Welcome to Flightinfo.com

  • Register now and join the discussion
  • Friendliest aviation Ccmmunity on the web
  • Modern site for PC's, Phones, Tablets - no 3rd party apps required
  • Ask questions, help others, promote aviation
  • Share the passion for aviation
  • Invite everyone to Flightinfo.com and let's have fun

Unions, Airlines and Economics

Welcome to Flightinfo.com

  • Register now and join the discussion
  • Modern secure site, no 3rd party apps required
  • Invite your friends
  • Share the passion of aviation
  • Friendliest aviation community on the web
The bottom line is that in today's modern big company that is unionized, for the most part you have a system set up that is not capable of rapid response to major changes in a companies health and prosperity.

As in the example of flight attendants, union contracts which reward for staying around is probably a detriment. Your cost continues to increase for a job that has a lower value. In some carriers, you had a spread of from $18,000 to $50,000 for a flight attendant all doing the same job.

A customer service rep sees a FA making $45,000 and she is making $25,000 and they want and they become union and start negotiating for it.

What we see today is the result of this thinking. A system so screwed up that all of humpties men could not put it back together again.
 
enigma said:
There is a logical reason for a 12 year pilot to make more than asixyear pilot. It is this: the company chose to reward an employeeforhis/her loyalty.

There is a very good reason for doubling pay for the left seat. Theleftseat has all of the responsibility. Period. I value my FO's, Iattemptto treat them as equals; but end the end I am the pilotacceptingresponsibility for the safe and legaltransportation of aircraft,passengers, and crew. If you pay the rightseat equal pay, you must givethem equal responsibility. If that was aviable plan, I think that maybethe military would have adopted it longago. I wasn't military, but I doread Tom Clancy:), and I don't believe that an aircraft carrier is commanded by Co-Captains.

enigma

I was referring to the 12 year Capt. vs a 6 year capt and a 12 year FO vs a 1 year FO, both on the same equipment. I guess you can say this is to compensate for loyalty to the company, but that loyalty compensation goes right out the window when the economy takes a dump. Now instead of being compensated, you are trapped. I think it's a system that needs to be changed. It's contradictory to your own interests.

I see the need for unions in the airline world; however, I do think that some of the problems that exist today are a product of unionized labor. Not the unions themselves, but some of the policies and goals that should have changed when de-regulation happened.
 
enigma said:
A couple of quick notes. TonyC, ya da man bro!
enigma said:
Another point, to you who want the free market to be completely in charge. Would you buy a ticket on a totally unregulated airline? I doubt it. Whether you like unions or not, reasonable people recognize that our industry needs safety regulation and when regulation comes in, the free market goes out.



The next point in this ramble. What would pilot wages and work rules be like in a totally unregulated environment? I'll bet that wages would be low, and work rules would be non-existant. Would you all be as motivated to work in the business if all jobs were as crappy as a non-demand 135 job? Again, I doubt it.

enigma


I thought this thread was about unions but now I see the leap has been made to regulation. While I would not care to fly on an "unregulated" airline, I would feel perfectly content to fly on an airline where the employees are not represented by a union.

Ya know, in all of the years that I flew I could never understand why people felt like the ability to operate a piece of equipment that just happens to fly makes them worth any particular level of pay. If a pilot's skill is so valuable, why the need for a union in the first place? I have come to believe that it is basically for the purpose of legalized extortion.

Yes, I am quite comfortable with the market setting wages. The market is not "regulating" the certification requirements.
 
RW/FW Ex-Army W said:
Yes, I am quite comfortable with the market setting wages. The market is not "regulating" the certification requirements.

Well to a certain degree that is a good thing. However, there comes a time where a job is worth what it is worth. For example, the market allows Ben and J'Lo to make lots of green but are they worth it (please say no!)? The quals needed to fly an airplane are worth more but some companies pay less because of the market (whether it is cheap wages and/or ticket prices). Think it needs to be a combination of market and worth. Probably why I'll never be in ivory tower management.

Back to the union thing, think it comes down to respecting your fellow man and their worth whether you're management or labor. Too simplistic I know.
 
