Organized Labor in U.S. Commercial

Organized Labor in U.S. Commercial Aviation

The Aviation and Transportation Security Act of 2001 endeavored to rationalize airline operations by keeping workers productive, flexible, motivated and accountable. But it was met with accusations of discrimination, retaliation, unfair actions, mandatory overtime and pressuring not to report labor problems. In the meantime, staffing has reached emergency levels in five key areas, labor issues have persisted, such as baggage meltdown, bankruptcies and the decrease in the number of mechanists drawn to the industry. Hope for improved conditions hinges on the advantages of technology, cost-cutting, extending retirement age from 60 to 65 and global cutbacks on oil prices.

The TSA

Staffing Emergency in Key Areas

Persisting Labor Issues

Extending Retirement Age

Attracting New Blood

The Advantages of Technology

Baggage Meltdown

Cost-Cutting Mostly in Labor

Bankruptcies and Optimism

History of Organized Labor

The ATSA

The Aviation and Transportation Security Act of 2001 authorized the head of the Transportation Security Administration to prevent baggage and passenger screening personnel from forming a union (the Colorado Springs Gazette, 2007). The simple objective was to insure that workers should remain "productive, flexible, motivated" and accountable. It viewed national security as far more important than manpower labor. These employees fought hard to unionize but failed repeatedly. They went as far as bringing their situation to the United Nations. The United Nations intervened and ruled that TSA employees should be granted collective bargaining rights. The American Federation of Government Employees, through its president John Gage, accused TSA of subjecting its employees of discrimination, retaliation, unfair actions, mandatory overtime and pressuring them from reporting problems. In cooperating with the Democratic Party, big labor has risen has wreaked destruction on America's heavy industries and manufacturing. While over-regulating, it has reduced worker productivity and increased production costs. Observers expressed fear about travel disruptions should TSA personnel go on strike. Overall inefficiency would most likely result from the spread of such work ethic (the Colorado Springs Gazette).

Staffing Emergency in 5 Key Areas

National Air Traffic Controllers Association or NATCA and General Accountability Office or GAO declared a "staffing emergency" in Atlanta, Chicago, New York and Southern California (Air Safety Week, 2008). The emergency emanated from a10% decrease in workforce in 2007, new losses in 2008 and increased stress and fatigue among their personnel. NATCA president Patrick Forrey pointed to the lack of experienced personnel to handle the volume of air traffic and at major airports. The Association projected the retirement of 500 controllers last February and 2,200 more by the end of 2008. Successive waves of retirement indicated the lack of incentive and motivation to stay on the job. This trend would nullify the projected 695 retirements made by the Federal Aviation Administration this year and the 856 retirements projected in the previous year. Forey commented that the increasing number of retirees would further reduce the only depleted workforce just when air travel became more congested (Air Safety Week).

GAO, for its part, said that an adequate number of well-trained controllers were needed in the towers and radar facilities to avoid aviation accidents in the air and on the ground (Air Safety Week, 2008). NATCA's president urged the FAA and the Department of Transportation to do something about the situation, especially in the four key areas mentioned. NATCA said the situation was worst among its ranks and had resulted in many runway and airspace accidents in the past weeks and months. The spokeswoman for FAA, however, contended that the figures provided by NATCA were inaccurate. She said that the FAA and the union had been in conflict since September 2006 when the FAA declared an impasse in contract negotiations with NATCA. There was action also occurring at the United Airlines' ranks. The Teamsters' union was up against the sale of the San Francisco aircraft maintenance operation. The union's mechanics claimed outsourcing maintenance could work against aviation safety. It said that the airline recently out-sources the heavy maintenance of Boeing 747 and 777 to South Korea and China. Those in the Beijing repair stations, only five of the 2,179 mechanics employed were certified by the FAA. And elsewhere, the leader-representatives of labor unions recently held a three-day summit to draft an overall strategy at gaining advantage in contract negotiations. These groups were the Association of Flight Attendants, the Association of Professional Flight Attendants, the International Association of Machinists and the Transport Workers Union. The coalition aimed at raising industry standards for wages, retirement, health care, benefits and working conditions for flight attendants and retirees. The members bewailed sacrificing pay, benefits and working conditions because of continuous bankruptcies, restructurings, lay-offs and liquidations (Air Safety Week).

