Could this be a summer of unrest at the nation's airlines? Last year, the U.S. airline industry turned a profit for the first time in five years. Now, thousands of union workers who gave up wages, benefits, and pensions during the industry's recession say it's pay-back time.
Today, at United Airlines' annual meeting hundreds of pilots, flight attendants, and mechanics showed up to say they want some of their wages restored.
When the airline industry went into a tailspin following the 9/11 terrorist attacks, airlines worked aggressively to cut costs. US Airways, United, Delta, and Northwest Airlines all filed for bankruptcy reorganization. As part of their efforts to reorganize and remain solvent, both white collar and hourly workers agreed to massive pay and benefit cuts. Some United pilots say their pay was cut almost in half.
It was a bitter pill for many workers to swallow. And the bitterness hasn't gone away, especially now that some executives are receiving bonuses and pay hikes. American Airlines recently awarded $171 million in stock bonuses to 200 executives. Northwest Airlines President & CEO Doug Steenland recently received a bonus worth $26 million. And, United Airlines Chairman & CEO Glen Tilton received a bonus valued at just under $40 million.
Unfortunately, the unions may have a difficult time getting the carriers to open up the company coffers to them. In the case of United, the wage and benefit cuts the unions negotiated with the company run three more years. Federal labor laws aren't in the workers' favor. They don't require management to sign a new contract until the old one expires.
It could be argued that some of these carriers might not have survived the last recession, and in some cases bankruptcy, had it not been for good managers.
That is why those executives are now being handsomely compensated. But, the unions argue that their members were flying the planes, fixing them, and addressing the needs of passengers during that time, so they are deserving as well.
What are your thoughts? Is it fair for the airlines to reward management, but not labor?
