen Decl. ¶ 3.

3. Continental Micronesia, Inc.

Continental Micronesia, Inc. is a subsidiary of Continental that operates B-737 and B-767

aircraft to approximately 20 destinations in Asia from a hub in the U.S. territory of Guam. CMI

began service as Air Micronesia in 1968, and was renamed Continental Micronesia in 1993 after

it was acquired by Continental. CMI is entirely managed by Continental, its aircraft bear the

Continental livery, its ground operations use only the Continental name and logo, and its flights

are marketed through the Continental reservations offices and website. McKeen Decl. ¶ 4.

Historically, CMI had its own operating certificate, but as a result of the merger between United

and Continental, Continental determined it would seek to combine the Continental and CMI

operating certificates as a predicate to ultimate issuance of a single operating certificate for

United and Continental (including CMI). On December 22, 2010, the FAA granted

Continental’s request and issued a new operating certificate covering both Continental and CMI.

McKeen Decl. ¶ 5.

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Although CMI’s Flight Attendants are governed by a collective bargaining agreement

with the IAM which applies only to CMI, Continental and CMI already function as a single

carrier with regard to Flight Attendants.3 McKeen Decl. ¶ 6.

4. Existing Labor Protective Provisions

In transmitting AFA’s application to United, the NMB asked United to state whether any

of the employees affected by the merger are covered by labor protective provisions. All of the

affected employees are entitled under the McCaskill-Bond Amendment to the benefit of Sections

3 and 13 of the Allegheny-Mohawk Labor Protective Provisions formerly issued by the Civil

Aeronautics Board, and most of the existing collective bargaining agreements include a

contractual obligation to the same effect, but there are no labor protective provisions applicable

to the transaction similar to the complete set of Allegheny-Mohawk Labor Protective Provisions

or the Labor Protective Provisions issued by the Surface Transportation Board in connection

with railroad transactions. McKeen Decl. ¶ 7.

B. CREATION OF A SINGLE TRANSPORTATION SYSTEM

1. The Merger Between United And Continental

On May 2, 2010, UAL and Continental entered into an Agreement and Plan of Merger

(“Merger Agreement”) under which UAL would acquire all of the outstanding stock of

Continental. Following governmental and shareholder approvals, the Merger Agreement became

3 The NMB has never dealt directly with whether Continental and CMI should be treated as a single carrier. In some cases not involving flight attendants, the NMB appears to have treated CMI as a separate carrier without specifically analyzing whether CMI was part of a single transportation system with Continental. E.g., Continental Airlines/Continental Micronesia, 27 N.M.B. 76 (1999); Continental Micronesia, 22 N.M.B. 189 (1995). But those decisions pre-date the recent combination of the CMI and Continental operating certificates. On the other hand, the existing certification for the Air Line Pilots Association (“ALPA”) at Continental, Continental Airlines, 28 N.M.B. 473 (2001), is based on a transfer of the certification issued in 1993 to the Independent Association of Continental Pilots (“IACP”), Continental/Continental Express, 20 N.M.B. 326 (1993). In the IACP case, the NMB identified Air Micronesia as a subsidiary of Continental, and at one point defined “Continental” to include Air Micronesia, id. at 328, but the Board did not clearly state whether Air Micronesia was part of the single transportation system that the NMB found to exist in that case. In Case No. CR-7000, both ALPA and Continental/United have taken the position that CMI should be included in the single transportation system with United and Continental.

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effective on October 1, 2010. Pursuant to the Merger Agreement, UAL has been renamed

United Continental Holdings, Inc. (“UCH”), and United and Continental are now wholly-owned

subsidiaries of UCH. All of the outstanding stock of UAL Corporation and Continental has been

converted into stock in UCH, which is traded under the symbol UAL. UCH reported its 2010

financial results on a consolidated basis. McKeen Decl. ¶ 8.

UCH has a single Board of Directors, elected by the combined group of former UAL and

Continental shareholders, consisting of a combination of former UAL and Continental directors

and two labor representatives appointed pursuant to agreements between United and ALPA and

the IAM. Glenn Tilton, former Chief Executive Officer of UAL and United, now serves as non-

executive chairman of the UCH Board of Directors. Jeffery A. Smisek (“Smisek”), former Chief

Executive Officer of Continental, now serves as President and Chief Executive Officer of UCH,

United and Continental. McKeen Decl. ¶ 9.