A wave of 46,000 AFA flight attendants in 18 airlines was expected to resume contract negotiations with their employers (Air Safety Week, 2008). These would be 19,000 APFA members at American Airlines, 9,000 TWU members at Southwest Airlines and 12,000 IAM members at the Continental, ExpressJet and Micronesia Airlines. AFA president Patricia Friend happily announced the funding of a comprehensive research project for the coalition's concerns. She stressed the importance of attendant fatigue as a persisting problem in the industry, which continued to affect their ability to provide important safety and security services and measures. The previous year, the Senate Transportation Appropriations Committee funded a research project on flight attendant fatigue. FAA reported that flight attendants frequently suffer from the consequences of fatigue and that fatigue should be further evaluated (Air Safety Week).

Industrial sociologist Arthur B. Shostak was the country's foremost expert on the strike conducted by members of the Professional Air Traffic Controllers Organization or PATCO on August 3, 1981 event (Business Editors, 2001). Those 11,345 members were consequently fired from their jobs by President Ronald Reagan. PATCO was dissolved and then replaced by the NATCO, which has had harmonious dealings with the FAA. Problems, however, began arising in the areas of staffing, training, equipment, working conditions and salaries. A new and most disturbing issue was the threat of privatization of air traffic controllers. On the 20th anniversary of the termination of the PATCO members and the dissolution of the union, Shostak called attention to the objectives fought for by PATCO employees as similar to those of upheld by NATCO today. These were to hasten re-employment, establish progressive relations between labor and management, junk calls for privatization and upgrade the system. Shostak also recalled that the PATCO strike was the most talked-about, costliest and relevant labor-management conflict in history to this time (Business Editors).

Persisting Labor Issues

Today's picture is not too distant from that of the past. Labor issues were behind the persistent flight delays and cancellations troubling Denver International Airport in recent times (Saint, 2000). This was the opinion of industry consultants, such as Michael Boyd, when Denver Mayor Wellington Webb asked Transportation Secretary Rodney Slater to intervene. Boyd commented that those labor issues had to be addressed. These issues were mainly an outdated air traffic control system and the pending merger with U.S. Airways. The outdated air traffic control system led to a 35% increase in mechanical failures in the past year. United Airlines is the largest carrier in the world. It runs 75% of the flights through the Denver International Airport and the delays have affected the passengers. The airline is presently negotiating contracts with unions. These unions consist of pilots, machinists and ground crew. Airline officials said that many of the workers have refused to work overtime or do extra work. In Boyd's opinion, United was unable to manage the issues effectively. He was not optimistic that these would be solved by the merger between the Department of Justice and the shareholders of the U.S. Airways (Saint).

Extending Retirement Age

An FAA Committee was organized to study the feasibility of raising retirement age from 60 to 65 for commercial pilots (AirGuide Online, 2006; Deseret News, 2006). It is composed of labor, airline and medical experts who will recommend whether or not one of two pilots on the flight deck to be over 60 years old (AirGuide Online). According to the FAA, this change would be in accordance with the ruling of the International Civil Aviation Organization or ICAO. The ICAO raised the international standard to 65 on November 23, 2006. The Air Line Pilots Association opposed a change in the current mandatory retirement age for reasons of safety. Current international standards allow pilots older than 60 to fly into the U.S. As co-pilots. When the changes take effect, these over-60 pilots will be allowed, as long as they are accompanied by a co-pilot who is below 60 and pass medical tests every six months (Deseret News).

Attracting New Blood

The fast-decreasing workforce in the aviation industry is largely the consequence of many mechanics moving to other and more promising careers (Business Writers, 2003). The industry's outsourcing and labor-saving strategies have discouraged new mechanics from entering, according to analysts. The North American Commercial and Military Aircraft and Engine Maintenance, Repair and Overhaul Markets group projected that the industry's revenue of $11.67 billion in 2002 to reach $13.43 in 2009. Yet current airframe and power plant mechanics are inclined to move to the computer and automotive sector for better work environment. Analysts advised the creation and use of informational recruiting tools to attract these potential workers. in-house training programs on long-term career growth and a sense of commitment to the company would be one form. Another could be employee-retention programs on leadership, technical, and management training courses. Other tools and strategies could be flexi-time, relocation benefits and an improved work environment. Recent mergers and consolidations within the industry are meant to retain employees and serve a wide range of customers. The technology-driven industry requires mechanics with the necessary technological competence in order to provide the wide range of services required by customers. A resourceful information management system could integrate e-business tools and advanced technology into standard business practices. This integration would bring about more efficient and cost-effective solutions to current problems (Business Writers).