"Mutual Aid"

Back in the old days before de-reg there was a pact called "Mutual Aid". This provided income to airlines that were shut down by employees on strike. If the employees at ABC Airlines went on strike and the load factor on XYZ Air went up, some of the revenue from the increased load factor at XYZ Air flowed back to ABC Airlines. This gave the shut down airline a source of revenue to allow them to let the employees stay out on strike a longer time. It gave a balance to both management and union to reach a reasonable contract. When mutual aid went away, it gave the unions a much stronger hand. The highly leveraged airline could not stay in business with a stop in cash flow for any extended period. This lead to shorter strikes, and contracts company would prefer not to enter. This stronger position may have been good for the employee in the short term, but is has been detrimental to the airline industry in the long run.
 
Wow,

Were to start. Just got back from work and see mucho activity. Not sure I can address everything but here goes.

enigma said:
Another point, to you who want the free market to be completely incharge. Would you buy a ticket on a totally unregulated airline? Idoubt it.

Yes I would. I believe other folks would as well. The simple fact isthat consumers will not fly an an unsafe airline regulated orunregulated. That becomes the motivation for the airline to remainsafe, safety = revenue.

Many of the other sentiments seem to be that management will not paypeople what they are worth, they will fire them indiscriminatly andeveryone in general will be unhappy. When we start to step back andlook at this statement as it relates to the airline industry we mightlook to one of the largest unionized airlines in the business. UAL isone of the largest airlines with one of the largest unions if youinclude pilots, machinists, FA's (not part of ESOP) and non unionemployees. When we start researching it, UAL majority ownership is heldby its union employees. Actually 55% of the company is owned by theunion employees and 3 out of 12 board of director chairs are held byworker representation. Pilots as a whole owned 25.4% of the company,machinists with 20.4% and salaried employees and management with 9%.The remaining stock is owned by individuals across the country.
In all respects this should have been a boon for the union folks. Andaside from UAL, no public company has an ESOP where the workers ownmore than 50 percent of the outstanding stock. They OWN the company yetthey are the ones who are going to put themselves out ofbusiness. When everyone espouses the evils of "management" looknor further than United's union owned company. The only place whereeveryone is in essence managment because they own it.
 
anjinoo7, You have more faith in the consuming public than do I.

I believe that you are wrong about the present ownership stake inUALheld by the employees. I also believe that the employees neveractuallyheld a controlling interest on the board of directors, I'llhave to aska UAL guy to help me out on that.

You still haven't answered my question about which current majorairlinehas the largest percentage unionized workforce. I'm alsostill waitingfor you to tell me which major is also profitable. I'llgive you a hint,they are one and the same. Explain that.

enigma
 
What are ya going to do about it?

And another thing anjinoo7, just how do you propose to changethesystem? Let's assume that you are correct, and unions are the badguy.Tell my why JetBlue, a wildly successful start-up, hasinstitutedpolicys and work rules that largely mirror the policys andwork rulesimposed by the unions? Why hasn't UAL decertified ALPA? Whyhasn'teveryone else decertified ALPA? Do you propose that all majorairlinepilots are just economically stupid?

I'll give you a hint. Most airline pilots, excepting those workingforSWA, AirTran, and JetBlue, just don't trust management. Too manylieshave been told, too many golden parachutes have been deployed, toomanypromises broken. My buds at the afforementioned companies, allfeelthat they can trust those who run their companies. That level oftrustallows those employees to focus on doing their jobs, not onprotectingthemselves from arbitrary and capricous actions ofmanagement.

Here's my philosophy (and I'm stickin to it:))Attitudeand environment comes from the top down. If a company and itemployeessuffer from bad relations, it's managements fault becausethey set thetone.

Along that vein, I have to ask....If unions are the problem, whydid thepilot groups at DAL, AA, AAA, UAL, NWA, etc, agree to reducedwork rulesand pay? According to the standard management line, labor istheproblem, (insert sarcasm) so why did those groups agree to work forlessand under less favorable conditions???????????????

enigma
 
Engineers v. Pilots

Engineer Pilot comparison is interesting.

I have been a 135 jet pilot and engineer.

Engineer:
*Can usually find a job if he loses his for about the same pay.
*Has unlimited potential to acquire wealth albeit not always by income alone based on an ability to invent, design, build and sell.
*Is a profession that takes years to be seasoned and excel at.
*This job is challenging but not as fun as flying airplanes.

Pilot:
*Can't usually find a job if he loses his for about the same pay (at a major), otherwise yes.
*Is restricted by seniority system at major airline for income advancement.
*Is a profession that takes years to be seasoned at not to mention safe.
*This job is more fun than work.

