Fee for Departure, Again

By Captain Duane Woerth, ALPA President
Air Line Pilot, February 2004, p.5

In the 1920s, ALPA’s founding fathers were extremely familiar with the hazards of the "fee for departure" process. Of course, it was not called "fee for departure" then, nor was the now-familiar ACMI—Aircraft Crew Maintenance and Insurance—a phrase on every pilot’s lips.

Nonetheless, 100 percent of the Air Mail pilots worked for fee-for-departure (or ACMI) air carriers on an outsource basis. Early airlines were really just pilot supply houses for the U.S. Post Office Department, which paid air carriers a fee to provide an airplane and a pilot to fly the mail. How much mail was on each flight (load factor) and the price of stamps (yield) were not business concerns of the air carriers. The Post Office bore all of that principal risk, and the air carrier simply had to keep its costs below the fee that the Post Office paid.

The only way to halt the cycle is for every pilot group inside an air transportation brand to develop a common, coordinated strategy to protect wages and share job security.

Not surprisingly then, the air carrier management, once it had what it believed was a "guaranteed" profit margin already built into the fee to cover its pilot costs, immediately began trying to replace its currently employed pilots with pilots willing to work for less. Unfortunately, these efforts usually succeeded, and pilots routinely underbid each other for the work.

Thankfully, ALPA’s first president, Capt. Dave Behncke, and his fellow pilot union organizers clearly understood that this "low bid" process was ruinous to pilot pay and job security, and they put an end to a vicious cycle. They formed our union and cooperated across company lines to rigorously pursue progressive pattern bargaining.

They also got busy in the political process, and their efforts paid off. If Democratic President Roosevelt had not forced through Congress the Air Mail Act of 1935—which basically mandated airlines to employ union pilots (and ALPA was the only pilots union)—ALPA’s success at pattern bargaining might never have materialized. The record is clear that political support for unions and, of course, union support for politicians have always been absolutely critical components of any union’s success.

Fast-forward nearly a century, and we see that the piloting profession in the 21st century has come full circle. Once again, thousands and thousands of pilots are being told daily that they need to lower their already inadequate pay to allow their "fee for departure/ACMI" employer to "bid" for capacity within an airline brand. This new-old cycle is spinning within every airline brand—passenger and cargo alike—and negatively affecting every pilot in every brand, not just at the fee-for-departure/ACMI "competitors."

The result may surprise a lot of pilots: The overwhelming majority of air carrier certificate holders no longer compete in the marketplace by selling transportation directly to the public. Instead, most air carrier certificate holders are now in a fee-for-departure/ACMI contract relationship with a transportation brand that actually sells the tickets and the cargo bills to the public.

The bottom line is that most air certificate holders are back in the same business relationship that the original Air Mail airlines had with the Post Office. Just as airline managements acted nearly 80 years ago, today’s airline managements are orchestrating a pilot (under)bidding war.

When Mesaba pilots are told that they must "compete" with Pinnacle pilots for a larger share of the Northwest codeshare contract, this threatens every pilot in the brand—including the Northwest pilots. The same process is alive at Delta with Comair and Atlantic Southeast. The situation is no different for cargo pilots like those of ASTAR and Airborne Express, who are "competing" for the lowest-cost ACMI agreement with DHL Worldwide.

The only way to halt the cycle is for every pilot group inside an air transportation brand to develop a common, coordinated strategy to protect wages and share job security. Until that happens, the current race to the bottom will continue. In 1931, the Air Mail pilots had the wisdom to stop pointing fingers and began joining hands instead.

That effort, combined with ALPA’s involvement in the political process, including the 2004 campaign for the White House and Congress, offers us our best hope to succeed in these challenging times. In the trade union movement, nothing else works. And in ALPA’s long history, those efforts have been critical to all that we have achieved.

s/Duane E. Woerth