2. Integration of United and Continental Management

On October 1, 2010, the boards of UCH, United and Continental approved the

appointment of approximately 60 officers of the combined companies – eight executive vice

presidents, 15 senior vice presidents and 38 vice presidents who hold identical positions with

both United and Continental. This includes Vice President-Inflight Sam Risoli. These

appointments cover all officer positions at the combined entity except for a few positions at the

carriers that will be occupied only during the transition period. Concurrent with the appointment

of common officers, the executive offices of the two carriers were combined, and all senior

executives have relocated (or are in the process of relocating) to the existing United offices in

Chicago, Illinois. McKeen Decl. ¶ 10.

Within weeks after the merger became effective, the carriers began a selection process to

fill all managing director and director positions at the combined carrier with a single manager

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holding the position for both carriers. Each department will announce these appointments

separately, but nearly half of all of the managing director and director positions for the combined

company have already been filled and the remainder will be filled by the end of January 2011.

Inflight’s management leadership for the new United’s bases has also been named. Following

appointment of managing directors and directors, the departments will begin the process of

selecting individuals who will fill the next layer of management, with almost all of those

appointments anticipated during the first quarter of 2011. McKeen Decl. ¶ 11.

3. Centralized Control of Labor Relations

As part of the appointment of a single management team, United and Continental

appointed a single group of officers responsible for labor relations at both carriers. Michael

Bonds, formerly the chief labor and human resources officer for Continental, is now Executive

Vice President – Human Resources and Labor Relations for both carriers. P. Douglas McKeen,

formerly Senior Vice President – Labor Relations for United, is now Senior Vice President –

Labor Relations for both carriers, reporting to Bonds. Daniel Casey, formerly Staff Vice

President – Labor Relations for Continental, is now Vice President – Labor Relations for both

carriers, reporting to McKeen. These officers are now responsible for labor relations at both

carriers. McKeen Decl. ¶ 12.

At the time of the Merger Agreement, virtually all of the collective bargaining

agreements in effect at both carriers had become amendable and the two carriers were in the

midst of Section 6 negotiations with most of the unions. Following the merger announcement,

the two carriers offered to enter into joint collective bargaining negotiations with any unions that

desired to do so. Only ALPA, which represents Pilots at both carriers, accepted this offer. In

July 2010, the carriers entered into a Transition and Process Agreement with ALPA, and

combined bargaining teams began full-time, off-site negotiations for a joint collective bargaining

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agreement in August 2010. On December 17, 2010, United, Continental and ALPA jointly

applied for mediation by the NMB in order to reach a joint collective bargaining agreement.

McKeen Decl. ¶ 13.

The other unions representing employees of United or Continental elected to continue

Section 6 negotiations on a stand-alone basis. United and Continental are nonetheless ready and

willing to begin joint collective bargaining negotiations with any union that desires to do so.

McKeen Decl. ¶ 14.

4. Common Personnel Policies and Administration

The personnel functions of the two carriers have already been combined under the

leadership of Bonds. R. Douglas Rose, formerly Vice President – Total Rewards of United,

serves as Vice President – Human Resources for the combined company, with responsibility for

strategic planning of human resources, compensation and benefits for all 80,000 employees, and

Donna Towle, formerly Senior Director of Human Resources for Continental, serves as Vice

President – Employee Relations, with responsibility for management of a large team of employee

relations representatives serving the combined company. McKeen Decl. ¶ 15.

