A contract vote at Charlotte-based CCAir has become the focus of a bitter
fight between the airline pilots union and the airline's top executive, an
entrepreneur who has built a business operating small jets at low cost.
About 100 CCAir pilots are deciding whether to approve a new contract in
voting that began last week and concludes Wednesday. Operating as US Airways
Express, CCAir offers 30 daily departures from Charlotte to 12 small cities.
CCAir has said it will be forced to shut down if it can't reduce labor
costs. If the new contract is approved, executives say, the airline -- which
now flies 12 turboprops seating 19 to 39 passengers -- can enter the growing
business of flying 50- to 90-seat small or regional jets.
Although it offers incentives, including a year of pay for furloughed pilots
and a signing bonus, the proposed contract generally reduces wages and
tightens work rules. The reductions and changes are so severe, says the
national president of the Air Line Pilots Association, that the national
union can't approve it.
Without that approval, the contract cannot take effect, which means the vote
is essentially meaningless. "The contract is too flawed to accept," ALPA
President Duane Woerth said in an interview.
CCAir is operated by Phoenix-based holding company Mesa Air Group, which is
headed by Chairman and Chief Executive Officer Jonathan Ornstein. Woerth
compares Ornstein to Frank Lorenzo, whose bitter fight with union employees
at Eastern Airlines led to the airline's shutdown 11 years ago.
"Ornstein is following a classic playbook, a union-busting playbook," he
said. "He bought the company and shrank it, and now he says, `We'll grow it
again, but first you have to be the cheapest people in aviation.' "
After buying Eastern in 1986, Lorenzo moved key assets to a sister carrier,
Continental Airlines, which had lower costs. Woerth said Ornstein wants to
follow a similar course at three Mesa-owned airlines, directing new small
jets to the airline with the lowest wages.
Ornstein rejected the comparison with Lorenzo.
"If I felt there was a shred of truth to it, it would bother me," he said.
"But there's only one person saying it, and if Captain Woerth had taken as
much time as I have to know what our pilots want, he would know it was
untrue."
The contract battle has become a crucial issue for the Air Line Pilots
Association, the 64,000- member union representing pilots at 43 airlines in
the United States and Canada, because the use of small jets is increasing
rapidly.
"Even though CCAir is a relatively small player, it could become a chapter
in the history books, because the new frontier of airline labor relations is
being defined at regional carriers," said David Field, Americas editor of
Airline Business magazine.
Field called the outspoken Ornstein a trend-setter in the small-jet
industry, noting, "What he does should be closely watched."
Small jets became popular in the 1990s. They allow airlines to serve routes
that don't have enough traffic for bigger jets. But, historically, pilots at
the major carriers have opposed their use. Because small jets are flown by
small carriers with lower wages, major airline pilots fear the flying they
do will be transferred to the lower-cost alternative.
This puts ALPA in a tough situation, because it represents pilots at small
carriers such as CCAir and sister carrier Mesa Airlines, as well as at major
airlines. "ALPA has a moral obligation to represent all of its members, and
it's not easy," Field said.
Last year, more than one out of every eight U.S. airline passengers flew on
small or regional jets seating 50 to 70 passengers, according to the
Regional Air Service Initiative, a group of manufacturers and suppliers.
Airlines now fly about 800 small jets and have ordered 946 more.
The national union stepped into the CCAir battle last year, after CCAir
pilot union officials agreed to reopen a contract previously scheduled to be
in effect until November. In February, the national union refused to sign
off on a tentative contract agreement reached by local officials. A
tentative new agreement, with slight alterations, was negotiated in March.
Woerth said if CCAir needs financial relief, the union will provide that --
but not for the five-year term of the proposed contract. "I'm willing to
address near-term survival, but not with a blank check that has nothing to
do with the near term," he said.
CCAir President Carter Leake said changes are desperately needed at CCAir,
which is losing $700,000 to $800,000 a month after suffering a $7 million
pre-tax loss in 2001. Because pilots are the highest-paid labor group, their
contract is the key to reducing costs. CCAir has 142 pilots, including 80
slated for furlough and about 42 not eligible to vote on the contract
because they have less than a year on the job
The contract offer represents an effort to reduce CCAir's pilots wages to
more closely match those at Mesa Airlines. The differences are small in some
cases, but significant in others. Pay for a five-year first officer on a 20-
to 39-seat plane would fall from $31 to $24 hourly.
CCAir pilots normally fly about 1,000 hours a year; wages vary from about
$20 to $55 hourly.
Leake argues that, in some respects, the contract is better than the Mesa
contract. For instance, it includes a signing bonus of several thousand
dollars and a year of no-furlough protection. He said if CCAir survives and
gets contracts to fly small jets, pilots would be paid more than they earn
for flying turboprops.
"Captain Woerth has grossly underestimated this pilot group's resolve to
determine their own destiny, and he will quickly learn that the CCAir pilots
are not about to follow him into some quixotic campaign against Mr.
Ornstein," Leake said.
But a CCAir pilot, who asked not to be named, said the vote, being conducted
online, could be close. "A lot of people are clearly opposed to this
contract, but others are not," he said. "Really, it's hard to tell where
people stand. It's hard to know what they will do in the privacy of their
den."
fight between the airline pilots union and the airline's top executive, an
entrepreneur who has built a business operating small jets at low cost.
