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.

Mesaba Unions Offer up Concessions Deal

Its no secret that Mesaba Airlines is one sick puppy right now. That'll happen when your biggest stakeholder, Northwest Airlines, decides to goes bankrupt, doesn't pay you , sends a big chunk of your airplanes back to the leasing companies that own them and...oh yeah...opens its own regional airline to compete with you.

Mesaba is now working its own bankruptcy recovery and has asked the court to allow them to terminate existing labor contracts with pilots, flight attendants and mechanics. Initially the courts approved that request but the ruling was quickly overturned. While management at Mesaba regroups a coalition group representing the pilots, flight attendants and mechanics unions has presented their own plan to, in their words, "with an unprecedented joint offer to save their airline, their jobs, and their contracts".

Interesting approach, certainly a refreshing one given some of the antics from other unions. At face value it appears that the "Mesaba Labor Coalition" has done the homework and is taking a balanced approach. It certainly places pressure on Mesaba management to take a careful look at the plan before rebutting it. No doubt the bankruptcy court will be watching closely how Mesaba handles this. Mesaba's previous effort to throw out the union contracts was overturned with a fairly strong rebuff that "...Mesaba had failed to demonstrate that its proposed contract spread the burden of reorganization fairly among all affected parties.". Game on!

US Airways Names New President

US Airways has tapped their executive VP Sales and Marketing, J. Scott Kirby, as their new President. As president he get keep handling pricing, scheduling/planning, marketing, alliances, distribution, reservations and information technologies. He pick ups some new responsibilities like airport customer service, finance and labor relations. Screeeeech....Wha? Labor relations? Kirby, did they tell you that before you took the job? Seriously, is there a happy union at US Airways right now?

I key on that point because Mr. Kirby comes from the America West side of the merger. Pilot negotiations at the new US Airways are rather contentious due to pay differences between the two pilots unions. The America West pilots make more. Good luck to you Mr. Kirby.

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.

Northwest Flight Attendants May Create Their Own CHAOS

A recent update to the Northwest flight attendant union website is once again encouraging its members to rally to behind plans for a CHAOS (Create Havoc Around Our System) strike. The approach should worry any flight attendant at Northwest that wants to keep a job. Union leadership believes a strike will, in their own words, "level the playing field"

"We remain committed to reaching a negotiated agreement with the company regardless of the hurdles along the way," said Mollie Reiley, Interim Master Executive Council President. "However, at this time it appears that the company is more focused on their legal strategy than meaningful discussions. Until the time comes when they are willing to sit down and negotiate a fair contract, it is necessary that we level the playing field and exercising our right to strike does just that."

I disagree. In the industry today the bankrupt airline has a significant advantage negotiating with any union, strike or not. The trail left by US Airways, United and Delta clearly illustrate this. Yes, Northwest has claimed repeatedly that a flight attendants strike could put the airline out of business. That's necessary language to get the bankruptcy court to delay a strike. In the meantime Northwest is (and has been for months) training any office worker that moves to be a flight attendant. Not an ideal situation but it could certainly blunt the effect of a strike. Either way flight attendant jobs are at risk if (a) the airline can survive without them or (b) the airline folds.

OPINION: Northwest Flight Attendants Need Some Spin Control

Note to Association of Flight Attendants representatives at Northwest Airlines, start proofing what you type, watch what you publish, ask your members to be careful what they say in a public forum. I do appreciate the difficult times you face and the pay cuts that are staring you in the face. Not fun...battle on. But the following statement should not have gotten out the door:

"Most of us don't even care about the survival of NWA anymore. How can a company survive under these toxic conditions," flight attendant Kathryn Swarts wrote in a letter to the judge overseeing its bankruptcy.

I think the majority of folks still employed at Northwest Airlines might have an issue with that statement. It comes across as terribly self-serving and isolates you from what should be the common goal...the survival of an airline for the benefit of all who make their living at that airline. Even if that quote is being taken out of context in this article you need to realize that is the risk of saying it in the first place.

NEWS: Judge Tells Delta and Pilots to Get Back At It

Judge Prudence Carter Beatty (awesome judge name) presiding over Delta's banktruptcy has told the airline and its pilots union to go back to the negotiating table. The other option would be hand it over to a mediator but Beatty says "I have never had much luck with mediators.". Delta maintains their ready to negotiating anytime and the pilot's union says "yeah us too" but questions whether the airline folks really understand the term "negotiate". Union chairman, Lee Moak was quoted by the AP as saying, "What she (Beatty) was suggesting is that the other party could learn how to negotiate," he said. "It's hard to negotiate if one party does not move off one position." Delta claims they are just asking for the minimum cuts they need to stay afloat. I think the next sit down with these two groups could end up being pretty brief.

NEWS: Aloha Airlines Completes a Tri-Fecta

Aloha Airlines is having a good week announcing its flight attendants have ratified a new contract and that it has reached an agreement on contract terms with its pilots. Completing the tri-fecta is the announcement that the bankruptcy court has cleared them for exit from bankruptcy as soon as December 15th. That puts their bankruptcy turn-time at less than one year...lightning fast in airline terms.

NEWS: United Airlines Flight Attendants Approve Deal

United Airlines announced today that their flight attendants have approved their tentative contract. The deal includes wage reductions of 9.5% which should come out to around $131 million in annual savings. The approval margin of 56% was far slimmer than the pilots who approved their new deal by a margin of 75%. It makes one wonder if everyone at United really understands the severity of the situation. This contract, like all of the ratified contracts to date, must be approved by the bankruptcy court before going into effect. The court has made it clear that they will not review and approve any of the new union deals until ALL of them are ratified. So we all have to wait to see what comes of the tenuous situation between the mechanic's union, the airline and the bankruptcy court before we can move on to the next chapter of this soap opera. Twenty six months in bankruptcy and still counting...sigh.