Gavin Francis, Staff Writer
Air Line Pilot, June/July 2004, p.28

The airline industry has changed tremendously within the last few decades, and during that time, ALPA has been right smack in the middle of every significant legislative fight that has affected the livelihood and welfare of its members. Additionally, the Association has championed many important policy advances to ensure a safe and economically viable profession. But as a new generation of aviators takes to the sky, many pilots carry out their cockpit duties unaware of the hard-fought political battles that have taken place to protect their jobs and their safety.

This is not a history we can afford to take for granted, nor should it be allowed to fade into obscurity. ALPA has accomplished much through its political efforts, which have benefited not only its member pilots, but also the traveling public. A familiarity with ALPA’s past political struggles helps explain why the Association’s involvement in politics is so crucial to defending the profession of airline piloting.

"The nature of politics requires that we establish and maintain friends in Congress to protect the interests of our pilots," says Jerry Baker, who retired recently as ALPA Legislative Counsel after nearly three decades of service with the Association. "Developing these relationships is absolutely essential to safeguarding the profession and promoting ALPA’s goals."

Air Line Pilot recently sat down with Baker, along with ALPA’s Director of Government Affairs Paul Hallisay, Senior Government Affairs Specialist Kelly Hardy, and Senior Legislative Representative Brendan Kenny to chat about many of the important policy initiatives that ALPA has lobbied for on behalf of its members. The first part of that story is presented here; the second will appear in the August issue.

The 1970s was a difficult period for ALPA members. Until then, the U.S. government heavily regulated almost every aspect of the airline industry. But the Carter administration proposed legislation that would change that industry forever. The Airline Deregulation Act, which grew out of an idea initiated by the Ford administration, sought to free airlines from many government restrictions they operated under and to allow airlines to compete with one another in the open market.

"At the time, ALPA didn’t really have much of a Government Affairs Department," says Paul Hallisay, who arrived at ALPA in 1977, a year after Baker was hired. "Because the industry had been regulated for so long, the Association hadn’t had much need to have full-time lobbyists on staff."

But deregulation threatened the stability that pilots had enjoyed under government regulation, and the Association stood resolutely against the idea. The Airline Deregulation Act would eliminate the Civil Aeronautics Board, the government agency that oversaw the U.S. airline industry, and would allow airlines to set their own ticket prices. This would create an opportunity for new, nonunionized carriers to enter the industry, giving them a competitive advantage over the already-organized airlines. ALPA’s president, Capt. J.J. O’Donnell, recognized that if ALPA was going to survive in this new environment, it must expand its lobbying operations and devote considerable resources to political action.

Jerry Baker, who had worked at American Airlines for 8 years before coming to work for ALPA, remembers the prederegulation Department.

"Before Capt. O’Donnell, ALPA’s Government Affairs operation was a haphazard enterprise at best," he recalls. "Capt. O’Donnell hired Bob Bonitati, who had been at the White House and on Sen. Howard Baker’s staff, to create a professional Department. And just in time, too, because deregulation was already coming down the track. In fact, the first thing I remember working on when I came here was writing congressional testimony for Capt. O’Donnell against deregulation. Deregulation was the all-consuming legislative focus of the Association for the first couple of years that I was here."

Despite the best efforts of Capt. O’Donnell and his staff, after prolonged consideration on Capitol Hill, the deregulation bill finally emerged as law in October 1978. As feared, deregulation did indeed destabilize the U.S. airline industry, creating an environment in which management could operate with impunity. Men like Frank Lorenzo ransacked the airline industry, orchestrating hostile takeovers of airlines by using leveraged buyouts and then mismanaging those same companies into bankruptcy.

Capt. O’Donnell came away from this experience with a renewed commitment to political action and resolved to maintain an adequately funded, professionally staffed, full-time Government Affairs Department. Capt. O’Donnell was determined that ALPA pilots should never again suffer such a defeat at the hands of its political adversaries.

