US Airways Showing Their Pilots Tough Love

I've posted that the pilots union at US Airways needs to be careful with the negotiation tactics. The airline has shown some slim profits but overall US Airways is still trying to bring their merger and their recovery to full fruition. In that post I cautioned that any demands for increased pay need to be balanced with some give backs on benefits and work rules.
So it shouldn't be a shock that US Airways just handed the union a laundry list of concessions they would like from their pilots. US Airways CEO, Doug Parker "...has repeatedly said the company cannot afford to increase its overall labor costs,...". The airline will take a tough stand in order to be a viable airline. But the pilots union is plenty mad about it saying US Airways "tossed the most onerous sick-leave policy in the industry across the table." Furthemore, the union is accusing the airline of backing out of a tentative agreement on sick leave and other benefits.
So where's the truth. As with most negotiations its somewhere in the middle. The whole thing is complicated by the fact that US Airways must find a way to unify the two pilot unions...pilot unions with very disparant contracts. Its going to be a long road.

A Peek Into the Dark Side of Mergers

Negotiations between the merged US Airways and its two pilot unions trying to become one gives us a little glimpse at the dark side of mergers. Specifically the difficulties surrounding the effort needed to combine two unions into one big happy family. The new US Airways has been at this for months. The old America West pilots get paid more than the old US Airways pilots. America West pilots don't want to take a pay cut, US Airways pilots want a raise. The airline doesn't want to do anything that will increase costs. Everybody stand in a triangle and smack the person to your right. There, feel better?

There's a flaw I see in the union's position illustrated in this quote from Tania Bziukiewicz, a union spokeswoman and US Airways pilot:

"To force our pilots into a pay cut is ridiculous, especially at a time when we're making money," said Tania Bziukiewicz, a union spokeswoman and US Airways pilot."

"At a time when we are making money"? Bziukiewicz refers, of course, to the $305 million profit that the new US Airways posted last quarter. Good grief, one quarter is like 12 seconds in the life of an airline and $305 million dollars, unfortunately, is not a lot of money for an airline. I've posted about this before but it merits repeating, its too early to ask for raises. If it money you want then you need offer up concessions on work rules and benefits to offset it. I do not believe that there is room for any airline, Southwest included, to let costs increase at this time. The continued recovery of the airline industry requires a tight rein on costs.

American and Southwest Fly Into Union Airspace

Just a quick note to point out that both American Airlines and Southwest Airlines are headed into negotiations with their individual pilots unions. With all the attention being given to the flight attendant situation at Northwest its easy to miss quiet, civil negotiations. American and Southwest enter into these negotiations from different directions.

American Airlines comes at it as an airline struggling to see a profit again and still looking for every way possible to save money. American has already extracted pay cuts from their unions. Look for them to negotiate heavily for more flexible work rules to help them use crews more efficiently. Look for the pilots to shore up benefits and pensions. American and their unions have tended to butt heads in the past but the recent trend has been one of cooperation. That needs to continue.

Southwest approaches these negotiations having weathered a very long storm while continuing to grow and while posting profits. Southwest pilots are going to need to show some restraint here. It has been widely reported that the Southwest's profits have been possible only because of some brilliant fuel hedging decisions. This kept them in the black as fuel prices soared. As time has passed the strength of these fuels hedges have weakened. Fuel costs have retreated but no one expects them to stay there. Asking for large pay increases might not be the best thing for the long term good of their jobs. Southwest pilots, to their credit, have already granted the airline some of the most flexible work rules in the industry. I see this negotiation as tricky, you step back and wonder what more can be done? Both sides needed to keep the frugal Southwest spirit at the forefront.