Under the supervision of these officers, United and Continental are rapidly developing

and implementing a single set of personnel policies that will govern all employees of the

combined carrier. On the first day of the merger, October 1, 2010, the combined company issued

uniform personnel policies in a number of areas, including the primary personnel policy

governing all employees of the combined carriers, “Working Together Guidelines.”4 These

guidelines include a policy known as “Working Together Expectations,” a set of employee

personnel guidelines that replaced United’s various Articles of Conduct and Rules of Conduct

4 These guidelines became effective for the Flight Attendant group on November 26, 2010. McKeen Decl. ¶ 17.

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and Continental’s Working Together Expectations. The combined company on October 1, 2010,

also implemented a common policy on Equal Employment Opportunity, a common dress code

for non-uniformed employees that permits “business casual” attire, and changes to the existing

employee travel policies that provided a number of reciprocal benefits for employees of both

companies. The combined company has since implemented a common perfect attendance

reward program, and a common on-time bonus program. McKeen Decl. ¶ 16.

Common employee communication vehicles were also implemented on October 1, 2010.

“Flying Together” is a common “landing page” or homepage for the existing intranet systems

used by United and Continental for communication with and among employees and the two

intranet systems will be completely integrated as soon as technologically feasible. “United

Daily” is a daily newsletter, replacing United’s NewsReal and Continental’s Daily News, that

serves all employees of the combined company. The carriers will also publish United World, a

newspaper-style communication distributed to the combined employee group on a monthly basis,

and United Connections, a magazine-style publication that will be distributed quarterly. McKeen

Decl. ¶ 18.

Beginning January 2011 and continuing through March 1, 2011, the carriers will issue

additional personnel policies governing the combined company, including a common profit

sharing program; a common solicitation policy; a common smoke-free workplace policy;

common holiday schedules for management and non-union employees; a common policy on

adverse condition office closings; and a common vacation schedule policy for management and

non-union employees. Beginning on March 1, 2011, the carriers will implement a common

policy on seniority and service credit; a common policy on company bulletin boards; and a

common performance management statement. The combined company will continue to

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harmonize the two carriers’ remaining personnel policies and procedures during 2011,

implementing new policies as they are developed. During 2011, the company will also announce

a common benefits package for all non-union employees of the combined company that will be

implemented on January 1, 2012. McKeen Decl. ¶ 19.

The combined company also recently adopted a new compensation structure for

management employees that replaces the existing compensation structures at both carriers. Each

functional department within the combined company has developed plans for a new, combined

organizational structure and the carriers are in the process of developing migration plans that will

guide the transition from the existing separate organizations to a single, combined organization

over the next year. McKeen Decl. ¶ 20.

5. Adoption of Common Corporate Name and Logo

In the Merger Agreement, the two carriers agreed that the combined airline would be

known as United, but that it would adopt a livery and marketing identity consisting of the United

name and the Continental colors and logo. The use of the new livery and logo will occur in

stages over the next year. McKeen Decl. ¶ 21.

The aircraft operated by the two carriers will be repainted in the new livery as those

aircraft are taken out of service for regularly-scheduled maintenance visits. More than 200

aircraft have been repainted in the new livery and additional aircraft with the combined livery are

entering service on a regular basis. Until issuance of a single operating certificate, the newly

repainted Continental aircraft will carry the statement “Operated by Continental Airlines.”

Aircraft operated by United’s and Continental’s regional partners will also be repainted in new

livery with the marketing name United Express, and repainting of those aircraft will be

accomplished on a schedule similar to mainline aircraft. McKeen Decl. ¶ 22.

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More wide-spread use of the new marketing identity by United will occur during the

same time period as Customer Day One, a date to be determined in the Spring of 2011 when the

carriers will implement changes to the existing reservations systems that will permit both carriers

to handle airport check-in at kiosks for customers of either carrier. United will implement airport

signage with the United name and Continental logo at many airports on or about Customer Day

One. The Continental name and logo will continue to be used to designate Continental’s

separate airport operations until the carriers can combine flight operations under a single

operating certificate. McKeen Decl. ¶ 23.

6. Holding Out to the Public as a Single Transportation System

Immediately after the Merger Agreement became effective on October 1, 2010, the two

carriers began to hold themselves out to the public as a single transportation system that will be

gradually integrated into a single airline over the following year. This message has been

communicated to all customers of both carriers since October 1, 2010, through e-mail messages

from new CEO Smisek to members of both carriers’ frequent flier programs; through

advertisements in national media outlets, shortly after the Merger Agreement became effective,

with the slogan “United and Continental. One Airline. Your network just got better;” through

similar slogans and information posted on the carriers’ respective websites; through a video by

Smisek shown as part of pre-flight announcements on both carriers; through articles by Smisek

about the merger published in the two carriers’ inflight magazines; and through various other

media. McKeen Decl. ¶ 24.

