News Column

Labor Issues at Major Airlines: Flying the Grumpy Skies

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As airline passengers fly to and from vacations this summer, they might be surprised to know their pilot may not have had a substantial pay raise in nearly a decade, and flight attendants might be seething beneath friendly smiles. And mechanics fixing the plane? They might not be too happy either.

Beneath the bustling daily operations of some of America's largest airlines is an undercurrent of union labor discontent.

American Airlines' parent company AMR Corp. is in bankruptcy and asking for massive cutbacks from its unions. United Airlines has yet to reach joint labor deals with any of its major labor groups following its megamerger with Continental Airlines two years ago. United pilots regularly stage sign-toting protests about not having a new contract.

Even ground workers at Southwest Airlines, which is known for its excellent service, operations and relatively harmonious labor relations, handed out informational leaflets to passengers at Chicago Midway Airport last month. They object to Southwest's plan to outsource some of their jobs to temporary workers.

In the airline industry, ongoing union issues aren't unusual. But so far this summer, a number of contracts at large airlines have reached especially critical stages and have had major developments in recent weeks.

The good news is that conflict between airline management and unions typically doesn't mean bad things for fliers - until it does.

Short of all-out labor strikes, which nowadays are rare among major carriers, disgruntled union members can cause other headaches for management, and occasionally for airline passengers. If a pilot or flight attendant suddenly "feels ill" just before takeoff, flights can be delayed or canceled, for example. United pilots were sternly warned by their union in recent weeks against misusing sick leave after the airline noted an "abnormally high" rate of such reports.

Brett Snyder, who writes the Cranky Flier blog, said fliers can suffer collateral damage in company-union battles. "There can certainly be an impact on passengers when negotiations get ugly," he said, pointing to slowdown actions by United pilots years ago that led to delays and cancellations and more recent, similar actions by US Airways pilots.

Customer service could suffer. "As you can imagine, when your employees are happy or at the very least respected, everybody's happy. We've been miserable for nine years," said Leslie Mayo, spokeswoman for the Association of Professional Flight Attendants, representing American Airlines flight attendants. "We continue to work as hard as we can to compensate for the lack of support we receive to do our job, but it is getting more and more difficult."

Meanwhile, airline executives are trying to keep a rein on labor costs so they can halt their money-losing ways and break the cycle of recurring bankruptcies.

"I really sense that labor is struggling with the fact that the industry is still in transition and there are still some difficult, emotional issues that need to be negotiated," said Bill Swelbar, an airline industry researcher at the Massachusetts Institute of Technology. "You look at the pilot negotiations at United - a lot of emotion. Clearly, at American, there's nothing but emotion ... but airline employees are a resilient lot."

Swelbar said the current round of negotiations across the industry is especially difficult because the restructuring that began with many airlines' bankruptcies in the last decade is still unfinished.

Because of the numerous conflicts among airlines and unions - and the emotion - this might be the summer that the flying public will "fly the grumpy skies."

That's not to say flying will be unsafe or employees won't do their jobs. Even the angriest unions don't suggest they would compromise safety. And while airlines have annoyed customers with fees for everything from checked baggage to boxed lunches, they have been more on time and better handlers of luggage than in a long time, according to federal statistics.

"The professionals who work for our members put the safe transport of customers first, as evidenced by the metrics that matter most to customers - record on-time performance and baggage delivery - that has improved consistently for the past eight months," said Jean Medina, spokeswoman for industry trade group Airlines for America. "There is no reason to expect customers will be affected by contract negotiations."

But this summer, many airline employees will attempt to maintain their professionalism against a backdrop of strained and uncertain contract negotiations.

A notable exception among the majors is Delta Air Lines, which has only one major union, for pilots. Delta struck what experts call an industry-leading deal with pilots June 29 after a scant two months of negotiations.

Delta's deal ratchets up the urgency for other airlines to strike similar accords, said Henry Harteveldt, a travel industry analyst with Atmosphere Research Group. "That puts a lot of pressure on the other airlines," said Harteveldt, who characterized the Delta deal as favorable for both sides. "The unions are going to look at Delta now and say, 'That's pretty good. How are you going to get us parity to that?' "

Here, briefly, is where three major airlines stand with labor groups.

UNITED CONTINENTAL HOLDINGS: Following the merger of United and Continental, CEO Jeff Smisek said he wanted contract negotiations completed by the end of 2011. More than half a year after that deadline, the merged airline still has no joint contracts with its major employee unions. With no joint contracts, it can't mix its onboard personnel, namely pilots and flight attendants, or even schedule a United pilot to fly a plane formerly owned by Continental, for example. Until it completes those contracts and gains efficiencies from mixing crews and aircraft, it won't achieve the $1 billion to $1.2 billion in merger savings it cited when the merger was announced.

US Airways, seven years after its merger with America West Airlines, still hasn't combined pilot and flight attendant crews. "US Airways is the poster child for a merger that has not realized all the efficiencies it could," Harteveldt said.