That being said, I view the prospects for major hub and spoke airline pilots to be continually under assault from LCC's on the domestic routes and management and wall street bankers on the international long haul routes.

Check Six
 
enigma said:
anjinoo7, You have more faith in the consuming public than do I.

I believe that you are wrong about the present ownership stakeinUALheld by the employees. I also believe that the employeesneveractuallyheld a controlling interest on the board of directors,I'llhave to aska UAL guy to help me out on that.

You still haven't answered my question about which currentmajorairlinehas the largest percentage unionized workforce. I'malsostill waitingfor you to tell me which major is also profitable.I'llgive you a hint,they are one and the same. Explain that.

enigma

Here is my reference for the ownership stake of UAL. You might be righthowever that that stake has changed since the bankruptcy filing butnone the less it was true up until it.

http://www.businessweek.com/2000/00_12/b3673128.htm

Oh yeah and another:
http://www.forbes.com/2003/03/05/cx_ld_0305esop.html
and another http://securities.stanford.edu/news-archive/2003/20030303_Headline08_Staff.htm
and another
http://slate.msn.com/id/2069362/

Try using Google sometime it's a great tool!:)

As far as the most profitable and and largest percentage of workers whoare unionized, please do tell. I wait with baited breath for you totell us all (please include references as I did).
 
Anjinoo, answer me this...

Say you own something that, oh, I dunno, 100 other people have. 20 people have sold that something for $100. What do you think your something is worth? You're going to say $100, right? Well, what happens if nobody buys your something? It's not worth anything now.

That was a major problem with ESOP. The stock the employees had was not able to be sold on the open market, thus decreasing its value. Management was free to jerk the employees around, and there's nothing they could do about it.
 
Anjinoo,

Have you read the RLA or do you understand how it works? Are you aware of the NMB and its role? Not just its "theoretical" role but the real role that it plays in today's negotiations processes? And are you aware of how the RLA differs from the NLRA?

-Neal
 
smellthejeta said:
Anjinoo, answer me this...

Say you own something that, oh, I dunno, 100 other people have. 20people have sold that something for $100. What do you think yoursomething is worth? You're going to say $100, right? Well, what happensif nobody buys your something? It's not worth anything now.

That was a major problem with ESOP. The stock the employees had was notable to be sold on the open market, thus decreasing its value.Management was free to jerk the employees around, and there's nothingthey could do about it.

Sorry Smelly but be that true or untrue, the fact remains the unionswanted it, got it and are now the owners. They are also the"management" you speak of. You keep trying to differentiate"management's" decisions from the unions, however in UAL case they areone in the same. The union was the major shareholder and had the mostvotes on the board and they agreed to whatever stipulations the ESOPspelled out, heck they designed it. Trying to rationalize blamesomewhere other than the union in this case is wrong. For all intensivepurposes the union and employees owned thier own airline.

bludevav8r said:
Have you read the RLA or do you understand how it works? Are you awareof the NMB and its role? Not just its "theoretical" role but the realrole that it plays in today's negotiations processes? And are you awareof how the RLA differs from the NLRA?

Yes I am fully aware of the Railway Labor Act and the NationalMediation Board, I know the history of the RLA and why it came about aswell. I am also aware of the collective bargaining involved and thestipulations and timeframes associated with it.
If you are going to tell me the RLA takes all the power away from theunion in the case of a labor dispute please refrain. I was not bornyesterday and you know just as well as everyone else here there are,for lack of better words, tactics the union employs to make thierpresence felt on a daily basis.
 
A long time ago, businesses abused employees shamelessly.

Justice and reason prevailed, and unions were born.

Then, the pendulum swung and the unions began to abuse their employers, and consequently, the shareholders or owners.

Justice and reason will ultimately prevail, and that is why unions are declining steeply in power. They were not wise or reasonable in the use of their power, and will pay the price.

It's over for the unions for the most part.
 
BluDevAv8r said:
Anjinoo,

... And are you aware of how the RLA differs from the NLRA?

-Neal

I asked him that in paragraph 2 of Post 2 - - don't confuse him with facts, OK?