The substance of the current marketing message is illustrated by an excerpt from one of

the articles by Smisek:

“[O]n October 1, 2010, Continental and United completed the first step in our merger . . . and started our journey toward becoming the new United. The new United will be the world’s leading airline, with the most comprehensive route network and leading frequent

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flyer program. I am proud to lead a team of more than 80,000 co-workers as President and CEO of the combined company. “Throughout the upcoming months, you’ll gradually see changes as we integrate operations, but today it’s ‘business as usual’ for you. We will continue to operate as two separate airlines under one holding company for a year or more . . . . “Behind the scenes, we’re working hard to integrate our policies and products. Our first area of focus is to make changes that will permit us to handle customers in a seamless and efficient manner, to bring as many of the benefits to you, as quickly as we can. We expect to be able to do that sometime next spring.”

McKeen Decl. ¶ 25; Exhibit 1. In this and similar messages, the combined company has made

clear to the public that although it will take time to integrate the two carriers fully, United and

Continental are now a single transportation system.

Many of the integration efforts have already occurred. In October 2010, the carriers

integrated frequent flyer and airport club benefits so that frequent flyer program and club

members at both carriers receive benefits and club access while flying on either carrier. While

the carriers will not merge the United MileagePlus and Continental OnePass programs into a

single program until the end of 2011 because of the lead time required to merge computer

systems, in October 2010 the carriers began counting flights on either carrier toward elite status

under both programs, and began providing elite members of either program with reciprocal

access to complimentary upgrades and preferred economy seating on both United and

Continental flights. The carriers’ airport lounges, currently known as the Red Carpet Club and

the Presidents’ Club, are now available to members of either club and the Red Carpet Clubs, on

October 1, 2010, adopted the Presidents’ Club policy of offering free wireless internet access and

complimentary alcoholic beverages. The clubs will adopt a single, new name in coordination

with Customer Day One during 2011. McKeen Decl. ¶ 26.

Beginning in November 2010, both carriers published extensive information about the

merger and the other carrier’s operations in their inflight magazines, including the article quoted

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above by CEO Smisek. Both magazines now include a combined route map and airport

diagrams for all major airports served by either carrier, and the carriers plan to publish a single

inflight magazine, which will be called Hemispheres like the current United inflight magazine,

for both carriers beginning in February 2011. Specifically, the consolidated magazine will

include consolidated network maps as well as joint content and will be distributed across both

networks, with a United version that will include certain United-specific details and a

Continental version that will include certain Continental-specific information. McKeen Decl. ¶

27.

Although the carriers will continue separate advertising for the legacy brands until March

2011, even these separate advertising campaigns mention the merger. For example,

Continental’s advertisements have emphasized that the merger will be a benefit for existing

customers, with slogans such as “You’re going to like where we land” and, in a humorous vein,

“Your wife changed her name. You still like her.” The carriers will then deploy an advertising

campaign under the United name during 2011. McKeen Decl. ¶ 28.

7. Combined Routes and Schedules

At the time of the merger, United and Continental had highly complementary route

structures, with very little overlap, and they had maintained a code-sharing and alliance

agreement for two years under which a large number of flights were already operated under both

the UA and CO codes. The carriers have since implemented changes to align schedules in the

twelve markets in which they had overlapping flights and have placed the UA and CO codes on a

number of additional flights where the carriers believed it made sense to operate under both

codes. Where flights carry both codes, they can be purchased through either carrier’s website or

reservations centers. McKeen Decl. ¶ 29.

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Beginning in 2011, the carriers will begin further to integrate routes and schedules by

redeploying certain aircraft (and associated crews) from existing United routes to existing

Continental routes – and vice versa – in order to better match the size of the aircraft with the size

of the market and/or to meet seasonal traffic fluctuations. Additional redeployment, which

includes both mainline and express aircraft, will occur in stages continuing through 2012.

