Airline Unions

slowpoke · Joined: Jan 25, 2003 Posts: 2 Location: USA

This is my first post on this site, so I would like to ask your indulgence...
The days of regulation were the result of a process by which the government, via the Civil Aeronautics Board, set the process of providing services to the cities and towns of our nation by granting, "Certificates of Convenience" to carriers engaged in air commerce. The CAB required an applicant to declare the manner it would provide for increased convenience of commerce to the location named in the application. The offshoot of the process, was that a route certificate would be granted if it included, as a part of the declaration, the intent to serve a city or town that was unserved or underserved. As arm-twisting goes, it served to put air travel into hundreds of communities. By recognizing that some locations could not be served profitably, by virtue of the small passenger loads, the CAB set a pricing plan into effect that ensured affordable fares at points that deserved service, but were of modest means, while assuring elevated prices at the major cities, thus compensating for the burden incurred at small towns.
This bit of capitalist socialism had the effect of putting hundreds of towns on the airway charts, and over time, the populations gained a preference for flying, and quality airports from which to do it. Now to take the patient off life-support, and let it breathe for itself--deregulation! By now, no one was about to go back to rail travel, the aircraft industry had received the desired post-war shot-in-the-arm, with a dozen companies engaged in airframe production. It was time for the fledgling industry to leave the nest of assured profit. It is said that Alfred Kahn did not properly forsee the creation of the fortress Hub model of competition when he cut the umbilical cord of regulated fares, but form it did as a response to the harsh reality of competition and lower profits, for most carriers, almost overnight. They divided up the country's cities to create a dominant presence so that by being the carrier of choice at that point, they could assure themselves of the ability to charge whatever the market would bear...at that point.
Historically, the main problem with a fort is that an enemy can simply go around it, and that is what Southwest is famous for. It took time for an upstart to confront Delta on its home turf at Hartsfeld, but now we can see the beginning of the undoing of Hub-and-spoke, and the fortress mentality.
Now for a leap: A limited return to regulation IS possible and may be implemented as a win/win situation. The industry has sufficient maturity to know its costs with great accuracy, the maintenance, fuel, food, landing fees, crew expenses, etc. and these costs are known across the fleets of all compositions, Boeing, Airbus, Fokker, McDonnell-Douglas. Using an average of all costs, within a single fleet type, the government could set the price of a ticket on a per-mile-traveled basis. By applying the fleet-type methodology across all fleets, a high-expense (by-type) aircraft would not be allowed to be a burden on the books, while being very cost-effective in the real world of trans-oceanic flight. There would be absolutely no reason for cutthroat pricing, because you would be providing a service at a known cost-to-benefit ratio. Government would not have to create a huge bureaucracy to run things, it could be as simple as posting speed limits on roads; prices on routes. It would behoove all carriers to place its best or highest efficiency aircraft on a route, so as to produce the highest yield. Everyone would be competing with the cost structure and only secondarily with one another. It's a mix of capitalism and socialism but it could work. One concept of competition is that in a footrace, only one competitor will win. In any race resulting in air service being lost to a city or town, we have the aviation version of a derailment, and everyone loses. This is the sort of game where every player can design the rules to suit himself, the quest to bring order out of chaos in the air.

planedoctor · Joined: Oct 08, 2002 Posts: 306

Excellent post slowpoke, very insightful

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737 · Joined: Nov 20, 2002 Posts: 43 Location: USA

I've often struggled with the thought of a semi-regulated airline industry. And, although it seems like a simple solution, it is more complex than just regulating ticket pricing. For example, the unknown has always been the labor costs which on average ranges between 30-40% of an airline's yearly expenditures. And, today we see the adverse effect of airlines trying to cut their costs by slashing their labor costs, ie. concessions, layoffs, etc. In contrast, the consumer has benefited greatly through lower ticket prices which are at a historical low.