Although ALPA lost the fight against airline deregulation, the union came away with several important protections for its pilots, one of which was the defeat of the airlines’ Mutual Aid Pact. Under the Pact, airlines supported each other financially during a strike. This was a way for the airlines to maintain low wages for their employees industrywide by ensuring that any one carrier could endure a strike. The Pact had existed for more than 20 years, but an ALPA-sponsored amendment to the Airline Deregulation Act made the Pact’s continuation impractical.

"Doing away with the Mutual Aid Pact was a huge victory for ALPA," says Baker. "We didn’t try to get it repealed outright, like we had in prior unsuccessful bills. Those efforts had not gotten us anywhere. But our amendment imposed restrictions on the Pact that essentially eliminated its value to the airlines."

ALPA also lobbied successfully during deregulation for a presidential emergency board (PEB) to look into a labor dispute between Wien Air Alaska and its pilots. The pilot group had been on strike since May 1977 over several issues, including crew complement and out-of-seniority flying, and the two sides were at a deadlock.

The dispute was an early example of the consequences deregulation would have on the industry. ALPA bargained in Washington, D.C., for government help to resolve the situation, and in 1978, President Jimmy Carter issued an executive order authorizing an investigation into the labor-management difficulties. Although the Wien pilots would not return to the cockpit until March 1979, after 653 days had passed, the PEB ultimately led to the end of the dispute.

In recent years, many who initially supported airline deregulation have come to realize that it was an ill-conceived and poorly executed idea. Sen. Robert Byrd (D-W.V.), the longest serving senator currently holding office, recently cast his 17,000th Senate vote, a total that far surpasses that of any other senator in U.S. history. But Sen. Byrd admits that of all his votes in the Senate, he greatly regrets two. Specifically, he says he’d like to take back his vote against the 1964 Civil Rights Act, as well as his vote in favor of airline deregulation.

On Aug. 3, 1981, just 6 months into the Reagan administration, the 13,000 members of the Professional Air Traffic Controllers Organization (PATCO), under the leadership of Robert Poli, walked away from their jobs in protest over the U.S. government’s unwillingness to meet their contract proposals for higher pay, modern equipment, and better benefits that had been promised during the 1980 presidential campaign. Controllers had been in contract negotiations with the government for almost 6 months, but discussions broke down when it became apparent that the two sides were not progressing toward resolution. Ironically, PATCO had been the only union to support Reagan during his candidacy for president.

Transportation Secretary Drew Lewis had personally asked Capt. O’Donnell to facilitate a last-minute settlement between PATCO and the government. The night before the strike was to occur, Capt. O’Donnell mediated talks between Poli and Lewis. Former PATCO President John Leyden also participated.

"Many of the contract changes that PATCO sought required legislative action by Congress," says Hallisay, who was also present during discussions. "A quick resolution under these circumstances just wasn’t a realistic expectation."

Capt. O’Donnell did his best to convince Poli that reaching a settlement that night would be difficult, but that he, Capt. O’Donnell, remained committed to working through the issues to avoid a strike.

According to Hallisay, Poli and Lewis reached an agreement in principle on all the substantive issues, and he believes that many of the legislative roadblocks could have been overcome. But Poli wanted to walk away with a written agreement, something that Lewis said he couldn’t provide. So PATCO went ahead with the strike.

The job action violated a federal no-strike provision for public employees. President Ronald Reagan responded to the illegal action by firing employees who did not report to work the following day.

"ALPA worked aggressively behind the scenes to try to prevent the strike," says Hallisay. "But once controllers walked off the job, we focused our attention on keeping our pilots flying and making sure the skies were safe for the traveling public."

The strike resulted in the closure of 23 air traffic control facilities and the cancellation of more than 26,000 flights. Nevertheless, the government’s contingency plan anticipated many difficulties, enabling the airlines to continue operations throughout the strike. In the end, more than 11,000 controllers lost their jobs, permanently.

"We did everything we could to help the controllers get their jobs back," says Hallisay. "Although we pursued legislation toward that end and were able to get a bill passed in the House, we were never able to get it though the Senate and signed into law."