McKeen Decl. ¶ 30.

The carriers plan to complete integration of flight operations under the United name

following issuance by the FAA of a single operating certificate for United and Continental. The

carriers obtained approval from the FAA of a transition plan for moving to a single operating

certificate in October 2010, and currently expect that the FAA will issue the single operating

certificate in the last quarter of 2011 or first quarter of 2012. As a predicate to obtaining that

single operating certificate, Continental determined that it would seek to combine the

Continental and CMI operating certificates so that when the FAA issues the single operating

certificate to United and Continental, it will include CMI. The FAA recently granted

Continental’s request and issued a new operate certificate covering both Continental and CMI.

McKeen Decl. ¶ 31.

8. Standardized Uniforms

The carriers have already begun to adopt designs and select manufacturers for common

uniforms for all uniformed work groups. Because of the lead time required to test, order and

manufacture uniforms for the number of uniformed employees employed by the combined

carrier, the company does not anticipate implementing common uniforms for all employees until

2012. In the meantime, however, the carriers will issue common uniform accessories such as

branded pins that will give employees who have contact with the public the appearance of

common uniforms. McKeen Decl. ¶ 32.

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9. Integration of Ground Operations

While integration of flight operations will not be possible until receipt of a single

operating certificate from the FAA, the carriers plan to integrate airport customer service

operations in a number of ways during the first half of 2011. McKeen Decl. ¶ 33.

The carriers have already relocated the other carrier’s operations to the same terminal at

22 airports – including hubs in Chicago, Denver, Houston, Narita, and Newark. The carriers

have also consolidated operations at most other hubs and expect to complete hub consolidation

for all but one hub in the first quarter of 2011. The schedule for combining ticket counters and

gates at other airports at which both carriers operate is being developed based on lease

agreements and approval requirements from the local airport authorities. Subject to these

constraints, the carriers will seek to consolidate ticket counters and gates at other airports

beginning in January 2011. The carriers are also in the process of consolidating other airport real

estate – e.g., offices, break rooms, storage facilities and the like – wherever possible and have

already consolidated facilities in Cleveland and Salt Lake City. McKeen Decl. ¶ 34.

The most significant changes prior to consolidation of flight operations will occur on

what the carriers are calling Customer Day One, a date to be selected in Spring 2011 when the

carriers will implement a number of changes, including changes to the existing reservations

systems that will allow passengers to seamlessly use the airport kiosk self-service systems of

either carrier. The exact date of Customer Day One will depend on completion of necessary

technological and training tasks. McKeen Decl. ¶ 35.

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C. COMPOSITION OF THE CRAFT OR CLASS OF FLIGHT ATTENDANTS

1. Representation of Flight Attendants at United

In 1977, the Board certified AFA as the representative of Flight Attendants at United.

United Airlines, Inc., Case No. R-3459. On January 27, 2004, the Board transferred the AFA’s

certification to the Association of Flight Attendants - Communications Workers of America,

AFL-CIO (AFA - CWA), following the merger of the two unions. United Airlines, Inc., 31

N.M.B. 160 (2004). AFA currently represents 13,425 Flight Attendants on active or leave status,

and another 1,734 Flight Attendants on voluntary furlough status.5 United and AFA are parties

to a collective bargaining agreement that became amendable on January 7, 2010 (“AFA

Agreement”). McKeen Decl. ¶ 36.

Flight Attendants at United are responsible for “performing or assisting in the

performance of all cabin safety related functions, all en route cabin service or ground cabin

service to delayed or canceled passengers in a resourceful manner.” AFA Agreement §2(M).

Under current terminology, a Flight Attendant, who guides other Flight Attendants in the

performance of this work on aircraft with more than one assigned Flight Attendant, is called a

“Purser.” Id. The position of “Flight Attendant,” which includes the position of “Purser,”

constitutes the entire craft or class of Flight Attendants at United. McKeen Decl. ¶ 37.

