ALPA Takes a New Flight Path

Air Line Pilot, May 2005, p.24

ALPA continues to travel through uncharted territory as 2005 unfolds. The U.S. airline industry as a whole has posted more than $30 billion in pretax losses since 2000 and has yet to reach the bottom of its financial freefall. Just about anything bad that could have happened did happen over the past 4 years: a terrorist attack; a war; a softening in the U.S. economy; increased competition from low-cost carriers; a substantial increase in taxes on airlines; high fuel prices; poor management decisions, such as loss of control over ticket pricing and others; and an anti-labor administration unsympathetic to the airline industry’s financial problems.

High labor costs have also often been blamed--incorrectly--as the cause of the industry’s financial problems. Forget the fact that $15 billion in annual revenue has disappeared from the U.S. airline industry, that our airlines seem unable to raise ticket prices to offset the rising cost of fuel, or that many managements are selling tickets below cost via the Internet. 

Pilots and, to a lesser degree, other employees have again become targets because, according to managements, labor costs are one of the few “controllable” expenses and employees have a vested interest in the survival of their airlines. 

Talk about déjà-vu all over again. Pilots at legacy or system carriers have been devastated by furloughs and by pay, work rule, and benefit concessions--including the termination of pension plans. 

The magnitude of these changes may be the most significant in the history of this or any other industry. Employee concessions since 2001 currently exceed $6 billion per year.

“Since the founding of our union,” says ALPA’s president, Capt. Duane Woerth, “the role of its elected leaders has been to steer the Association through the environment of the moment toward a better future. Balancing these two tasks--dealing with today and planning for tomorrow--has been and remains a difficult but essential job.”

In February, ALPA’s national officers, general manager, and department directors took a proactive step to reinvigorate the Association’s efforts as the champion for ALPA’s 64,000 members. They crafted a new approach to the exhaustive list of challenges that ALPA members face today--a strategy that includes a realistic assessment of this profoundly changed environment and a “game plan” for managing a way through it.

The new and different environment in which ALPA, its members, and the airlines operate today requires a reassessment of earlier strategies and effective planning for the future. ALPA expects airline managements to develop and implement workable business plans, and ALPA members require their union to protect their interests during this evolution of the airline industry. Members expect ALPA to communicate a plan for the future, provide hope that their profession and career will remain viable and valuable, and fight aggressively on their behalf during difficult times.

What must ALPA be to--and do for--its members? According to the new approach, it must

• reassert itself as an aggressive advocate of its members and the airline piloting profession,

• be visible in defending the airline piloting profession,

• provide value through membership,

• maintain a balance in how it operates and how member pilot groups interrelate within the union, and

• focus constantly on planning and coordination.

In the end, ALPA must work to continue to be relevant to its members--it must adapt to the new reality. In this new strategic plan, ALPA outlines its priorities in some specific arenas.

Contract negotiations and enforcement

ALPA must balance a pragmatic business-like approach to negotiations with a greater focus on more aggressive labor strategies. In the current political environment, ALPA must emphasize a different set of strategies, including carrying its message to broader audiences to generate leverage and reestablish positive bargaining trends.

With an increasing number of pilot groups in long-term agreements, and managements inclined to squeeze more productivity out of a contract that they are legally entitled to, grievances have increased in number and will continue to do so. ALPA must strengthen its contract enforcement efforts--and make them more efficient and strategic--to enhance success and to focus pilot frustration and anger at management and not have that frustration turn toward the union. Such efforts should include not only the processing of grievances but also communications activities, such as informational picketing and pilot contract educational initiatives.

Benefits and job security

The most alarming characteristic of this particular industry downturn is the unprecedented attack on pilot pensions. While pensions are undergoing major adjustments, ALPA must play a large role in determining the outcome for its affected members by making a top priority of securing effective pension reform legislation.

In 2004, ALPA successfully secured temporary relief from the onerous deficit-reduction contribution rules for a 2-year period. ALPA is taking the lead to work with several airline managements to develop and promote legislation to permanently fix these onerous and outdated funding rules. In addition, ALPA is working to develop legislation to change the Pension Benefit Guaranty Corporation rules so that pilots who must retire at age 60 would not have their PBGC-guaranteed benefits actuarially reduced.

