Hackman said:
I believed US Air was first to bend over too, but I recently found out it was Airtran, right after 9-11.
Of course if you want to talk about the all time concession kings, that would be the twu at AA, who have continuously given concessions since 1983 on every contract they have "negotiated".
With the latest 2003 sellout being the bottom that all carriers are now trying to beat. :down:
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The AirTran concessions were insignificant, it was the USAIR concessions that really started the ball rolling.
If you recall the mechanics were the only group that voted NO. The company said they needed the concessions to avoid BK and promised that they would not come back for more. After the mechanics voted NO the IAM put tremendous pressure on the mechanics to vote Yes in a revote.
Shortly after the revote and passage of the concessions USAIR went BK and asked for more concessions.
A year later UAL was singing the same song to its employees, concessions or BK. The mechanics were once again the only group that voted NO. UAL eventually got what they wanted and went BK anyway.
Then AA statred singing the same tune. But instead of small concessions AA went stright to a 25% cut in compensation plus millions in rule changes. In one fell swoop, without going BK they got more concessions than any other carrier.
The fact is that USAIR and UAL were simply trying to match AAs pre 2003 costs. The TWU had been giving AMR concessions for twenty years. The TWU specialized in fragmenting its membership and creating all sorts of low labor cost options for AMR including 12 year progressions, SRPs, OSMs, Jr Fleet Service Clerks, part timers, employee paid medical and prefunding etc. So while the TWU would claim that their topped out workers had the same wage as other union workers the fact is that the TWU contract was much cheaper averaged out per employee than even non-union carriers like Delta.
In the meantime NWA kept making money. However fearing that they were going to be left out of the feeding frenzy on labor they started to lose money and look to their enployees for concessions too. Once again the mechanics are resisting. Once again they stand alone, so far.
The fact is that airline workers have been suckered. All of us. Look at the flights, they are full. Cheap fares may be part of the reason but as the NYTimes revealed the airlines only needed to charge a little more and they could have broke even. Fares still would have been cheap.
Lets look at what is going on here. The planes are full, yet the airlines claim they cant make a profit.
Every time a passenger buys a ticket they pay departure tax. So the government is doing very well despite the airlines losses.
Every full flight burns that much more fuel. So the fuel companies are doing very well despite the airlines losses.
All these passengers are are keeping all these airplanes very busy, logging more and more flight hours. So the banks or other financial institutions that lease the aircraft are doing well despite the airlines losses.
As the airplanes fly they use up parts and other goods. So the suppliers are doing well despite the airlines losses.
Lets not forget the tourist industry that benifits because cheap airfares leave tourists more cash to spend on their vacation.
Men like Howard Hughs, CR Smith etc are history. Todays Airline CEOs come from places like Hallmark Cards. They have no particular interest in the airlines. Most of the airlines are "Institutionally owned". For instance AMR is 97% Institutionally owned. Its a fair guess that these Institutions have many other investments, and many likely benifit from cheap airtravel especially if they own Airport bonds(landing fees), shares in oil companies (fuel), airplanes (leases) etc. Look at GE over at USAIR. AS long as USAIR keeps paying the lease and the employees keep working for less GE keeps collecting on their leases, thats why despite three years in BK they still are flying.
The fact is that everyone EXCEPT the airlines is doing a booming business.
As long as we keep giving they keep raking in the bucks. However if we all should simply stop showing up for work then all the cash flow stops. They stop pumping the jet fuel, no more landing fees are paid, departure tax revenue stops, Hotels and tourist spots sit empty and people spend less money.
These Institutions that own the airlines might have more of an incentive to see the airlines lose money than make money. The airlines are very labor intensive and if the airlines make money the workers will want more. Thats not the case with the leases. How many employees does it take to monitor leases? If they go on strike so what? If the airline employees demand more money then there will be less to go for leases, fuel etc. So as long as the planes are flying the airline is generating wealth for someone. However when we stop flying the wealth generation of everyone connected to the airlines stops. So despite the "financial condition" of the airline industry it is still labor intensive so if labor stands together we still have stregnth. If we all walked out the economy would be severely impacted and there is no way they could replace us all.
The fact is that we all have failed, except some of the workers at NWA. We owe the workers of NWA an apology for what we have done to our professions. The question is will this vicious cycle continue or will the workers at NWA put a stop to it.
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