2. Representation of Flight Attendants at Continental

On November 15, 1976, in Case No. R-4670, the Board certified the Union of Flight

Attendants as the representative of Flight Attendants at Continental. Continental Air Lines, Inc.,

6 N.M.B. 88 (1976). Following Continental’s merger with Texas International Airlines, the

Board certified the UFA as the representative of Flight Attendants of the merged carrier in Case

5 The number of Flight Attendants reflected in this position statement refers to the numbers of employees listed in the Statement of Position by United Air Lines and Continental Airlines in Case No. CR-7000, filed January 5, 2011.

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No. R-5352. Continental Airlines, Inc., 10 N.M.B. 126 (1983). The UFA thereafter merged with

IAM, and the Board formally transferred the UFA’s certification to IAM on October 31, 1990.

Continental Airlines, Inc./Air Micronesia, 18 N.M.B. 40 (1990). In 1993, the Board extended

that certification to Continental Express. Continental Airlines/Continental Express, 20 N.M.B.

582 (1993). IAM currently represents 9,293 Continental Flight Attendants on active or

authorized leave status. Continental and IAM are parties to a collective bargaining agreement

that became amendable on December 31, 2009 (“IAM Agreement”). McKeen Decl. ¶ 38.

Flight Attendants at Continental are responsible for “performing or assisting in the

performance of cabin service, standby duty, ground service, and related duties.” IAM

Agreement §2-4(L). A Flight Attendant who directs and oversees this work is known as a “First

Flight Attendant” or “International Service Manager.” §§ 2-3(K), 2-5(P). McKeen Decl. ¶ 39.

The work performed by Continental’s Flight Attendants (which includes First Flight

Attendants and International Service Managers) is substantially similar to the work performed by

the craft or class of Flight Attendants at United. McKeen Decl. ¶ 40.

3. Representation of Flight Attendants at Continental Micronesia

On November 3, 1982, the Board certified, in Case No. R-5337, the UFA as the

representative of Flight Attendants at Air Micronesia. Air Micronesia, 10 N.M.B. 54 (1982).

When the Board transferred the UFA’s certification as representative of Continental Flight

Attendants to IAM in 1990, the Board similarly transferred to IAM the UFA’s certification as

representative of Flight Attendants at Air Micronesia. Continental Airlines, Inc./Air Micronesia,

18 N.M.B. 40 (1990). In 1993, Air Micronesia was acquired by Continental and renamed

Continental Micronesia. IAM currently represents 268 Flight Attendants at Continental

Micronesia. IAM and Continental Micronesia are parties to a collective bargaining agreement

that became amendable on December 31, 2010. McKeen Decl. ¶ 41.

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The work performed by Continental Micronesia’s Flight Attendants (which, similar to

Continental, include First Flight Attendants and International Service Managers) is substantially

similar to the work performed by the craft or class of Flight Attendants at Continental, and the

craft or class of Flight Attendants at United. McKeen Decl. ¶ 42.

II. STATEMENT OF POSITION

A. THE BOARD SHOULD CONCLUDE THAT UNITED, CONTINENTAL AND CMI CONSTITUTE A SINGLE TRANSPORTATION SYSTEM FOR PURPOSES OF COLLECTIVE BARGAINING UNDER THE RAILWAY LABOR ACT

The purpose of the NMB Merger Procedures is to allow the Board to determine whether a

merger of two carriers has resulted in a “single transportation system” for purposes of collective

bargaining under the Railway Labor Act, 45 U.S.C. §§ 151 et seq. (the “RLA”).

The Board applies a two-part test for determining whether two or more carriers constitute

a single transportation system: (1) whether the two carriers are “held out to the public” as a

single transportation system; and (2) whether there is a “substantial integration” of operations,

financial control, and labor and personnel functions. Chautauqua Airlines/Shuttle America, 37

N.M.B. 148, 161, 164 (2010); Delta Air Lines, Inc./Northwest Airlines, Inc., 36 N.M.B. 88

(2009); US Airways/America West, 33 N.M.B. 49 (2006); Allegheny Airlines, 29 N.M.B. 160,

178 (2002).

In determining whether the carriers are “held out to the public” as a single transportation

system, the NMB looks at carrier intent, public perception and other “practical considerations.”

