Airline unions' future grim
04-04-2006, 02:10 AM
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Airline unions' future grim
Airline unions' future grim
Delta, Comair just 2 examples
BY ALEXANDER COOLIDGE | ENQUIRER STAFF WRITER
Terrorist threats. Soaring fuel costs. Record losses. Bankruptcies. Labor strife.
The airline industry has never been for the faint of heart, but many analysts say the past few years are the most turbulent airlines have ever seen. The immense financial bleeding has forced unprecedented cost cutting - with workers first in line.
The union representing Delta Air Lines' pilots today announces whether its members have voted to authorize a strike; a similar vote already has been approved by flight attendants at Comair. The Atlanta-based carrier and its Erlanger-based subsidiary have demanded wage and other concessions from the unions - and they have gone to bankruptcy court to void the unions' contact if they don't agree.
The unionized forces at Cincinnati's dominant carrier are being offered bitter medicine already taken by workers at some of Delta's competitors, said Mike Boyd, an Evergreen, Colo.-based aviation analyst.
"We've never had a situation before where airlines say, 'If you don't agree, you may not have an airline anymore,' " he said. "That's the way it is at Delta and Comair now. It's not give-and-take across the bargaining table, it's the bottom line."
The Air Transport Association, an industry trade group, estimates U.S. airlines collectively will report $10 billion in losses in 2005 - bringing the tide of red ink since 2000 to $42 billion. The industry has slashed 148,000 jobs since the Sept. 11, 2001, terrorist attacks - 27 percent of total jobs, the trade group said.
Aaron Gellman, an economics professor at Northwestern University who studies airlines, said labor groups don't have the bargaining position they once had because their employers no longer enjoy industry dominance. As low-cost airlines grab more market share, older so-called "legacy" carriers such as Delta no longer can afford to just pass along increased labor costs to customers.
"Labor should have learned their lesson long ago - the market is less elastic than it used to be," he said. "There's now such a disparity between carriers like JetBlue and Delta that legacy airlines have no choice but to get closer to a low-cost structure."
By using the bankruptcy process to reject labor contracts, Gellman said, airlines are being "draconian" to get costs down to emerge from bankruptcy.
George Hopkins, a history professor emeritus from Western Illinois University who has studied airline labor, said the past few years have been a low point for unions at major airlines as their power has dwindled to almost nothing.
"They're playing from an extremely weak hand," he said. "The only weapon they may have left is a strike - which is a suicide truck bomb."
Delta is seeking $305 million from its 6,500-member pilots union, while Comair is seeking $8.9 million in annual cuts from the union for its 1,000 flight attendants. Last year, Delta slashed non-union pay by 10 percent and has cut more than 26,000 jobs since 2001.
Boyd said Delta's stance with its unions mimics what competitor Northwest Airlines is doing - and what American and United airlines already have done. He said even as airlines recover, wages are unlikely to return to their heyday. Pilots at Minneapolis-based Northwest are scheduled to begin voting this week on a proposed contract that would cut their pay $358 million.
Cutbacks at Northwest has forced one contractor, bankrupt regional airline Mesaba Airlines, to win court approval to impose on its employees a 19.4 percent across-the-board pay cut as workers threaten to strike.
Last week, Elk Grove, Ill.-based United said it plans to hire about 4,000 new workers this year, including some 2,000 flight attendants on domestic flights. The airline emerged from Chapter 11 this year after slashing about 25,000 jobs. It has narrowed annual losses to $219 million last year, down from $854 million in 2004.
"Their pay won't be what it used to be," said Boyd.
Delta, Comair just 2 examples
BY ALEXANDER COOLIDGE | ENQUIRER STAFF WRITER
Terrorist threats. Soaring fuel costs. Record losses. Bankruptcies. Labor strife.
The airline industry has never been for the faint of heart, but many analysts say the past few years are the most turbulent airlines have ever seen. The immense financial bleeding has forced unprecedented cost cutting - with workers first in line.
The union representing Delta Air Lines' pilots today announces whether its members have voted to authorize a strike; a similar vote already has been approved by flight attendants at Comair. The Atlanta-based carrier and its Erlanger-based subsidiary have demanded wage and other concessions from the unions - and they have gone to bankruptcy court to void the unions' contact if they don't agree.
The unionized forces at Cincinnati's dominant carrier are being offered bitter medicine already taken by workers at some of Delta's competitors, said Mike Boyd, an Evergreen, Colo.-based aviation analyst.
"We've never had a situation before where airlines say, 'If you don't agree, you may not have an airline anymore,' " he said. "That's the way it is at Delta and Comair now. It's not give-and-take across the bargaining table, it's the bottom line."
The Air Transport Association, an industry trade group, estimates U.S. airlines collectively will report $10 billion in losses in 2005 - bringing the tide of red ink since 2000 to $42 billion. The industry has slashed 148,000 jobs since the Sept. 11, 2001, terrorist attacks - 27 percent of total jobs, the trade group said.
Aaron Gellman, an economics professor at Northwestern University who studies airlines, said labor groups don't have the bargaining position they once had because their employers no longer enjoy industry dominance. As low-cost airlines grab more market share, older so-called "legacy" carriers such as Delta no longer can afford to just pass along increased labor costs to customers.
"Labor should have learned their lesson long ago - the market is less elastic than it used to be," he said. "There's now such a disparity between carriers like JetBlue and Delta that legacy airlines have no choice but to get closer to a low-cost structure."
By using the bankruptcy process to reject labor contracts, Gellman said, airlines are being "draconian" to get costs down to emerge from bankruptcy.
George Hopkins, a history professor emeritus from Western Illinois University who has studied airline labor, said the past few years have been a low point for unions at major airlines as their power has dwindled to almost nothing.
"They're playing from an extremely weak hand," he said. "The only weapon they may have left is a strike - which is a suicide truck bomb."
Delta is seeking $305 million from its 6,500-member pilots union, while Comair is seeking $8.9 million in annual cuts from the union for its 1,000 flight attendants. Last year, Delta slashed non-union pay by 10 percent and has cut more than 26,000 jobs since 2001.
Boyd said Delta's stance with its unions mimics what competitor Northwest Airlines is doing - and what American and United airlines already have done. He said even as airlines recover, wages are unlikely to return to their heyday. Pilots at Minneapolis-based Northwest are scheduled to begin voting this week on a proposed contract that would cut their pay $358 million.
Cutbacks at Northwest has forced one contractor, bankrupt regional airline Mesaba Airlines, to win court approval to impose on its employees a 19.4 percent across-the-board pay cut as workers threaten to strike.
Last week, Elk Grove, Ill.-based United said it plans to hire about 4,000 new workers this year, including some 2,000 flight attendants on domestic flights. The airline emerged from Chapter 11 this year after slashing about 25,000 jobs. It has narrowed annual losses to $219 million last year, down from $854 million in 2004.
"Their pay won't be what it used to be," said Boyd.
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