Airline execs and union leaders ponder rough decade
10:26 PM CDT on Friday, April 30, 2010
By TERRY MAXON / The Dallas Morning News firstname.lastname@example.org
PHOENIX – American Airlines Inc. executive Jeff Brundage refers to it as "the lost decade."
The past 10 years, particularly after the Sept. 11, 2001, terrorist attacks, resembled the usual airline up-and-down cycles only for the downward part.
Now, airlines and their employee unions are struggling with contract negotiations while still awaiting evidence that airlines – many of which went through restructurings earlier this decade – are really in an up cycle.
"You can understand where the employees are coming from," Tom Kassin, an attorney who focuses on airline labor and employment issues, said Friday. "They made very real and painful sacrifices in the restructurings that took place.
"All the parties in good faith in those negotiations viewed that restructuring was necessary, but also that better times were ahead and the future would bring better times," said Kassin, speaking at the annual Phoenix International Aviation Symposium.
"Well, the future is now, and it's not exactly what everybody was looking for."
Brundage, American's senior vice president for human resources, said the decade was shaping up as a somewhat normal cycle after the restructurings at many airlines in the years after the terrorist attacks.
Still in the midst
In 2006, it looked like the up cycle was about to begin. But in 2008, fuel prices soared, and in 2008-09, the world dealt with a serious recession.
"I would argue that we are still squarely in the midst of restructuring, seven or eight years later," Brundage said.
The difference of opinion now is whether "it's a market reset," like airlines believe, or simply an atypical cycle in which the up cycle is taking longer to arrive, said Brundage, who sat on a symposium panel that discussed airline labor issues.
Among those labor leaders having to deal with those questions is John Conley, whose Transport Workers Union has been negotiating for nearly 2 ½ years with American. The TWU granted deep concessions in 2003 to keep American out of bankruptcy but is having a hard time getting any of those cuts back in talks with the carrier.
"In 2003, when we did the restructuring, I never envisioned that we'd be sitting here in 2010 and not have some upside in terms of having the ability to generate consistent profit," said Conley, another panel member. "That's been extremely elusive."
American has negotiations under way with all three major unions – the TWU, the Association of Professional Flight Attendants and the Allied Pilots Association – and all are aided by the National Mediation Board.
Panelists on Friday's session acknowledged that mediators are overwhelmed as dozens of airline unions have opened up talks to modify the concessionary deals forced on them in the 2002-05 period.
Air Line Pilots Association president John Prater, whose union represents pilots at 18 airlines currently in talks, said the NMB is now more labor-friendly than during George W. Bush's administration. But something must be done to pressure management and unions to shorten the time it takes to reach agreements.
"We need to do better," Prater said. "We need to close these contracts."
Among the airlines with open contracts is United Airlines Inc. Its senior vice president for labor relations, Doug McKeen, voiced a concern beyond getting labor deals.
'Sense of pride'
"It's how do we get our employees back to a point where they feel a sense of pride in where they work? It's something we all aspire to. Collective agreements and good relationships with labor matter," McKeen said. "But we want our employees to have pride in what they do, and it's difficult to see that today."
Agreed Prater, "Morale and pride are important."
But he added: "Some of it has been destroyed. It's been a tough, tough decade."