TWA/Ozark Airlines, 14 N.M.B. 218, 236-37 (1987). In determining whether “there is

substantial integration of operations, financial control, and labor and personnel functions,” the

Board evaluates the extent to which the carriers have common or combined functions but does

not require “total integration” of operations. Delta Air Lines, Inc./Northwest Airlines, Inc., 36

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N.M.B. 36, 51 (2009); US Airways/America West, 33 N.M.B. 49 (2006); Allegheny Airlines, 29

N.M.B. 160, 178 (2002).

The NMB conducts its analysis on a “case by case" basis using “broad areas of inquiry."

TWA/Ozark Airlines, 14 N.M.B. 218, 236 (1987); AMR Eagle, 22 N.M.B. 331, 425 (1995). The

factors that the Board evaluates include “(1) published combined schedules or combined routes;

(2) standardized uniforms; (3) common marketing, markings or insignia; (4) integrated essential

operations such as scheduling or dispatching; (5) centralized labor and personnel operations; (6)

combined or common management, corporate officers, and board of directors; (7) combined

workforce; and, (8) common or overlapping ownership.” NMB Representation Manual §

19.501.

In recent cases, the NMB has emphasized that “[t]he Board’s criteria for substantial

integration of operations do not require total integration of operations.” Delta Air Lines,

Inc./Northwest Airlines, Inc., 36 N.M.B. 36, 52 (2009). Rather, the Board’s decisions make clear

that the most significant factors are common ownership, common management and common

control of labor relations. Allegheny Airlines, Inc./Piedmont Airlines, Inc., 31 N.M.B. 528

(2004); American Airlines/Trans World Airlines, 29 N.M.B. 223, 234-35 (2002); Trans World

Airlines/Ozark Airlines, 14 N.M.B. 218, 236 (1987). Thus, where a “merger has been approved

and consummated, the Carriers are operating under a single board of directors and a single

management structure, and substantial steps have been taken toward integrating operations,” the

Board will find that a single carrier exists. Delta/Northwest, 36 N.M.B. at 52; US

Airways/America West, 33 N.M.B. 49 (2006).

1. United and Continental Constitute a Single Transportation System

In the present case, the factors discussed above clearly establish that United and

Continental now constitute a single transportation system.

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The two carriers are commonly owned by a publicly-traded holding company and controlled by a single, shareholder-elected board of directors.

The carriers contractually committed as part of the Merger Agreement to merge into a single airline operating under the United name and Continental logo as quickly as possible.

The carriers have completely integrated management at the officer level, and within months will have integrated management at all levels.

Labor relations are under common control, and the carriers have started joint collective bargaining negotiations where the unions have been willing to do so.

Personnel functions have been consolidated, and the carriers have already implemented, or soon will implement, common personnel policies.

Since the day the merger became effective, the carriers have communicated to the public through every possible media that they are combining into a single airline, and that they would fully integrate operations over the course of a year.

The carriers have integrated routes and schedules through a code-sharing relationship, and will integrate fully upon receipt of a single operating certificate.

The carriers have started to repaint their aircraft under new livery, have issued branded pins to employees with contact with the public and are working on common uniforms for uniformed employees.

The carriers have announced that they will implement common airport signage and consolidate customer service operations as the new United by the Spring of 2011.

In summary, the carriers are now operating as a single transportation system and are well

on their way to becoming a single airline. The facts above compel a finding by the Board that

the carriers should now be treated as a single transportation system for purposes of collective

bargaining under the RLA.

2. The United-Continental Single Transportation System Includes CMI

The United-Continental single transportation system properly includes CMI, based on the

factors discussed above. Continental and CMI operate on a single operating certificate and

Continental manages CMI in its entirety. CMI’s aircraft bear the Continental livery, CMI’s

ground operations use only the Continental name and logo, and CMI’s flights are marketed

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through the Continental reservations offices and website. McKeen Decl. ¶ 4. Accordingly, CMI

is an integrated part of the United-Continental single transportation system.