A “perfect storm” situation--involving declining plan asset values, low interest rates, and accelerated funding obligations to make up funding deficits--has created massive defined-benefit funding obligations for several airlines at a time of record financial losses. This has led to the termination of the US Airways pilots’ defined-benefit plan, and the United pilots agreeing not to oppose termination of their defined-benefit plan in bankruptcy court under certain conditions and subject to timing considerations. Delta pilots have agreed to freeze their defined-benefit plan, and other pilot groups are considering freezing their defined-benefit plans and/or rebalancing their pension packages away from defined-benefit plans and toward defined-contribution programs.

Communications

ALPA has rededicated itself to expanding its outreach to members in new ways. First and foremost, ALPA has and will continue to expand its external communications activities. The union will focus on more effectively getting its message--including defending and enhancing the image of the profession and of ALPA--to broader audiences, including the financial markets. 

Greater interaction between ALPA’s leaders and members, building member support for the union, and enhanced coordination are all key elements of the strategic plan.

With the recent ALPA Advocacy Survey and the upcoming Age 60 Survey, ALPA will more frequently seek direct input from its members on the direction of their union and will continue to use ALPA-wide polls to determine the views, sentiments, awareness, and priorities of its members.

The new Association website, launched in October 2004, is continuously updated with relevant and timely information. ALPA-generated news releases and an automated airline industry news feed are frequently updated to keep the union’s members in the know. 

Recent enhancements to the Association’s message boards ensure greater reliability in functioning so that they remain a viable means of member communication.
ALPA has already begun sending its electronic newsletter, FastRead, in an html format that allows graphics, charts, photos, and other artwork to be included and e-mailed without changing the size of the file sent to each member. In addition, the new format allows readers to “jump” directly to articles they feel are important and to return to the publication’s beginning to select another article. In the near future, MEC and LEC newsletters may adopt this same format, which will allow ALPA to send timely and graphically pleasing electronic publications to members without incurring high postal costs.

Legislative and regulatory activities

A key function of ALPA is to be an advocate for members in the development of legislation and regulations in the United States and Canada and, through its work with such groups as the International Federation of Air Line Pilots Associations and the European Cockpit Authority, around the world.

ALPA needs to get tougher with government and be more willing to publicly criticize action/inaction that is contrary to ALPA members’ best interests. The Association needs to continue to focus on its key issues--protecting pilot pensions and health benefits, preventing cabotage, limiting foreign ownership, protecting U.S. and Canadian pilot jobs, working for national airspace modernization, and getting safety regulations harmonized, taxes and fees on the airline industry rolled back, security tightened, and rules enacted to reduce pilot fatigue. ALPA will also have to develop an aggressive Age 60 strategy consistent with Executive Board action.

The future

The Association recognizes the courage and determination of all ALPA members as they persevere through this difficult phase in airline history. The Association expects airline managements to carry out effective planning and strategies, and ALPA members expect the same from their union. Members expect ALPA to communicate a plan for the future, provide hope that their professional careers remain viable, and fight aggressively on their behalf.

On March 21, ALPA’s president and general manager presented this plan to the Association’s staff. An overview of the economic climate and its effect on ALPA in 2004 made clear that this new strategy will require greater use of even scarcer ALPA resources. ALPA’s staff will be tasked with greater responsibilities in providing the services extended to members--and with their dedication, ALPA will remain a critical force in this industry’s future.

“As ALPA approaches its 75th anniversary in 2006, one of our responsibilities,” according to ALPA General Manager Jalmer Johnson, one of the primary authors of the strategic plan, “is to make sure this union continues to be viable and relevant to its members for the next 75 years.”

By combining all of its efforts and pulling in the same direction, ALPA can steer itself to a better place in its future.

The full text of the Association’s Summary Situational Assessment and Strategic Plan Priorities is available in Crewroom.alpa.org in the Communications segment of the Library.