Given that, how would all airlines be able to achieve the same level playing field? And, if some airlines have a strong balance sheet while others have a poor one, what role if any should our government have in creating that level playing field? An even more radical thought, if ticket prices were regulated, what about airline employee wages & benefits? Should they be regulated too?

unionist · Joined: Jan 29, 2003 Posts: 9 Location: USA

being involved in union contract negotiations I can tell you that the Airlines love this un-rgulated industry as does the trucking companies. by having a non regulated industry I belive the Airlines have had closed door meetings to see who will and will not go to the destinations that they pick and choose. The upper managment in all of thid industry are working together to put the work force at bay. Yes labor cost is one of the most expensive things the Airlines have to deal with but do not forget the resposnsability the Technicians have. Do not forget that our lives are on the line every day. We are no less important than the pilots the only difference is that they have realized that when you stick together you have power. If the airline industry was regulated the consumer would have not choice but to pay the price. Business men are taking advantage of the de-regulation and low prices. The industry is stuck with what the government has mandated just like the railway labot act but the corperate devils have taken advantage. Look around you. look at the load factors. look at the type of people that are traveling. The public is still going on vacation and corperate America is till doing business as they see fit but they are not paying the price. They are taking advantage of the industry and it's fears.
De-regulation is nothing more than an other way to break the Unions of America.

737 · Joined: Nov 20, 2002 Posts: 43 Location: USA

It is doubtful that you'll see the return of airline regulation any time soon. Congress today is less likely to approve such a move as it would only exacerbate the current dilemna of the airline industry. And, in the current economic downturn of the airline industry, the only solution left is to let the market determine the survivors. As gloomy as that sounds, it is probably the only way to reduce the number of available seats out there and return this industry into profitability again.

Wages & benefits are only going to improve when the industry returns to a healthier status. And, compensation is based on what the market can bear. The situation at UAL/USAIR is going to have a drastic effect on other airline employees wages should they come out of Chapter 11 stonger and healthier.

ual_tech · Joined: Jan 29, 2003 Posts: 22 Location: USA

I have just spent a few hours reading, and digesting the previous posts on this thread.
All I can say is 'WOW'!!!
There is intelligent life on this planet.

I conceptually agree with the statement by PlaneDoctor:

"I feel any organization can achieve this given the right people to do the job. I think it's not always the right choice to change unions just because one isn't function correctly. I think that if the membership truly had a problem with the unions management they( the members) would force the union to make changes, and they union would comply with it's members requests."

However, trying to implement change from within (in 'My World') has not been successful. The greatest fatalistic maneuvers by our representation that was executed against the IAM ESOP employees (US!!!) was the 'national' decision to invoke a 'Golden Vote'

and put their own lackey on the UAL BOD without input and/or consideration of the UAL IAM represented membership. We are in a situation wherein we are not being asked for input, not being provided information, and being ignored by the company and our onion elected representatives.

How can 'WE' change from within when 'WE' are ignored?

Thanks for letting me post this information/view point.
Please continue this intelligent dialog. I will send the URL of this thread to my friends/co-workers.

Take Care,

UAL_TECH

planedoctor · Joined: Oct 08, 2002 Posts: 306

It is said " Great Leaders are the ones that take the BIG risks in life".

Would UAL switching to AMFA make a it a better place to work?

Is it worth it to attempt such a blind leap of faith?

It's my opinion AMFA hasn't proved themselves as true leaders. They are the infant organization amongst old giants like the IAM and IBT.

It goes with out saying that most will look for "the fresh face" to lead a group into uncharted territory. Who' s to say AMFA isn't that fresh face in our crowd.

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planedoctor · Joined: Oct 08, 2002 Posts: 306

I wanted to reiterate on this statement

ual_tech · Joined: Jan 29, 2003 Posts: 22 Location: USA

From ‘My World Point of View” – UAL_TECH

* The ESOP buyout was a stopgap measure for stopping ‘The Wolf’ from selling off UAL piecemeal (Sacrifice pay, and work rules for jobs). ‘The Wolf’ tried to buy UAL with the Coniston Partners but failed. His second attempt included ALPA, and failed again.
(causing the market crash in 1989)

Being frustrated, ‘The Wolf’ put UAL assets up for sale. He began with the selling the flight kitchens to Hobbs International, had buyers lined up for selling off of the Engine Overhaul Shop in SFO, and was looking for other opportunities to part out the company for cash to increase ‘Shareholder Value’. Then came the winning ESOP transaction.
ALPA, UAL Management, and the IAM put the ‘deal’ together.