The Advantages of Technology

The world's airlines should take advantage of innovative technologies to connect with their customers, achieve desired revenues and solve industry problems (USA Today, 2003). Chairman Nawal Taneja of the Department of Aerospace Engineering and Aviation at the Ohio State University emphasized the role of technology in generating large profits for the airline industry. He noted that air travel earns billions of dollars every year but makes a profit margin of only 1%. He attributes the situation to the reality of different problems in the industry, such as high labor costs, different seasonal demands and weather conditions. Taneja suggested focusing on one unique service, avoiding destructive competition, the use of technology and check-in automated machines, sharing an interface with competitors, and establishing a brand identity. Airlines can and should choose their customers and come after them - again through technology (USA Today).

Baggage Meltdown"

Mishandled baggage or "baggage meltdown" is a major consequence of increased air traffic when accompanied by a shortage in security screeners (Levin, 2006). Statistics showed that loss or mishandling of baggage from 2004 to 2005 went up by 23% because of manpower and financial shortages in big carriers, such as U.S. Airways. Stricter security measures made the situation worse. Airport managers had to hire laborers to assist TSA screeners with non-security tasks. Policy director Stephen Van Beek of the Airports Council International said that tight staffing delayed baggage handling, especially during peak seasons. TSA reported a 24% turnover workforce rate and 10% of its workers received compensation. It planned to hire more part-time screeners for peak hours. The Department of Transportation said that 3.6 million mishandled bags in 2005 or 6.04 per 1,000 passengers. This represented a 4.91% per 1,000 in 2004. The figures tend to increase as flights fill up or as the airline undergoes financial straits (Levin).

Cost-Cutting Mostly in Labor set of unexpected and unprecedented problem situations since 1998 has been reshaping the aviation industry and the demand for air travel (U.S. GAO, 2004). The decrease in business travel and the New York attacks chopped off substantial operating revenues for many airlines. Since its deregulation 30 years ago, these problem situations and challenges developed from internal restructuring within the industry and from external factors, which today influence the demand for air travel. Internally, the internet has been a powerful market force. Tickets are now viewed and sold online. Other challenges were the New York attacks, the war in Iraq and the national security issue, SARS, economic brunt and the substantial decrease in business travel (U.S. GAO).

Bankruptcies and Optimism

The Aviation Committee reported that the airline industry was losing its "last dime" with the bankruptcy of United Airlines and the U.S. Airways (American Bar Association, 2003). The companies registered a combined loss of $11.2 billion in 2002. Many other major airlines were also thinking of filing for bankruptcy protection. The trend led to a loss of jobs for 100,000 airline employees and many others in aviation-related industries. A second Gulf War also loomed and added to the distresses. However, some sectors have remained optimistic that the industry would survive. One reason was that air transportation has not been thoroughly overtaken by technology or other modes of travel. It has remained a significant part of the national infrastructure. Optimists also believed there would be survivors in this catastrophe. These survivors would eventually reap and enjoy the benefits of the present situation. And as a blessing in disguise, it would bring about the much-needed fundamental reform of the labor cost structure of the industry. Optimism lies in this turn of events, which is the major source of hope in the future of the industry (American Bar Association).

The president and chief executive officer of the Air Transport Association shared the optimism of these observers. James May predicted a "reasonably positive fourth quarter" in 2008 when the economic picture would improve and even operate "in the black" in 2009 (CNN 2008). Measures undertaken by severely afflicted commercial airlines appeared capable of withstanding the pangs of the current economic troubles. He saw the companies as rising from the travails of high cost of jet fuel with the decrease of oil prices. These measures would include charging passengers for checked bags and other services previously extended for free and cutbacks on scheduled flights. The ATA president attributed the capability to industry preparedness. He, however, saw the industry as wading through the red in the third quarter. The worst hit was U.S. Airways with a loss of $865 million to high fuel cost, higher than that of United Airlines' $779 million drain. He also foresaw continued and substantial consolidations among European airlines. He could likewise see more alliances between American and European airlines, such as that between AMR Corporation's American Airlines and British Airways (CNN).