The effects of the strike continued to plague the industry for years afterward. Not until President Clinton took office almost 9 years later was an executive order signed rescinding Reagan’s earlier ban on rehiring the controllers. In fact, many believe that Reagan’s handling of the PATCO strike was responsible for the antilabor atmosphere that defined the decade and that legitimized the exploitive management practices of a ruthless airline executive named Lorenzo.

The post-deregulation era allowed unsavory management types to run amok within the U.S. airline industry. One such figure was airline industry tyrant Frank Lorenzo. By 1981, pilots at Texas International Airlines (TXI), a Lorenzo-held company, had been working without a new contact for more than a year. Lorenzo had created a holding company called Texas Air Corporation to enable him to funnel TXI resources to a new venture called New York Air, which he operated with a nonunion labor force.

"That’s when he started what was known as a double-breasted company," says Hallisay. "He took DC-9s on order from TXI, painted them red, put an apple on their tail, and created New York Air. He then used that as leverage against his unionized TXI pilots to get concessions, threatening to shift the flying to the nonunion carrier if he didn’t get what he wanted."

But TXI pilots fought back, and eventually Lorenzo signed a new contract with the pilot group. But even with a contract, labor unrest persisted as Lorenzo continued to play the two pilot groups against one another.

In 1982, after a failed employee attempt to buy Continental Airlines through an employee stock option plan, Lorenzo took control of the nearly bankrupt airline, just as its labor agreements were about to become amendable. After acquiring Continental, Lorenzo again used the strategy he had developed earlier with New York Air, stirring up dissent among the ranks of his competing pilot groups. He merged TXI with Continental in June 1982. In September 1983, he took the airline into Chapter 11, abrogated the union contracts, and imposed emergency work rules. In October 1983, Continental pilots went on strike.

Lorenzo’s ability to circumvent labor law and break existing labor agreements allowed him to resume operations and coerce striking workers into coming back to the job. The unions went to federal court to protect their contracts. But much to their dismay, they watched helplessly as the highest court in the land, with total disregard for the rights of U.S. workers, approved the tactic and allowed Lorenzo to continue his management abuses.

In 1984, the Supreme Court considered a case in which Bildisco, a trucking company operating under bankruptcy, abrogated a contract it had negotiated with members of the Teamsters union. The court ruled in favor of the company. The decision permitted companies undergoing reorganization under Chapter 11 to abrogate union contracts without having to prove that the reorganization would fail if contracts were not voided. Additionally, the court stated that companies did not have to obtain approval from the bankruptcy court before abrogating contracts.

But ALPA successfully promoted congressional legislation that amended the bankruptcy code, imposing stricter procedures and conditions for corporations seeking to modify or reject a collective bargaining agreement. The legislation effectively overturned the Supreme Court decision.

"We tried to make it retroactive so that it would apply to the Continental pilots," says Hallisay. "Frank Lorenzo hired practically every law firm in Washington to block us. Additionally, Lorenzo had strong relations with key members of Congress, Sens. Bob Dole (R-Kans.) and Strom Thurmond (R-S.C.) and Rep. Peter Rodino (D-N.J.), who was chairman of the committee considering the issue in the House. In the end, we just didn’t have the influence we needed to get retroactivity."

Although the legislation came too late to help Continental pilots, it was a major victory for ALPA and an important protection for all union workers. Never again could unscrupulous managers misuse the bankruptcy laws to disregard labor agreements its employees had negotiated in good faith.

"Today, it’s not possible for management to dictate the terms of employment to their pilots once companies go into Chapter 11," says Baker. "Airlines like United and US Airways that have recently reorganized under Chapter 11 can’t just throw out contracts because they no longer want to abide by the conditions to which they’ve agreed. They have to engage in good-faith bargaining to change those agreements. If they fail to agree after a reasonable time, the process is moved into the bankruptcy courts."

