Commentary
Is It ĎAll Laborís Faultí?

By F/O John Morgado (Delta)
Air Line Pilot, March 2003, p. 5

As times change, they seem to stay the same. Despite AMR CEO Don Cartyís statement a few months ago that airline managementís biggest mistake is claiming that "itís all laborís fault," airline managements are once again blaming labor and looking to their employees to bail them out of the hard times that are very much managementís making. Any of us who have been around the U.S. airline industry for a few years have seen this ploy before. However, two things make our current situation different from what we have seen in the past. The first is the severity of the industryís problems, and the second is managementís long-term strategy to attack labor.

US Airways is in Chapter 11 bankruptcy. United, the nationís second largest airline, is now in bankruptcy after the denial of its federal loan guarantee. The Air Transportation Stabilization Board, the agency in charge of considering this assistance, said that United did not have a strong business plan and questioned Unitedís ability to pay back the loan. This message that United management has not developed a strong business strategy to return to healthy financial status was not widely spread in the news media. The news media are also ignoring the fact that United management was intent on a merger with US Airways for years and spent millions on a plan that never came to fruition.

However, a definite message is going out to the public. The message in the news media, a message fed to them by airline management, is the same old story: "Itís all laborís fault." The news media report managementís mantra that Unitedís problems are the result of "being saddled with excessive labor con-tracts." One Denver-area news-paper editorial even implied that Unitedís bankruptcy was a result of the "mechanicsí overwhelming reject[ion] of a $700 million cost-cutting agreement." The agreement failed by a 57 to 43 percent margin. This is hardly "overwhelming." Furthermore, a spokesman for the ATSB stated that the decision to deny Unitedís loan guarantee was made before the result of the mechanicsí vote was announced and that the guarantee would have been denied even if the cost-cutting agreement had passed.

These facts fly in the face of the airline management party line that "itís all laborís fault," so they were overlooked.

Airline managements are making clear that the U.S. airline industry is in a potential total meltdown. The industry is truly in a dire situation. Other airlines could soon follow United into bankruptcy if the industryís problems are not addressed.

These problems include

ē inherent inefficiencies in airplane and crew utilization with the hub-and-spoke system;

ē overcapacity in the industry, once again a problem;

ē mixed aircraft fleets and the infra-structure that these fleets require;

ē the fact that business travelers are no longer willing to pay an exorbitant premium for their ticketsóairline policy changes have forced these formerly high-yield passengers to shop on the Internet and name their own price, a price much lower than airlines would like them to pay; and

ē excessive taxation, which cuts deeply into every airlineís ability to be profitableó44 percent of a $100 ticket goes to the government in the form of taxes, surcharges, and fees.

Overcapacity, the new conduct of business travelers, and excessive taxation are, by far, the biggest problems facing the U.S. airline industry. While airline managements have made attempts to address some of these problems, they have made it clear that, from their point of view, the biggest problem is labor. They are making that point clear to the public and the politicians. This connects two pieces of the puzzle as far as airline management is concerned. The first piece is, "The industry is in turmoil; itís all laborís fault." The last piece is that something must be done about it.

Airline managementís current attack on labor is laying the foundation for a system that will cripple all airline labor groups. If management succeeds in convincing the public that labor must be dealt with, then the politicians will not be too far behind. Politicians want to be seen as dealing with problems, even if it means just "doing something." That "something" is the "baseball-style arbitration" bill in the Senate. This bill effectively guts the Railway Labor Act and removes any leverage a labor group has in contract negotiations. This is the final piece of the puzzle and the goal of airline management. This bill is the reason that the stakes now are higher than ever. This time managementís lament is not about achieving some temporary concessions. Itís about permanently devastating our careers and that of all airline employees. We all know that this bill must be stopped. The way to stop it is to break managementís chain of events.

Labor, especially pilots, have far more at stake in their airline than any management team. We are not the problem, nor should any solution be on our backs. We must communicate this fact loud and clear, both on a national and local level. Airline management needs to stop pointing fingers at labor and start doing some managing and leading. Management must make some hard choices on how to make our hub-and-spoke system more efficient. Management must discover how to repair a broken business model that assumes business travelers will pay three times more than leisure travelers. Management needs to stop expending money and effort in attempting to gut the Railway Labor Act and instead should maximize its resources to lead the charge to lower the level of taxation on our industry. Taking away the rights of labor is not a solution. Labor, the men and women who work in the cockpits, cabins, ramps, and gates, make our industry great and keep it running safely every day. Labor is not the problem. Labor has been, and always will be, part of the solution.

This article is adapted with permission from Delta Council 47ís The Roundup, January.