:)
 
anjinoo7 said:
Here is my reference for the ownership stakeofUAL.Youmight be righthowever that that stake has changedsincethebankruptcyfiling butnone the less it was true up until it.

http://www.businessweek.com/2000/00_12/b3673128.htm

Oh yeah and another:
http://www.forbes.com/2003/03/05/cx_ld_0305esop.html
and another http://securities.stanford.edu/news-archive/2003/20030303_Headline08_Staff.htm
and another
http://slate.msn.com/id/2069362/

Try using Google sometime it's a great tool!:)

As far as the most profitable and and largest percentageofworkerswhoareunionized, please do tell. I wait with baited breathforyoutotell us all(please include references as I did).

anginoo7

My profile is correct, I'll assume the same about yours.Myinfocomesfrom being part of this business for 18 years. Whileyouweretakingmanagement 101, I was out dealing with the effectsofmanagerswhodidn't know what they were doing. I'm not going tospendtimesearchingfor a fact that I know to be true. I will tell youthatIread theunionization fact in a story that was linked to fromrighthereatflightinfo.com. If I truly thought that you were aseekerofknowledge,I might do the search. Unfortunately, I think thatyouarejust amanagement wanna-be troll.


SWA has the largest percentage of unionized workers. SWA isalsotheonlyprofitable major airline. SWA is also one ofthehighestpayingnarrowbody carriers in the world. Yes I LUV SWA andhopeto soonbehonored to be amongst their ranks.

I guess that it is possible that SWA's unionscouldturnagainstmanagement, but my observations tell me that unionstreattheboss in amirror image of the way the boss treats them. As longasthebosstreats his employees well, the employees willbehardworking,responsible, and efficient workers who willaccomplishtheirjobs with a positive, can-do attitude.

enigma
 
Last edited:
enigma said:
I guess that it's time to start browsing FI with IE:(

It would certainly make it easier to READ your posts!


:)



pssssst..... oh, and it's sepArately. ;)
 
Last edited:
Unionization of the airlines is tough to understand unless you are an airline employee. If you notice, at every airline employees have grouped together to bargain collectively, even "non union" carriers like Skywest.

The difference between being a pilot, or flight attendant, and other jobs is that as a flight crew member you are expected to be at the "office" as much as 400 hours a month. The Company has complete control over your schedule, can change your schedule and can require you to work when you would rather not be on the job.

So the quality of the majority of your life is at the whim of the Company. There has to be rules. For example, my airline used to "double bunk" on hotel rooms to save money. Without rules your airline could decide your day off is going to be on the other side of the planet, away from home. And of course there are the safety and sleep issues which were the genesis of the organised labor movement in the transportation industry. Pilots got tired of being pressured and flying being a death sentance....

There are also efficiencies in the collective bargaining process. My airline has around 1,700 pilots, one Chief Pilot, and 5 to 7 Assistants. There is no way you could manage that many employees with the traditional fashion with so little management structure. At my former ( non union ) employer we had a 4 to 1 ratio of employees to managers. At most airlines it is around 70 or 100 to 1 manager.

Having rules allows both the company and employee to have reasonable expectations. It provides incentives for good performace ( seniority ) and disincentives for problem children ( time off & firing ). Bottom line is that unions definately have problems, I am a supporter of a group actively suing my union over representational issues. But, there is no better way to run an airline. If you think of something that works, let us know.

~~~^~~~
 
The Southwest points is interesting and true. The big difference has been the ability of Southwest to create and so far maintain a different culture than the rest.

Secondly, they came up with a model from the beginning that has worked that was equally different than the rest which has provided success in good and bad times.

Good for Herb and the management group.

That said, they have not had to fight the problems inherent in the legacy carriers. The legacy carriers were out of control long before the end of regulation. Of all fo them, only Dick Crandall was able to transition to the deregulated environment and come through in relatively good shape. Eastern, Braniff, National, Pan Am, etc all died from not being able to adapt.

Unions have not killed these off nor have they been much help either. What they do is bog down the entity in rules, regulations, and costs that someone else may not have which enables them to kick your ass like Southwest has done.
 
Anjinoo7,

Unions are creations of capitalism. Companies got greedy and to protect themselves employees created unions. Your text book analysis is all good, but like so many have said not reality. We do not live in a truly capitalist society. For your theories to hold up we would have to get rid off:

1. Railway Labor Act
2. FAA and all its regulations
3. Bankrupcty laws that allow the government to give one company and unfair competitive advantage.

Then companies and employees would be subject to simple capital market forces. It sure would be interesting to see it happen, but we all know that these things are not going away. Your argument has no validity to it. It is straight out of a textbook and academia.
 

Latest resources

Back
Top