Midwest Pilots Seek a Balanced Approach

By Barbara Gottshalk, Communications Specialist
Air Line Pilot, June/July 2005, p.21

The year 2005 started out on a promising note for the Midwest Airlines pilot group. Nearly a year and a half after ratifying a concessionary agreement to help their airline’s parent company, Midwest Holdings, Inc., avoid bankruptcy, furloughed pilots were being recalled, and a new senior management team signaled a shift to a more positive working relationship between pilots and management. Midwest management has made clear that 2005 is a make-or-break year for the airline, and one of its primary goals is to end the year on an even cash-flow basis.

But even as Midwest pilots had reasons to feel cautiously optimistic, the airline’s management made several decisions regarding pilots’ benefits that threaten the pilot group/management relationship. As ALPA has seen at so many airlines, the pilot group leaders now find themselves having to maintain a balance between continuing to cooperate with management and vigorously defending the pilots’ benefits under the collective bargaining agreement.

At issue are recent management decisions regarding both the active-employee and retiree health insurance programs. First, management decided to change the health insurance cost-sharing ratios for active employees, effectively shifting more of the costs to the pilot group. The Midwest Master Executive Council opposed management’s decision and proposed a comprehensive redesign of the health insurance program to be effective in 2006 to solve the overall problem of rising costs of active-employee health insurance.

The MEC chairman, Capt. Jay Schnedorf, believes that management, by taking this action, has reneged on a commitment it made to the pilots last year. “While obtaining the discretion to alter copay amounts in 2004, management made a tacit promise to the employees to contribute to health insurance premiums for 2005 at a certain rate. Our pilots selected among insurance plans and made decisions regarding contributions to their medical spending accounts based on that commitment. Now, our pilots can expect their premiums to jump by a third or more. That’s tantamount to a unilateral pay cut.”

The second issue relates to management’s decision to cut retiree health insurance benefits by changing eligibility criteria and cost-sharing calculations. The MEC believes this action is a violation of the collective bargaining agreement and recently filed an MEC group grievance and requested a hearing.

And the MEC isn’t stopping there. The MEC officers, at their April MEC meeting, committed to defend their contract using every available legal means to ensure that the pilot group wins this fight. “We had to draw a line in the sand,” Capt. Schnedorf said. “Time and again, when management faced a challenge, our pilot group proposed effective, realistic solutions. Now, instead of recognizing Midwest pilots for their efforts, management has defaulted on its commitment to our pilot group,” he added.

Pilots as part of the solution

Over the last several years, Midwest pilots have proved they are problem solvers for their company:

• When the airline began to replace its DC-9 fleet with B-717s, the pilot group’s leaders designed a plan to meet the airline’s goals for retraining and introducing the new equipment.

• When management asked for relief because of increased fuel costs, the MEC crafted a short-term solution to meet those needs by granting immediate reductions in pay.

• In the summer of 2003, the pilot group approved a comprehensive restructuring of its contract to help accomplish the airline’s long-term goals and avoid bankruptcy.

• More recently, the pilot group agreed to amendments to the restructuring agreement to meet management’s needs while protecting the main interests of the pilot group.

The latest effort by the pilot group is the formation of the Business Development Committee, which the MEC approved at its January meeting. The mission of the BDC is to work directly with senior management to advance the airline’s business goals for the year. Capt. Bryan Jandorf, who also serves as chairman of the Jumpseat Committee, was appointed the first BDC chairman.

The original idea for the group was met with enthusiasm by Midwest Air Group President and CEO Tim Hoeksema. He endorsed the idea and presented it to his senior leadership team, who added their support, and assigned three senior management representatives from operations, marketing, and customer services to be liaisons to the pilot Committee. The primary work of the Business Development Committee--which is made up of pilots with advanced degrees in business and aviation management, broad experience as successful business owners, and experience in working with senior-level management representatives--will be to develop initiatives to take advantage of marketing and promotional opportunities, enhance customer services, and improve operational productivity and efficiencies.

Capt. Jandorf explains, “The survival of the airline industry requires direct involvement of the airline’s employees. The Business Development Committee is a means to tap into employees as a resource and get pilots more involved in operations other than just flying airplanes. Being on the front line, we are in a unique position to see problems and cost-effective ways to solve them. The Committee provides a framework for taking the next step--to ensure that the solutions we propose are put into effect.”

The idea for the Committee came from a group of Midwest pilots eager to help the airline again become profitable after 18 months of lackluster financial performance. The pilots saw ways to improve operations, promote the airline, and enhance customer services, and they believed that working with management to develop these ideas would lead to positive results.

Initially, some pilots questioned how the new Committee could succeed where other similar initiatives that management had proposed had failed. Responding to these concerns, the MEC cited several key differences. First, the idea for this Committee came from the pilots at the grassroots level--management had not imposed it. Second, in endorsing the idea, management recognized the leadership role that Midwest pilots have taken to help the airline become financially stable. Finally, practical necessity has made achieving the airline’s business goals a top priority.

To date, the Business Development Committee is moving forward with several initiatives. In April, customer service training was offered to the pilots, every 2 hours throughout the day, beginning at 8 a.m., for 6 days. More than 60 pilots took advantage of the program, which is the first step in advancing the Committee’s mission to enhance Midwest Airlines’ reputation for providing the “best care in the air.” Additionally, the Committee has begun coordinated, regular visits to the gate area by uniformed pilots to meet and talk with passengers, to let them know that pilots are a big part of making their travel experience satisfactory.

Striking a balance

The MEC vice-chairman, Capt. Mike Rabbitt, believes that the pilot group can strike a balance between cooperating with management to achieve the airline’s goals and confronting it to defend the rights of Midwest pilots and ensure that the airline complies with the contract. “In the fluid, complex situation our industry is in, we must play offense and defense. We can build management’s trust through cooperation, while at the same time build our pilots’ respect through our determination to protect their interests,” he says.

First Officer Greg Uselmann, MEC secretary-treasurer, agrees and sees being part of a union as a key factor in maintaining that balance. “As a union, we can make a difference. When management fails to honor its commitments to employees, nonunion employees cannot do much. However, as union-represented employees, when our pilots’ interests are in jeopardy, we have the resources and the leadership to address that challenge head on.”

“Even when we’re not in contract negotiations, union members must remain committed and fully engaged to achieve their goals. Sometimes that means working with management on cooperative efforts; sometimes it means drawing a hard line in the sand to defend a contract; and occasionally it means you do both. Without commitment and engagement, everyone loses,” Capt. Schnedorf says.

As the Midwest pilots deal with their professional challenges and those of their airline, it’s clear that the unity and commitment of their MEC leadership will help them find the balance necessary to face the future.