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09-18-2007, 08:29 AM
Leaders pressured to take harder line

By Julie Johnsson
Tribune staff reporter
September 16, 2007

United Airlines pilots have put a new face on labor unrest -- it's a giant inflatable rat holding bags of money, the pilots' latest universal description of upper management.

United's unionized pilots last month used the rodent to greet passengers at the Seattle-Tacoma International Airport as they were checking in, the latest in a series of stepped up public attacks on company management as union leaders face key elections Oct. 9.

After six years of relative calm, union activism is escalating across the airline industry. And it's not just management on the hot seat. Rank-and-file employees, seething over losing one-third or more of their pay and management's perceived greed, are striking back at the easiest targets too: the union leaders who agreed to those concessions.

As emotions rise among workers, so does the pressure on union leaders to take a harder line with management, or be replaced by someone who will.

"If Attila the Hun were running he'd be elected," said Michael Boyd, president of the Boyd Group, an Evergreen, Colo.-based consulting firm.

It's a volatile situation that appears to be building into one of the labor paroxysms that seize major airlines each decade. The last spasm, in the late 1990s and 2000, resulted in rich contract concessions that helped speed some carriers, including United, into bankruptcy when the market for air travel collapsed following the Sept. 11, 2001, attacks.

Momentum swung labor's way, some experts say, when Northwest Airlines pilots last month won time-and-a-half overtime pay from a management team known for its unyielding stance on labor issues.

Pilot shortages had forced Northwest to cancel thousands of flights during June and July. Executives blamed the weather, air-system congestion and pilot absenteeism for the disruptions; pilots said inadequate staffing was at fault.

"Every five to seven years the baseball bat changes hands," said Kit Darby, an airline pilot who is president of Atlanta-based AIR Inc., a firm that specializes in pilot recruiting and job placement. "I think we have the official changing of the baseball bat."

Already pilot contract talks are under way at American, Continental and Southwest Airlines and are expected to set the tone for the rest of the industry through the end of the decade.

Negotiations at American, the world's largest carrier, are of particular interest to other airlines and unions because of the ill will that has crept into labor relations since unions voluntarily gave up pay in 2003 to keep the carrier out of bankruptcy.

American's pilots say they are in no mood to be conciliatory. They are angered by incentive plans that have granted rich payouts to senior executives but not to other employees.

In fact, talks ground to a halt this summer after pilots voted out union chief Ralph Hunter, who presided over the 2003 talks. Lloyd Hill, who replaced Hunter, has vowed to take a more aggressive stance. Negotiations are set to resume Oct. 2.

"Across the industry, pilots are done giving up [pay] and we're ready to recoup some of the losses," said David Aldrich, a Miami-based pilot for American and a spokesman for the Allied Pilots Association, the independent union representing the carrier's 8,325 pilots. "Management's had time to fix the store since 2001. It's time to stop giving away our services."

Airline executives counter that any large-scale giveback to employees would threaten their financial recovery, especially with oil prices reaching record highs.

"We're in a difficult position in that regard at the moment," said Mark Burdette, vice president for employee relations at American Airlines. "We're having to find ways of basically educating employees on the fact that there's been a fundamental restructuring of the industry. The folks who've gone through bankruptcy have undercut us on unit labor costs."

AirlineForecasts LLC, a Virginia-based market research firm, estimates that a 10 percent increase in labor expenses would cost American about $700 million per year and United about $400 million per year, potentially wiping out much of the profits the carriers would otherwise earn.

"Emotions are high, expectations are high," Darby said. "The worst situation is if you have very high [worker] expectations and the company's bottom line doesn't support it."

There is no imminent threat of a strike at American or other carriers. After all, federal law limits pilots and other unionized airline workers from job actions until talks wind their way through the National Mediation Board. Even then, the president or Congress could intervene, as President Bill Clinton did in 1997 to block a strike by pilots at American.

Even so, pilots, literally and figuratively, have their hands on the throttle at major airlines and can disrupt operations just by sticking to the letter of their contract, analysts say. More than any other employee group, they determine whether flight schedules flow smoothly. They cannot be outsourced or easily replaced with new hires. And with staffing leaner than it has ever been, carriers depend on pilots to volunteer for extra duty.

Just how testy labor relations get at United will depend in large part on who its pilots choose to replace Mark Bathurst, a United director who is stepping down as chairman of the United chapter of the Air Line Pilots Association when his term expires next month.

It's not certain who is in the running to replace Bathurst, since campaigning is generally done in pilots lounges, over dinner or via phone. Only leaders from the airline's eight major domiciles, or home bases, are eligible to vote. And even they may not know who's in the running until nominating speeches begin after lunch on Oct. 9.

Insiders think there's a good chance United's pilots will turn to a more activist leader, like their peers at American Airlines.

If ALPA falters it could hand critical momentum to a dissident group, known as the United Pilots Association, that seeks to displace it as the group representing pilots at the nation's second-largest carrier. So far the upstarts have collected ballots from about 1,500 pilots, far short of the 3,700 ballots they need to be certified by labor officials to hold a run-off election to challenge the incumbent union.

"Is ALPA starting to listen at United Airlines? Yes, I think they are," said Karl Richcreek, an Airbus A320 captain who is president of the United Pilots Association. "The discontent among pilots is huge."

Adding to the pressure for United Chief Executive Glenn Tilton to defuse the labor issue is that for the first time in United's history all of the company's union contracts will be open for renegotiation at the same time in 2010.

"What's important for all of our stakeholders is to have a sustainable company that can compete in a challenging and unpredictable environment, such as one that has fuel at $80 a barrel," said United spokeswoman Jean Medina. "We are focused on making the right decisions for United and all of our constituents. We meet with our employees regularly and will continue to discuss issues that are mutually beneficial."


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