To be fair, United had to wait for some groups to determine what union would represent them, and the airline has reached interim deals with subsets of employees. For example, it reached separate deals for former Continental flight attendants and former United attendants as a prelude to reaching a joint agreement with both.

United and Continental pilots are represented by the Air Line Pilots Association International and are the most aggressive of the employee groups. Longtime United pilots, in particular, are frustrated at the slow pace of negotiations, eager to get out of their post-9/11 bankruptcy-era contract that slashed average pay by about 40 percent.

In mostly silent, sign-carrying pickets, they have shown up by the dozens to some United public events, such as the corporate annual meeting in New York and a media tour of its new network operations center in Chicago's Willis Tower. Last week, the union announced that its members had voted to authorize a strike.

"I am well aware that the negotiations to reach a joint collective bargaining agreement have been long and frustrating," wrote Fred Abbott, United senior vice president for flight operations in a letter to pilots July 2. "The union will continue to claim that the company is dragging its feet in reaching an agreement. This is simply not true. It is in all of our interests to reach agreement now."

Groups at United seeking joint contracts with the airline include flight attendants, mechanics, passenger service agents, ramp and fleet workers, and dispatchers.

AMERICAN AIRLINES: In 2003, American's flight attendants, pilots and ground workers agreed to pay and benefit cuts, along with changed work rules, to help AMR Corp., the parent of American Airlines, avoid a bankruptcy filing. But the airline company eventually succumbed, filing in November.

American originally said it needed $1.25 billion in annual savings by cutting some 13,000 jobs. Since then, it has been working with its unions on contracts that would result in somewhat less severe cuts.

American's unions are all negotiating parallel tracks. In April the unions, representing some 55,000 employees, cut contract deals with US Airways in hopes of an American-US Airways merger. The deals aren't much more lucrative than ones proposed by American Airlines, say officials from the unions and US Airways. The difference, they say, is that working for a healthier merged airline, one able to compete on equal footing with the large flight networks of United and Delta, would provide longer-term job protection.

Their desire for a hookup with US Airways got a boost this month, when American Airlines CEO Tom Horton clearly signaled in a letter to employees that the time was right for airline management to begin considering mergers. He had previously said talk of a merger should wait until after American emerged from bankruptcy.

Unions are also negotiating another track, talking directly with American Airlines through the Chapter 11 bankruptcy process. They want to strike deals before the court potentially voids contracts and allows the company to impose new terms, which is a loss of control union officials fear. In recent weeks, the airline has been able to reach deals with several unions, including pilots who will start voting Wednesday on a tentative contract, and the last two of seven work groups represented by the Transport Workers Union. TWU, the union slated to take the brunt of the job losses, includes such workers as mechanics, ground workers, dispatchers and flight-school instructors.

"These are still concessionary and painful deals, but we continue to fight in real ways to lessen the impact of these changes on our members and their families," TWU International President James C. Little said in a recent statement.

But flight attendants have not reached a deal with the company.

"I believe our recent tentative agreement with the (pilot union), and agreements with the TWU, will prove to be an important turning point in our mission to put American back in the lead," Horton wrote to employees in a letter.

Waiting on a ratification vote by pilots, a judge is scheduled to decide Aug. 15 on whether to void existing contracts for all groups: pilots, flight attendants, mechanics and ground workers.

SOUTHWEST AIRLINES: Southwest Airlines merged with AirTran Airways in May 2011.

Pilots at Southwest and AirTran easily integrated seniority lists in November, usually a long and difficult process. A pilot's position on a company's seniority list can determine career aspects such as earnings, days worked and in which city a pilot is based. In announcing the integration, Southwest Airlines Pilots' Association President Capt. Steve Chase called the ease and speed of the deal "remarkable and rare in our industry."

Indeed, Southwest generally has good relations with labor groups. Flight attendants, too, ratified an integrated seniority list this year.

But last month, Transport Workers Union Local 555, which represents 8,400 ramp, operations, provisioning and freight agents nationwide at Southwest, distributed leaflets to passengers at Chicago's Midway Airport asking for support in opposing what it says is Southwest's plan to outsource jobs and use temporary workers. Contract negotiations have been ongoing since July 2011.

"As has historically been the case, relations are good with Southwest," said Jamie Horwitz, spokesman for TWU, which represents flight attendants and ground workers at Southwest. But there are issues with integrating AirTran with Southwest and Southwest's expansion to flying internationally.

More problematic, he said, is that the airline would like to use outsourced workers to do some of the ground worker jobs, such as baggage handling.

Southwest spokesman Paul Flaningan said talks with ground workers are "very fluid" and it would be premature to comment. "Talks are ongoing and we are still in the process of exchanging proposals with TWU 555."

Harteveldt, the airline industry analyst, said that although major airlines have significant union issues right now, he doesn't expect widespread problems for fliers.

"American Airlines is proving right now that despite the issues between management and labor, its employees have stepped up to the plate," Harteveldt said pointing to American's decent on-time performance and other operational factors that affect fliers.

"Smart employees realize that if they take action against a customer, the customer is going to be inconvenienced, but the airline and their jobs suffer," Harteveldt said.

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