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Airline Labor Relations

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Nick Gutierrez

on 1 October 2014

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Transcript of Airline Labor Relations

Airline Labor Relations
Airlines and the Railway Labor Act (RLA)
The RLA regulates labor relations in the airline and railroad industries only
Passed on May 20, 1926
Air Line Pilots Association lobbied to bring airlines under the RLA and this was completed on April 10, 1936
Airline Labor Unions
Craft Unions
Management vs Labor
The relationship between airlines and their labor unions is often strained
New entrant carriers with lower unit costs put pressure on established carriers to reduce costs
Fuel, labor and maintenance are the three main costs of airlines, and labor is the one area an airline has the most control over
Airlines tend to look at labor first, when it comes to reducing costs
Established carriers have senior employees making top-of-scale wages
Antiquated contract rules prevent established carriers from cross-utilization
Some hold broad certification and represent numerous carriers
Transport Workers Union
Air Line Pilots Association
International Association of Machinists and Aerospace Workers
Work force is highly skilled and specialized
No single union represents an airlines' entire labor force
Pilots, flight attendants, ground workers, and mechanics are all represented by different unions.
Over 300,000 airline industry employees are members of unions
Approximate number of airline employees as of July 2014
Different unions within the industry
Craft unions are not always beneficial. If one of the single craft unions goes on strike, the airline is forced to suspend operations.
Railroads, a heavily unionized industry, experienced widespread strikes in the late 1800s and early 1900s. These strikes seriously affected the economy and had a negative impact on the infrastructure of the country. The act was eventually passed as a way for unions and companies to settle labor disputes without an interruption of service, which disturbs the flow of commerce. These same concerns are main reasons why airlines were eventually placed under the RLA.
Employees have right to form and join a union
Union and company have right to bargain collectively
Union and company will negotiate in good faith and carryout agreement
Employee has right to process grievances
Prompt settlements of labor disputes will prevent interruption of service
Nick Gutierrez

Embry-Riddle Aeronautical University
1. Collective Bargaining - settlement of disputes is done solely by the company and the union.
2. National Mediation Board (NMB) - NMB assigns mediator to assist with settling disputes.
3. Voluntary Arbitration - After the NMB has failed, arbitration is legally binding if chosen.
4. Emergency Board - assembled by president in hopes public opinion of dispute will cause parties to accept an agreement.
President can request emergency legislation from Congress in order to prevent a strike and disruption of commerce.
Airline Unions in the News
Union members at some airlines have become part of lay-offs, two-tier pay systems, and outsourcing
Labor concessions help reduce costs but upset employees
Unions question management actions and resist concessions
Labor unions resist increasing the amount of part-time workers
Some airlines use subsidiary carriers as a way to reduce labor costs
Airline unions need to be careful in their negotiations
After not agreeing to concessions in 2005, Alaska Airlines locked out 475 ramp agents. The airline cited high fuel costs, competition from low cost carriers, and the need to reduce costs as reasons for the decision.
The 475 ramp agents were replaced overnight by Menzies Aviation.
After this, many airline employees realized that, even with a union, they are never completely safe from losing their job to someone who can do it cheaper.
Even with a large unionized work force, airlines can
still be profitable. 83% of Southwest Airlines employees are unionized and the company has had 41 years of consecutive profitability.
Positive attitudes and employee morale at the company can be attributed to exemplary labor-management relations throughout the airlines' history.
Labor contracts and seniority integration have to be agreed upon during airline consolidations.
US Airways and American Airlines flight attendants have already agreed on a new contract.
The Allied Pilots Association (APA) has been selected to represent the pilots of both airlines.
Customer service agents at American have voted to unionize, with representation from the Communication Workers of America (CWA), the current union for US Airways customer service agents.
Frontier ramp agents in Denver voted for union representation from the Transport Workers Union (TWU), seeking greater job security and a voice for employee benefits.
The airline has farmed out ramp work to third-party vendors in every station except Denver.
Southwest is currently negotiating seven different contracts.
Known for having historically positive labor - management relations, the company has recently hit a rough road in its current negotiations. The airline is trying to maintain a cost advantage it has over other major carriers by proposing contracts with changes to the amount of part-time workers, changes in sick time and new items like performance based bonuses. In negotiations with the union representing Ramp, Operations, Provisioning, and Cargo employees, the National Mediation Board has suspended mediation talks because the discussions became unproductive. "The parties obviously have differing views of where they are in relation to their peers and competitors" - NMB.

The current state of contract negotiations and Southwest's subpar on-time performance of the past year has negatively affected the morale of some front-line employees. Tensions between labor and management are high as employees question the delay in contracts and the timing of a new livery. With the launch of international service, expiration of the Wright Amendment, completion of the AirTran integration, as well as the new livery, hopefully Southwest can soon add union contract ratifications to this list of monumental items. Agreements that are rewarding for both the employees and the company will help Southwest maintain its reputation of exemplary labor-management relations.
Ahles, A. (2014)
Sky Talk: Government regulators certify APA as the union for all pilots at American
and US Airways.
Retrieved from http://blogs.star-telegram.com/sky_talk/allied_pilots_association/

Alaska Airlines (2005).
Alaska Airlines contracts with Menzies Aviation for Seattle ramp services.
Retrieved from http://splash.alaskasworld.com/Newsroom/ASNews/ASstories/AS_20050513_031258.asp

Bachman, J. (2014).
Southwest CEO's cost crusade: haggling with unions while profits soar. Business
Retrieved from http://www.businessweek.com/articles/2014-09-17/southwest-airlines-plan-to-keep-costs-low-saying-no-to-pay-raises

Bureau of Transportation Statistics (2014).
Airline employee data by month.
Retrieved from http://

Painter, K. (2014).
Frontier Airlines ramp workers vote for TWU union representation. Denver Post.

Retrieved from http://www.denverpost.com/business/ci_26125901/frontier-airlines-ramp-workers-vote-twu-union-representation

Wensveen, J. (2011). Airline Labor Relations. In
Air Transportation: A management perspective
ed.). Farnham, England: Ashgate.
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