* Under this ‘deal’, ‘The Wolf’ was to be replaced by Greenwald, each group was promised a seat on the board, and an industry leading seamless contract at the end of the ESOP period, (Do not remember how many Million$ that ‘The Wolf’ received for his part.) In exchange, ESOP participants gave immediate pay reductions, and work rules to pay off the ESOP loan (average of 15-18% ???).

* IAM members were split on the ESOP buy in, and one of the circumstances that led to the IAM ratification was the workers of the flight kitchens. The flight kitchen workers were promised a 44 week severance package under the ESOP buyout plan, which was limited to 8 weeks at the time (someone correct me if I am wrong).
What would you do?

* FadeIn – FadeOut : ESOP is voted in by ALPA, UAL Management (like they had a choice

), and the IAM. Kitchens are sold, and ‘The Wolf’ is out.

* IAM Membership immediately requested to begin the process of selecting their ‘Board Representative’. The IAM National divulges their ‘Golden Vote’ right, makes their ‘own’ selection (Peterpaul)

without the input of the membership. Membership is not happy with this ‘hidden’ caveat in the ESOP agreement.

Thus begins the feeling of being used, lied to, and misled by the union.

* ESOP PERIOD: 1994-1999 Although initially pessimistic, UAL employees live with the decision. Many advancements in employee involvement, and quality of life issues were made. All in all, it was a pretty good place to be (except for the salary issue).

* End of ESOP: Before the exit of Greenwald, Greenwald recommends that Edwardson be his replacement. ALPA, and the IAM had issues with Edwardson (mainly due to his resistance to mid-term wage agreements), and the BOD agrees on Goodwin. (Edwardson moves on with quite an impressive record after leaving UAL).

* Contract negations begin with ALPA and the IAM. Both ALPA, and IAM are looking forward to a ‘Seamless Contract, and Industry leading wages’ as was promised under the ESOP.

* May 2000: UAL Management, and salaried employees received profit sharing, and wage increases of 15-35% under ‘Vision 2000’.

* As Goodwin is focused on the USAir merger, he ignores/defers the ALPA and IAM negotiations. (So much for the ‘Seamless Contract, and Industry leading wages’ promise). This causes friction between employees, and management (yep, it all came back). The more that ALPA/IAM pushed for resolution, the more they were ignored. Being upset for the broken promise/agreement, ALPA began a ‘work to the rule’ program (known by some as ‘the summer of hell’). Putting pressure on the UAL operations caused Goodwin to respond, but being upset (pissed off) at being put off. Caused ALPA to press for more than it would have if UAL had fulfilled their commitment as soon as it became amendable. (What I have been told by ALPA people.) Goodwin agrees to ALPA’s demands, gives them all they want, and gets back to the USAir merger and creation of Avolar (still ignores/defers IAM negotiations).

* With some overlap into the ‘Summer of Hell’, the IAM Membership decided that maybe the IAM was not their best representative

, and wanted AMFA to represent them

. Goodwin used this opportunity as an excuse to further ignore/defer IAM negotiations. During this period, in an effort to heighten Goodwin’s attention to a contact resolution, there was an IAM ‘work to the rule’ program also. However, instead of getting Goodwin to restart negations, Goodwin decided to put a court imposed injunction on them instead.

(So much for employee ‘Owner’ relations)

* September 11, 2001 : Osama and his wackoban followers kill themselves, and approx. 3000 other human beings in some kind of a sick, and sadistic world statement. (Save my opinion on this for another post.)

IMHO and personal observations.
:-) UAL_TECH

planedoctor · Joined: Oct 08, 2002 Posts: 306

Excellent post there UAL_Tech

Nice to get some personal observation and enlightenment.
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ual_tech · Joined: Jan 29, 2003 Posts: 22 Location: USA

planedoctor,

Thanks, I think the Emoticons added some color.

