Airline Unions Won’t be Fooled a Second Time

By Robert Mark on April 18th, 2008

The withdrawal of US Airways from the Air Line Pilots Association yesterday should be recognized as more than simply a disgruntled group of aviators in search of someone to plead their case about integrating an airline seniority list. The militant move by enough US Airways pilots to pull out of a union alliance like ALPA represents a shot across the bow to airline management. And no pun is intended here, especially since the US Airways pilot whose gun discharged a few weeks ago was reportedly fired from that carrier for the incident.

Pilots at United are just as ready for action over a possible merger with Continental or anyone else. ALPA members there said they’ll “fight, on every possible front, any attempt to merge our airlines at the expense of the pilots.” In general, negotiations with American and it’s pilots are also not going well. Northwest pilots are not ready to surrender their stake in that airline easily either.

A few weeks back, a story appeared in the Wall Street Journal article about the reduced bargaining power of unions now that the price of fuel seems headed for the stratosphere. The piece made mention of the airline industry as an example of where things are not simply sticky now, but will become even more so over the next year. The story says airline unions should be prepared for the worst.

I’d say everyone needs to be prepared for a fight because labor is coming back and their hands are out.ASTAR

This may not be a time when a union is ready to chew off its own foot to send a message to management as the pilots of Eastern Airlines did to Frank Lorenzo in the early 90s, but the story about airline labor this year is not going to be a pretty picture for employees, passengers or shareholders.

All this labor strife couldn’t come at a worse time for the airlines, but I think that’s also the union’s strongest bargaining chip.

The pilot’s unions now have the ability to simply cross their arms and say “No, not this time,” to a proposal that doesn’t offer them a seriously considerable stake in any of the new ventures sure to be formed before the next president sits down to his or her desk in the White House next January.

For consumers though, the rest of this year is probably not going to be pretty, especially during this summer’s travel season. Don’t be surprised if there is at least one major airline strike designed to fire one more shot where management can’t miss the message.

And also watch for a few more airline brands to disappear.


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4 Responses to “Airline Unions Won’t be Fooled a Second Time”

  1. Bill Says:

    Correction. Oil and fuel prices are already in the stratosphere. They appear to be headed towards the ionosphere! The folks responsible for setting oil and fuel prices just don’t care about the hardship, unemployment, recession, that it causes. They’re making tons of money – which makes it all OK in their books. (ya don’t see Dick Cheney complaining about high oil prices either).

    History has proven, over and over, that airline mergers are expensive, messy, and offer no guarantee of a more lean, mean, entity with all the supposed “synergies.” That’s the sales pitch. Look under the covers and you see who’s cashing in on the deal for some real motivation. Upper management (e.g., D.Steenland gets 11+ million just for hanging around until the merger completes – and he already said he wasn’t leaving beforehand anyway), and hedge fund managers who initially pushed the NWA/DAL merger – as if they give a rat’s ass (which is pretty small) about the company or anyone that works for them.
    Through all of this, the folks that keep the companies running: labor and the lower levels of management (which are really labor too, but don’t know it), were here before these guys came on board, and will be around long after these guys cash out.

    The cost of flying on a plane has got to go up, because the cost of flying a plane has already gone up – a lot. Labor was forced to make up a lot of the difference in the last round of bankruptcies. That cannot continue.

  2. Rob Mark Says:

    Good comment Bill.

    As a consumer, I hate the idea of higher airfares. What can I say, like everyone else, I’ve gotten used to the deals that started appearing years ago after deregulation.

    But I’d also like to be able to fly period. Unless airlines begin pricing their services for more than it costs them to produce, this great big airline industry we seem to covet here in the states is going to come undone on its own anyway.

    That’s why many carriers have been stashing away so much cash. With that, they can hold out longer than their underfunded rivals and be around to pick up the pieces.

    Somehow, we’ve come to think that an airline slipping into bankruptcy is un-American. Probably time we caught up with reality. That’s just plain silly.


  3. Bill Says:

    Rob, That “last man standing” theory was what they tried when oil shot through $50 a barrell. But no airlines (of any substance) went away – that the theory counted on. What was left was a bloodbath with everyone still standing and the survival of the companies forced out of labor by means of huge pay and work rule cuts in bankruptcy court.
    Labor had been saying “if costs are going up, prices have to go up too,” but somehow “pricing 101” seemed to escape the minds of the “talent” that companies pay millions each year to come up with this stuff.
    That stragety was a huge management failure, yet if you look at the executive bonuses that were awarded for dragging companies into (and out of) bankruptcy, you’d think it was a brilliant success.
    Labor is finally waiving the “bullsh*t” flag, and now we are finally seeing prices start to increase to absorb some of the robbery going on by the oil industry (after all, there was no way to make people pay to come to work!)

  4. Rob Mark Says:

    I hope labor has the courage to hold the line this time. It’s probably the most leverage in the airline business they’ll be seeing for some time to come.

    But at least the airline folks CAN do something. I think they may have forgotten how bad things could be, like what the controllers face by having their collective bargaining hands tied behind their backs hoping the Congress will save them.


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