As a result of questionable conduct by Texas Air management after 600 pilots returned to their jobs following the strike at Continental, ALPA pursued legislation that would prohibit employers from requiring employees to undergo polygraph testing to obtain or keep a job. ALPA lobbied aggressively to prevent any amendment that might exempt airlines from the law. Sen. Phil Gramm (R-Tex.) offered such an amendment, which would have allowed management to use polygraph testing in any situation. But Sen. Edward Kennedy (D-Mass.) successfully blocked the amendment, and in 1988 Congress passed final legislation, which prohibited private employers from using polygraph tests in pre-employment screening and severely restricted them from administering them to existing employees.

By 1986, Lorenzo’s Texas Air Corporation had acquired three more airlines, including People Express, Frontier, and Eastern. Continental absorbed People Express along with New York Air, and for a time Lorenzo had the largest airline in the free world, second globally only to the Soviet state-owned Aeroflot.

"Eastern was in serious financial trouble," Baker explains. "Lorenzo ultimately did the same thing with Eastern and Continental that he’d done with TXI and New York Air. He started moving Continental airplanes onto routes flown by Eastern, pitting the unionized Eastern pilots against the nonunionized Continental pilots.

"As a result of Lorenzo’s mismanagement, we got 240 members of Congress to sponsor a resolution calling for a full-scale investigation of Eastern’s safety practices," says Hallisay. "In the meantime, the condition of the airline continued to deteriorate."

In 1989, members of the International Association of Machinists went on strike at Eastern. Eastern pilots respected the picket line and joined the striking machinists. One week later, President George H.W. Bush essentially ignored a National Mediation Board recommendation to appoint a presidential emergency board to attempt to settle the strike.

President Bush and Lorenzo had always been friendly. In fact in 1989, ALPA issued a list detailing some 30 instances in which Texas Air employees had accepted positions in the Bush administration, and former Bush administration officials had found lucrative positions with Texas Air. ALPA immediately turned to its political allies on Capitol Hill for help.

The House Aviation Subcommittee held an emergency hearing at which ALPA’s then-president, Capt. Henry Duffy, and other union leaders testified. In only 2 weeks, the House passed H.R.1231, a bill to require the president to appoint a PEB. But the vote stalled in the Senate as a result of a Republican filibuster.

With the backing of Sen. Kennedy and Sen. Bob Packwood (R-Ore.), the Senate finally considered H.R.1231 in October and amended it to create a congressional "Blue Ribbon Commission" to investigate the strike. Despite strong opposition from Texas Air and the Bush administration, ALPA eventually secured passage of the bill after enduring two cloture votes. However, when the bill was sent to the White House, President Bush vetoed it.

The House failed to get the two-thirds majority necessary to override the veto. But the override vote margin was larger than the original vote for passage, suggesting that a majority of House members agreed that Texas Air’s abusive management practices warranted closer scrutiny.

Soon thereafter, a bankruptcy judge appointed a trustee to oversee the airline and removed Lorenzo as CEO. In 1990, Lorenzo divested himself of his Eastern Airline holdings, selling his interest in the airline to Scandinavian Airlines System. SAS reportedly bought out Lorenzo for more than $30 million, but under the terms of the deal, he was also required to resign as CEO of Continental. Lorenzo stepped down just months before Continental filed bankruptcy for a second time.

But by the time Lorenzo let go of Eastern, it was too late to save the carrier. The airline had already lost more than $1 billion under his ineffective leadership. The airline, collapsing under the weight of its debt, laid off hundreds of workers and sold major assets. In January 1991, the airline ceased operation completely and was liquidated later that year.

In the aftermath of the Eastern fiasco, ALPA chose to do something it had never done before. In 1992, the Association’s Executive Board, which had never before endorsed a presidential candidate, entered the political fray by backing Democratic nominee Bill Clinton for president. It was the first such endorsement in ALPA’s 61-year history. The unprecedented action came about as a direct result of the 12 years of the Reagan/Bush administrations’ ill treatment of airline pilots.

In contrast to President Bush, Clinton placed himself steadfastly on the side of airline workers, opposing foreign ownership of airlines, supporting the prohibition against foreign cabotage, and vowing to ban permanent replacement of striking workers.

ALPA members campaigned tirelessly for Clinton, showing up at rallies across the country to demonstrate their support. The effort paid off substantially after President Clinton took office the following year.