BUMPY SKIES
December 21, 2000

The troubled airline industry battles its employees.

 

Sept. 11, 2000: The search for skilled airline mechanics July 26, 2000: A report on the crash of the Concorde. July 19, 2000: A summer of delays and cancellations. May 24, 2000: United Airlines and U.S. Airways announce a merger. March 22, 2000: The impact of the Boeing strike. Feb. 14, 2000: An update on the Alaska Air Flight 261 investigation Feb. 1, 2000: An Online NewsHour report on the Alaska Air crash. Nov. 19, 1999: The Egyptian Air Crash investigation Oct. 26, 1999: Jet carrying golfer Payne Stewart crashes Sept. 1, 1999: The FAA addresses airline delays. Sept. 1, 1999: A discussion with two experts about flight delays. Aug. 19, 1999: Hazardous carry-on baggage. Feb. 15, 1999: American Airlines pilots stage a "sick-out." Dec. 29, 1998: A report on the layoffs at Boeing in Seattle. Sept. 7, 1998: The crash of SwissAir 111. Sept. 1, 1998: Pilots for Northwest Airlines continue a strike that has grounded 1700 daily flights. Feb. 13, 1997: American Airlines pilots threaten a strike. Browse the NewsHour's coverage of transportation     Federal Aviation Administration National Transportation Safety Board United Airlines Delta Airlines	TOM BEARDEN: For a lot of people, air travel has become a nightmare. It started last summer, when the nation's largest airline, United, delayed or canceled thousands of flights. Hundreds of thousands of people fumed as they missed their connections and their business meetings, or spent parts of their vacation stranded in airports.
	Passenger unrest
	PASSENGER: Canceled in Milwaukee, no explanation. Bussed up here by limo, canceled here, going to Tampa. We don't know where we're at. TOM BEARDEN: At first, airline executives blamed the weather, and the creaky air traffic control system. But, ultimately, they accused their own pilots of throwing the schedule into chaos, by refusing to work overtime, in order to force management to renegotiate their contract. Eventually, United gave the pilots a more than 30 percent raise, bringing their salaries to the highest in the industry. Northwestern University Professor Aaron Gellman, says the deal did more than temporarily restore United's schedule; it marked a turning point for the entire industry. AARON GELLMAN: It's now set off demands all over the industry for higher wages for pilots, for machinists, and for counter personnel, for flight attendants, for everybody. So it's probably the most significant financial, labor financial event in airline history. TERENCE SMITH: Indeed, since July, United has been in on again, off again contract negotiations with the International Association of Machinists, who represent the airlines' mechanics, ramp workers and customer service representatives. United declined to talk to us on camera, but has publicly accused the IAM of staging a new slowdown, thereby forcing another round of cancellations. The union's general vice president for transportation, Robert Roach, vehemently denies the charge. ROBERT ROACH, JR.: I don't believe that the employees or members are involved in any type of an action that would result in delays or cancellation of flights. United Airlines did take us to court, and received a temporary restraining order. That temporary restraining order has been lifted as of December 7, and we do not encourage, condone, or participate, in any sort of job action. TOM BEARDEN: So it's only coincidence that there's negotiations going on at the same time these flights are being canceled at an unusually high rate? ROBERT ROACH, JR.: Well, I would say, I don't know if it's coincidence or not, but I know that we're not involved in any particular job actions relating to negotiations.
	Blaming pilots
	TOM BEARDEN: The disruptions have cost the airline hundreds of millions of dollars in lost revenue and untold damage to customer relations. Yet the pilots and the machinists own 55 percent of United's stock. AARON GELLMAN: Why do they want to hurt the company they have such enormous interest in? Are they so highly valuing new term income in cash for building net worth with a successful airline equity? It's hard to understand. It really is. TOM BEARDEN: The unions say one reason is that employees made enormous financial sacrifices when the airlines were losing a lot of money in the '80s and early '90s. At United, employees took wage cuts in exchange for stock, the largest employee stock ownership ever attempted. Now Roach says it's payback time. ROBERT ROACH, JR.: For six years, our members and other employees of United Airlines worked under scale. What we want to do is work at the top of the scale. I think that's very fair when you're taking pay cuts, you've liberalized work rules, you've done a number of things so this carrier can be what it is today, I think it's only fair that we work at the top of the scale. That's all they're asking for. They're not asking to be paid exorbitant amount of money that's going to make the carrier bankrupt. They don't want that, they own the airline. TOM BEARDEN: Jerry Glass is an airline management consultant. JERRY GLASS: The airline industry has had, generally speaking, a sustained period of strong profits. And what happens is, the carriers put out these press releases that say record profits this quarter, annual record profits. Employees read that information and they see that the airlines are doing well, and they obviously want a piece of that pie. What is happening, though, and one of the reasons why we're in such conflict right now, is the demands are really more than the carriers can afford in terms of their sustained profitability. TOM BEARDEN: Predictions that other airline labor groups would follow United's lead quickly came true. Delta airlines management has accused its pilots of staging a slowdown, and was forced to cancel hundreds of flights earlier this month. Captain Andrew Deane is a spokesman for the Delta unit of ALPA, the Airline Pilots Association. He denies the pilots are staging an organized slow down, and says instead that management has tried to blame some of its operational problems on the pilots. He cited the first three days of December as an example. ANDREW DEANE: We had 350 cancellations according to Delta's numbers, for lack of crew availability. When we called up the information that we had available to us, it indicated that approximately 258 were for lack of crew, so there was nearly a hundred flight differential between what the company's numbers said and what the numbers that we got indicated. TOM BEARDEN: That's a pretty serious charge. ANDREW DEANE: Well, the company can determine and put down whatever they want for the reason the flight cancels. As I said, we began to receive quite a few phone calls from crews, who were out on trips, asking, "What's going on here? I was just canceled. I understand it was for lack of crew availability. We're here, the airplane's here. What's happening?" TOM BEARDEN: Delta declined our request for an on camera interview. In a written response, the airline said "Prior to the onset of this job action, our average number of cancellations due to lack of pilot availability, was two per day. Was Mr. Deane suggesting that the 258 cancellations he cited representing some 25,000 disrupted passengers is acceptable to the Airline Pilots Association?" Deane says many pilots are frustrated with Delta, and the fact that their salaries are no longer industry leading.
	Holiday chaos?
	ANDREW DEANE: Management at Delta Airlines had no problem with taking large bonuses during the four years of their economic success, and we feel that our numbers are in line with what the corporation can afford. And we in no way feel that this jeopardizes the corporate viability in the long run. AARON GELLMAN: I think Delta is just the next apple on the tree to fall. I think all the pilots' unions will look at it the same way, they want not only the industry-leading contract, or at least equal to the industry-leading contract, and that's a big burden on the airlines that they don't seem to be reasonably think is a fair one. But what can they do? As one airline executive said to me the other day, he gave away the store. TOM BEARDEN: Some consumers are concerned all this will lead to chaos during the holiday season. Glass thinks the longer-term fallout for passengers may come with sticker shock. JERRY GLASS: We've already seen United institute I believe it was a $100 or $200 increase in business fares after their pilot agreement was ratified. Clearly, they expect higher wages with the machinist union, and the flight attendants are demanding that their contract be renegotiated, so there's no question that in combination with the fuel prices, ticket prices are going to have to go up. TOM BEARDEN: The airline labor confrontation is far from over. United Flight attendants conducted informational picketing at airports during thanksgiving, and plan to do so again over the Christmas holidays. And at Delta, pilots are looking toward an April negotiating deadline and planning for self-help, if they haven't reached a settlement. Self-help means a strike.