About 100 CCAir pilots are deciding whether to approve a new contract in
voting that began last week and concludes Wednesday. Operating as US Airways
Express, CCAir offers 30 daily departures from Charlotte to 12 small cities.
CCAir has said it will be forced to shut down if it can't reduce labor
costs. If the new contract is approved, executives say, the airline -- which
now flies 12 turboprops seating 19 to 39 passengers -- can enter the growing
business of flying 50- to 90-seat small or regional jets.
Although it offers incentives, including a year of pay for furloughed pilots
and a signing bonus, the proposed contract generally reduces wages and
tightens work rules. The reductions and changes are so severe, says the
national president of the Air Line Pilots Association, that the national
union can't approve it.
Without that approval, the contract cannot take effect, which means the vote
is essentially meaningless. "The contract is too flawed to accept," ALPA
President Duane Woerth said in an interview.
CCAir is operated by Phoenix-based holding company Mesa Air Group, which is
headed by Chairman and Chief Executive Officer Jonathan Ornstein. Woerth
compares Ornstein to Frank Lorenzo, whose bitter fight with union employees
at Eastern Airlines led to the airline's shutdown 11 years ago.
"Ornstein is following a classic playbook, a union-busting playbook," he
said. "He bought the company and shrank it, and now he says, `We'll grow it
again, but first you have to be the cheapest people in aviation.' "
After buying Eastern in 1986, Lorenzo moved key assets to a sister carrier,
Continental Airlines, which had lower costs. Woerth said Ornstein wants to
follow a similar course at three Mesa-owned airlines, directing new small
jets to the airline with the lowest wages.
Ornstein rejected the comparison with Lorenzo.
"If I felt there was a shred of truth to it, it would bother me," he said.
"But there's only one person saying it, and if Captain Woerth had taken as
much time as I have to know what our pilots want, he would know it was
untrue."
The contract battle has become a crucial issue for the Air Line Pilots
Association, the 64,000- member union representing pilots at 43 airlines in
the United States and Canada, because the use of small jets is increasing
rapidly.
"Even though CCAir is a relatively small player, it could become a chapter
in the history books, because the new frontier of airline labor relations is
being defined at regional carriers," said David Field, Americas editor of
Airline Business magazine.
Field called the outspoken Ornstein a trend-setter in the small-jet
industry, noting, "What he does should be closely watched."
Small jets became popular in the 1990s. They allow airlines to serve routes
that don't have enough traffic for bigger jets. But, historically, pilots at
the major carriers have opposed their use. Because small jets are flown by
small carriers with lower wages, major airline pilots fear the flying they
do will be transferred to the lower-cost alternative.
This puts ALPA in a tough situation, because it represents pilots at small
carriers such as CCAir and sister carrier Mesa Airlines, as well as at major
airlines. "ALPA has a moral obligation to represent all of its members, and
it's not easy," Field said.
Last year, more than one out of every eight U.S. airline passengers flew on
small or regional jets seating 50 to 70 passengers, according to the
Regional Air Service Initiative, a group of manufacturers and suppliers.
Airlines now fly about 800 small jets and have ordered 946 more.
The national union stepped into the CCAir battle last year, after CCAir
pilot union officials agreed to reopen a contract previously scheduled to be
in effect until November. In February, the national union refused to sign
off on a tentative contract agreement reached by local officials. A
tentative new agreement, with slight alterations, was negotiated in March.
Woerth said if CCAir needs financial relief, the union will provide that --
but not for the five-year term of the proposed contract. "I'm willing to
address near-term survival, but not with a blank check that has nothing to
do with the near term," he said.
CCAir President Carter Leake said changes are desperately needed at CCAir,
which is losing $700,000 to $800,000 a month after suffering a $7 million
pre-tax loss in 2001. Because pilots are the highest-paid labor group, their
contract is the key to reducing costs. CCAir has 142 pilots, including 80
slated for furlough and about 42 not eligible to vote on the contract
because they have less than a year on the job
The contract offer represents an effort to reduce CCAir's pilots wages to
more closely match those at Mesa Airlines. The differences are small in some
cases, but significant in others. Pay for a five-year first officer on a 20-
to 39-seat plane would fall from $31 to $24 hourly.
CCAir pilots normally fly about 1,000 hours a year; wages vary from about
$20 to $55 hourly.
Leake argues that, in some respects, the contract is better than the Mesa
contract. For instance, it includes a signing bonus of several thousand
dollars and a year of no-furlough protection. He said if CCAir survives and
gets contracts to fly small jets, pilots would be paid more than they earn
for flying turboprops.
"Captain Woerth has grossly underestimated this pilot group's resolve to
determine their own destiny, and he will quickly learn that the CCAir pilots
are not about to follow him into some quixotic campaign against Mr.
Ornstein," Leake said.
But a CCAir pilot, who asked not to be named, said the vote, being conducted
online, could be close. "A lot of people are clearly opposed to this
contract, but others are not," he said. "Really, it's hard to tell where
people stand. It's hard to know what they will do in the privacy of their
den."