(Too bad you don't have one of a goose getting a golden egg choked out of it.)

Although this is a ‘very’ simplified chronology, I hope it gives people an understanding of what has led us to where we are today. I thought of posting this under the ‘United Airlines’ forum but am uncertain of what an
‘appropriate’

title would be.

Great Site!!!

Take Care,

UAL_TECH

acmech1962 · Joined: Mar 09, 2003 Posts: 3 Location: USA

Hello All.

I am a little late getting into the discussion on the subject but felt that its an important one that needs to be discussed.

The problem has been the fact that AMTs in general are the minority in most industrial unions, that combined with the fact that they typically don't participate in the union also adds to the equation. The members feel that even if they do get involved they are ignored and their needs are ignored. This all adds to the fact that AMTs' feel that the other groups pay are subsadized by them receiving less in their wages.

For years industrial union are entrenched in the way that they do business and their goals are the overall wellfare of the complete membership, this usually runs counter to what the AMTs' feel is in thier best intrest.

What all parties need to remember is that above the local level unions are a business, they are their to continue in their best intrest and promote their agenda.

Craft Unions are made up of a specific group of people that are of the same class ands craft and share the same basic skills, this leads to empowerment or at least the feeling of such. In an industrial Union the general feel of the minority is helpless as the higher wage earners are the miniority. In a Craft Union all are somewhat equal.

Which is the best? thats up to each individual to decide, strenght in numbers or unity of the same class and craft.

The bottom line is that Industrial Unions have ignored the AMTs' and their gripes for a extended period of time, the only reason that you started to see some seperation in the locals is the fact the AMFA was and is banging on the door. The latest events in the airlines and unions has only served to disenfranchise the AMTs even more.

Just my opinion what do I know.

woody · Joined: Oct 12, 2005 Posts: 8 Location: USA

Two years later, ALL aviation workers find contracts worthless and Bankruptcy used as a simple way to take already major concessionary contracts and squeeze even more. I think what we now see are companies going after the wages and benefits of retirees and outsourcing to take the jobs into a Wal-Mart model shedding real jobs in favor of subcontractors that can cut corners with impunity. The quandary is in countries like France and Great Britain you have strong unions that protect workers rights and here we are voting pro big business and whining about the union and probably the laughing stock at the elite country clubs of executives who make King Midas envious.
Benjamin Franklin, who says, “We must all hang together, else we shall all hang separately.” In the current NWA story, the IAM said they would help bust the AMFA AMT’s and now that the company has done that, they are making unreasonable demands on the IAM workers if you read the business news this weekend. I wish that all those who are always saying, “at least we have a job” would look around at all the unemployed AMT’s and look at how companies are stealing retirement money and benefits earned over many past decades. LOOK at executive compensation compared to what AMT’s have been dealt. Unions are what the members choose to make of them and the AFL-CIO needs to stop trying the same old sorry plans. The AFL-CIO needs to start with a no cross clause in any contract and stop the moronic in fighting that wastes resources and weakens all unions. Look at Europe for examples of strong unions. All aviation workers can say is that slaves had jobs and they must have been very happy about that. We live in a country where we let companies steal earned pensions and other benefits when under the railway labor act this is a major breach of contract but hey, slaves had jobs and maybe we can get table scraps to eat off the masters table.
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woody

AWAPAC · Joined: Nov 12, 2006 Posts: 5 Location: DC - USA

The unions are great for representing you in contract negotiations but if the laws regulating your industry are hostile to labor, the unions are limited on what they can achieve.

The key is to persuade the legislators in D.C. to write labor friendly laws. This empowers the unions and results in a better deal for you.

The Aviation Workers of America Political Action Committee works to change these laws by bringing the workers voice directly to the lawmakers ears.

Visit www.aviationworkersofamerica.org to learn more.

Raymond M. Adams
Director
Aviation Workers of America Political Action Committee
(AWAPAC)
Make your voice heard!

HerkPFE · Joined: Jan 17, 2008 Posts: 10 Location: USA

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