United seeks rule relief
Contract restrictions add needless costs, airline tells court
By Ann Imse, Rocky Mountain News
December 14, 2002
When a veteran Southwest Airlines pilot retires, one pilot is promoted and a new one is hired and trained.
When a veteran 747 pilot retires from United Airlines, eight to 12 pilots may be pulled off flight duty for four to six weeks of expensive retraining on different jets, says Kit Darby, president of Aviation Information Resources Inc., an airline pilot career information service in Atlanta.
That's because United has five different types of planes to Southwest's one, and United pays pilots more for flying larger planes.
So when someone at the top of the line leaves, a flock of pilots can move up a notch - but most must be retrained to fly another type of jet.
If United replaces a long-haul 747 with a more efficient 777, then 32 pilots normally assigned to it must be retrained, Darby said.
And each one of those 32 could cause another eight to 12 pilots to change jobs. So a move made in the name of efficiency could result in hundreds of pilots being pulled off regular duty for retraining.
These are the types of work rules that boost United's total costs per mile to nearly double Southwest's, according to figures in documents filed by United in bankruptcy court this week.
Over the past decade, low-cost airlines such as Southwest have gone from a "nuisance" to a major force in the industry, the filing says. Today, 70 percent of United's passengers have the option of a low-cost airline, and United must compete, the documents say.
Filing for Chapter 11 protection in bankruptcy court this week gave the airline the ability to cancel its union contracts, where many of these work rules are enshrined.
The airline said bluntly in court documents that "these proceedings will have to address United's collective bargaining agreements," and they must do so immediately to meet lenders' demands.
Banks that gave United enough cash to fly while reorganizing have threatened to ground it and liquidate it if massive cost cuts are not made within several months, according to court documents.
That means painful wage cuts, but also a sea change in the way United operates.
United CEO Glenn Tilton even told reporters at Denver International Airport this week, "It is unfortunate how often people focus on wages.
"The issue of productivity is much more important."
The pilots union declined comment and the mechanics union could not be reached.
Aiming at work rules
The airline gave the first hint of what it considers the most crippling work rules in documents filed in bankruptcy court this week.
Foremost, United took aim at a series of rules in its pilots' contract that limit its ability to fly regional jets - smaller planes it can fly on short routes for 52 percent less than the larger Boeings and Airbuses.
United must "resize and redeploy its fleet - adding both 50- and 70-seat regional jets and grounding some larger aircraft," United consultant Daniel M. Kasper said in an affidavit filed with the court.
Work rules now bar United from flying 70-seat regional jets, and limit it to just 65 regional jets of other sizes, the court documents said.
United's smallest aircraft now are Boeing 737s, with more than 100 seats, though United Express carriers fly 125 regional jets as well as larger BAE-146s and turboprops.
Neither United nor the pilots union spokesman was certain whether the court documents referred to limits on United or on United Express.
Regional jets are narrower, typically with two to four seats across, and may have less headroom.
United says in court documents that its strength is its enormous network of flights, connecting 13,000 city pairs. Adding one city adds traffic to every other city, and United wants to retain that strategy.
But many smaller routes - such as Denver to Moline, Ill. - are money-losers with a Boeing 737, but profitable using regional jets, the filing says.
"United's use of regional jets allows United to compete profitably in short-haul markets with Southwest and other low-cost carriers," the filing says.
Now, most of the regionals must fly from small towns to hubs like Denver. The documents indicate United wants to use them on point-to-point routes between smaller cities, and between hubs.
The provisions in the pilots' contract limiting the numbers, size and routes of regional jets are designed to preserve pilot jobs on larger aircraft, which currently mean fatter paychecks.
The court filings don't discuss United's system of paying more for flying larger planes, or say the airline wants to change it. But that's a key reason pilots have opposed the smaller jets, Darby said.
At America West and UPS, pilot salaries don't change with the type of plane, Darby said. United could consider paying pilots the same rate for all planes, but then the issue becomes, "Would you want to pay the same salary to a pilot flying 35 passengers as one flying 400?" he said. Traditionally, the small planes are flown by less-experienced pilots who are paid less, he noted.
Layoff limits
The court filings also take issue with limits on furloughing pilots and members of the Machinists union. The pilots' contract prohibits layoffs for "any economic or financial considerations, including, but not limited to, the price of fuel, aircraft or other supplies, the cost of labor, the level of revenues, the state of the economy, the financial state of the company, or the relative profitability or unprofitability of the company's then-current operations," according to the filing.
Nevertheless, United says it has cut 841 pilots since Sept. 11, 2001.
The Machinists' contract prohibits United from contracting out work that results in layoffs of its members, the filing noted. If this provision is dropped, some experts say, the most vulnerable United employees may be its plane cleaners. Their jobs could be contracted out to a company that doesn't provide United's high wages and health insurance benefits.
The pilots' contract is full of rules designed to prevent them from becoming exhausted by long hours and thus endangering passengers, so a busy United pilot flies about 70 to 80 hours a month, Darby said.
In addition, they typically spend twice their flying hours working on the ground, getting ready and waiting for flights.
But limits on layoffs may have left more pilots on the payroll than needed. Throw in people on vacation and pilots being retrained due to all the flights the airline has cut. The result? The airline is getting just 36 hours a month of flying time per pilot, court documents say.
Southwest pilots fly 62 hours a month on average. Federal law allows 100 hours.
One United rule allows pilots to deliberately schedule work that conflicts with their vacations - then skip the work without penalty. The filing described one pilot who scheduled 10 days of vacation and stretched it to an entire month off with full pay.
Why did United agree to such contracts? Simply put, its planes cost too much to let them sit idle in a strike. Competitors would jump in and take customers, "so a strike would likely be tantamount to a death sentence," the filing explains.
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