Unions, Airlines and Economics

[Publishers]

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.

 

[chawbein]

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.

 

[RW/FW Ex-Army W]

A couple of quick notes. TonyC, ya da man bro!

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.

 

[SDF2BUF2MCO]

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.

 

[pilotyip]

"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.

 

[anjinoo7]

Wow,

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

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.

 

[enigma]

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

 

[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

 

[check six]

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

 

[anjinoo7]

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).