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December 9, 2002
ALPA President Rails Against UAL Forced Bankruptcy, Says Government Failed Legacy Airline
WASHINGTON, D.C.---The following statement was released today by Captain Duane Woerth, president of the Air Line Pilots Association International, which represents 66,000 airline pilots, along with those who fly for United Airlines:
"The aviation industry has been dealt yet another blow today as one of this nation’s greatest airlines was forced to file for Chapter 11. Pilots across the country are saddened, disappointed and angry that an airline as eminent as United, which was used symbolically by terrorists to carry out mass destruction, is now in bankruptcy. It pains me to acknowledge that terrorism scored another victory today, and this Administration let it happen.
"It was evident that the industry was entering an economic downturn prior to 9/11, but the spiraling effects of that tragedy, with the fall-off of passenger travel, increased security costs, ever escalating aviation taxes and mounting airline debt created a crisis in commercial aviation. Congress recognized this immediately following 9/11 by granting short-term financial aid and establishing the Air Transportation Safety and System Stabilization Act to guarantee long-term loans for those airlines most severely impacted by terrorism. Yet the Board that is in charge of guaranteeing these loans has turned its back on two airlines hit hardest by 9/11, United and U.S. Airways, whose core East coast operation nearly shut down when Washington Reagan airport closed indefinitely for security reasons. Instead of stabilizing the industry, the ATSB is doing its best to de-stabilize it, and this Administration – which has intervened in more than one dispute citing fears of crippling the economy – is ironically idly sitting by and letting another of our nation’s premier airlines go into bankruptcy.
"Perhaps President Bush needs to go beyond ousting his two top economic advisors and take a close look at the workings of the ATSB, for they are doing our industry more harm than good, and certainly not living up to their Congressional mandate. Even the head of the Air Transportation Association, Carol Hallett, recently said the only solution to our industry’s malaise may be to nationalize the airlines! Is this on the Administration’s agenda, or are they merely out to hammer down airline employee wages regardless of the consequences? Isn’t it enough that to finance the War on Terrorism, the industry that was its primary victim is being asked to pay for the war through increased user fees and security costs, laying much of the burden on the backs of airline employees?
"Somebody should start asking why the ATSB would not guarantee a loan for an exceptional company such as United, especially after its labor groups agreed to billions of dollars in wage concessions over five and a half years. Is this Administration so worried about the nation’s poor economy that it believes the present economic downturn will last that far into the future, and thus prevent an airline as great as United from making a profit and paying back its loan?
"And, somebody should also ask why the global airline industry is doing so much better than that in the U.S.? Their labor costs are higher and productivity lower than U.S. carriers, but they’re still profitable. Could it be that the sudden drop in business travel revenue, excessive Internet fare discounting, mismanagement of pension funds, bad business plans and relentless U.S. government increases in user fees and taxes on our industry, in addition to the tragedy of 9/11, have something to do with the state of the U.S. airline industry? Taxes alone make up 44 percent of a $100 domestic ticket, higher than even the cigarette "sin tax" of 18 percent!
"Unlike this Administration, ALPA will not give up on our U.S. airlines or its employees. Pilots have worked closely with United Airline’s management to support the ATSB loan process, and they will continue to work with them to save their airline. ALPA will put the full weight of its resources behind the United pilots to help them work through this bankruptcy."
ALPA is the world’s oldest and largest pilot union, representing 66,000 pilots at 43 airlines in the U.S. and Canada. Visit ALPA’s website at http://www.alpa.org.
ALPA CONTACT: Anya Piazza, (703) 481-4440