B. THE BOARD SHOULD CONDUCT AN ELECTION AMONG FLIGHT ATTENDANTS OF UNITED AND CONTINENTAL TO DETERMINE REPRESENTATION RIGHTS

The Board’s Merger Policy provides that “[i]f the NMB determines that a single

transportation system exists, the investigation will proceed to address the representation of the

proper craft or class.” NMB Representation Manual § 19.6. Under these procedures, an

incumbent organization such as AFA can obtain an election among employees in the craft or

class at the combined carrier by demonstrating through evidence that it represents 35 percent of

the combined group. AFA, which represents 13,425 Flight Attendants on active or leave status

and 1,734 flight attendants on voluntary furlough status, at United, meets that showing of interest

requirement and a representation election among Flight Attendants of the combined carrier is

therefore appropriate.

In its single carrier decisions, the Board has consistently taken the position that if the pre-

merger employee groups within the relevant craft or class have a different representation status

and are “comparable” in size, the Board will conduct an election to determine which

representative, if any, the majority of the craft or class desires as its representative. Delta Air

Lines, Inc./Northwest Airlines, Inc., 37 N.M.B. 368 (2010); Pennsylvania/Allegheny Commuter,

19 N.M.B. 362 (1992); Federal Express/Flying Tiger, 16 N.M.B. 433 (1989). While the Board

has never explicitly defined “comparable,” its decisions strongly imply -- and logic dictates --

that an election should be conducted where each group constitutes at least 35 percent of the total

because that is the threshold to establish a showing of interest. Here, the number of Continental

employees who would fall within the craft or class of Flight Attendants is 9,293, and the number

of CMI flight attendants on active or leave status is 268. Thus, there are a total of 24,720 Flight

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Attendants within the combined carriers, and the 9,561 Continental/CMI employees constitute

38.7 percent of the combined group.6 Therefore, the Board’s long-standing policies require that

an election be conducted.

CONCLUSION

For the reasons set forth above, the Board should find that United, Continental and CMI

constitute a single transportation system under the RLA, and should therefore conduct an

election among Flight Attendants employed by the combined carrier.

Dated: February 2, 2011 Los Angeles, CA

/s/ Robert A. Siegel ROBERT A. SIEGEL O’MELVENY & MYERS LLP 400 South Hope Street Los Angeles, CA 90071-2899 (213) 430-6000 e-mail: rsiegel@omm.com CHRIS A. HOLLINGER O’MELVENY & MYERS LLP Two Embarcadero Center, 28th Floor San Francisco, CA 94111-3823 (415) 984-8700 e-mail: chollinger@omm.com Attorneys for United Air Lines, Inc. and Continental Airlines, Inc.

6 Excluding CMI, there are 24,452 Flight Attendants among United and Continental. Therefore even if CMI Flight Attendants were excluded from the total headcount, Continental Flight Attendants still would comprise 38.0 percent of Flight Attendants within the combined carrier.

AMENDED CERTIFICATE OF SERVICE

I hereby certify that a copy of the foregoing Statement of Position by United Airlines and Continental Airlines was served by electronic mail this 2nd day of February, 2011, on the following individuals and organizations:

Edward J. Gilmartin, Esq. General Counsel Association of Flight Attendants - CWA, AFL-CIO 501 Third St., NW Washington, DC 20001 egilmartin@afanet.org Deidre E. Hamilton, Esq. Staff Attorney Association of Flight Attendants - CWA, AFL-CIO 501 Third St., NW Washington, DC 20001 dhamilton@afanet.org Greg Davidowitch UAL MEC President Association of Flight Attendants - CWA, AFL-CIO 6250 North River Road, Suite 4020 Rosemont, IL 60018-4210 mecpresident@unitedafa.org Robert Roach General Vice President International Association of Machinists and Aerospace Workers 9000 Machinists Place Upper Marlboro, MD 20772 rroach@iamaw.org Jay Cronk Transportation Coordinator International Association of Machinists and Aerospace Workers 9000 Machinists Place Upper Marlboro, MD 20772 jcronk@iamaw.org

David Neigus Associate General Counsel International Association of Machinists and Aerospace Workers 9000 Machinists Place Upper Marlboro, MD 20772 dneigus@iamaw.org

/s/ Robert A. Siegel Robert A. Siegel