Today in the Denver Post I there was an article about United's pilot/management negotiations, have fun:
By Greg Griffin and Jeffrey Leib
Denver Post Business Writers
May 28 - The labor dispute between United Airlines and its pilots union climbed to a much higher altitude last week when United announced its plan to acquire US Airways in an $11.6 billion deal.
For much of the past six weeks, many of United's 10,000 pilots have been refusing overtime flying assignments to get the attention of company management and move contract talks along.
Refusing overtime was legal under the current contract between the Air Line Pilots Association and United, which was extended past the April 12 date both parties had targeted for reaching a new pact.
The pilots' overtime action caused crew shortages in recent weeks that forced United to cancel hundreds of flights, stranding thousands of passengers.
Yet analysts say those problems pale before the new difficulties facing United and its pilots in the wake of the company's announced bid for US Airways.
United's pilots still want improvements in pay, benefits and working conditions. But the bid for US Airways is expected to elevate a new bargaining concern - seniority integration - to the top of the negotiations list.
The phrase refers to the thorny task of meshing the 6,000-member pilot workforce at US Airways with the 10,000-pilot contingent at United. Both groups are represented by ALPA, but that doesn't necessarily mean the combination will be smooth.
The inability to blend pilot seniority lists has killed airline mergers in the past.
On Wednesday, Rick Dubinsky, a United captain and chairman of the ALPA unit at the airline, said before the bid for US Airways surfaced that United and its pilots group "faced the enormous challenge of reaching a satisfactory pilot contract that rewards our pilots for the sacrifices we have made to return United to profitability."
In 1994, United's pilots - and other employee groups at the carrier - gave up wages and benefits for stock in United parent UAL Corp. as part of the formation of an employee stock ownership plan, or ESOP. For that exchange, the pilots got a 24 percent stake in the carrier.
"The proposed merger will make that task even more difficult by requiring the integration of two very different pilot groups into a single airline," Dubinsky said.
The union chief added that "nothing is more important to this airline right now than solving the growing friction between management and its pilots."
Yet the task of seniority integration could make that goal even more elusive.
Nearly everything in the piloting business at major airlines is governed by seniority, including what airplane you fly, when you get into the captain's seat and how much money you make.
Now, so many pilots are retiring at United, and new flight crew members are coming on board at such a pace, that pilots are getting into the captain's seat in as little as three or four years.
Ten to 20 years ago, it could take 15 years or more to make such a move because there was far less turnover in pilot ranks.
Some younger, low-seniority United pilots fear that if veteran US Airways pilots - those with say, 10, 15 or 25 years of experience - carry that seniority level onto the seniority list at United, it will delay their own advancement.
Contract disputes within the airline industry never are your typical labor conflicts.
For one thing, unions wield tremendous power in the industry. Airlines cannot easily replace pilots, mechanics and flight attendants. Pilots and mechanics possess a variety of licenses and certificates that are issued or sanctioned by the Federal Aviation Administration. Pilots and flight attendants periodically attend safety training programs that also are mandated by the FAA.
United's pilots know they play a huge role in the company's success or failure.
The contract talks with United management began more than a year ago, but when no agreement was reached by April 12, both sides called in federal mediators.
"The pilots aren't doing anything at work that would negatively affect the company. Everyone is still very professional," said Bruce Graham, a United 767 first officer who moved from Denver to Sterling, Va., in January and now flies from Dulles Airport.
Refusing to fly overtime is "one way pilots felt they could show their disappointment" that a new contract hasn't been reached, Graham said. "Now it's management's problem to solve."
The company has adjusted by not relying on overtime in its summer pilot scheduling, and, for Memorial Day weekend at least, putting flight attendants on call for extra hours.
Pilots' attitude toward management stands in contrast to the mood of goodwill that existed, if only briefly, at United six years ago. That's when the Chicago-based airline became the largest employee-owned company - and the only worker-owned airline - in the world.
United employs more than 100,000 people, about 8,750 of whom live in Colorado. Of its 10,000 pilots, 1,200 are based here.
In exchange for sacrificing wages and benefits to form the ESOP, the pilots and mechanics unions also each received a seat on the board of directors and believed the days of fighting with management were over.
But many pilots now believe they gave up too much for their stake in the company and received too little in return. "We anticipated a culture change," said a Seattle-based United 777 pilot, also a former Denver resident, who asked that his name not be used. "We thought the interaction between pilots, mechanics and management would improve, that we would work together to solve problems. From my perspective, the culture change never appeared to happen."
Pilots say their compensation has fallen well below United's competitors' since the plan was implemented. They want United to bring it back up to industry standards.
Pilots who spoke to The Denver Post said they realize the public is unlikely to sympathize with their desire for higher pay.
A senior United pilot flying a large aircraft earns more than $210,000 a year and under the expired ESOP contract received substantial United stock that is likely to continue growing.
But understanding why the pilots want improved compensation requires a bit of history.
Pilots sacrificed 24 percent of their pay and benefits in 1994 to receive regular stock contributions as part of the ESOP.
Overall, it's been a good deal for the pilots and other employees as United's stock has roughly doubled since then. United employees won't see that money, however, until they retire or leave the company.
Since 1994, the pilots have received pay raises totaling 10 percent. But when their contract became amendable last month, their pay reverted to pre-ESOP levels and the stock payments stopped. That represented a 6.4 percent pay increase, but an overall compensation decrease - 10 percent by some estimates - considering the value of the stock grants.
In other words, United pilots are making what they did in 1994, while their counterparts at other airlines have received raises and negotiated better contracts.
A comparison of pilot pay at the top U.S. airlines is difficult because benefits can vary widely. But according to AIR Inc., an Atlanta airline industry research company, United generally pays its pilots less than Delta and Northwest, similarly to Continental, and more than American. American pilots, however, fly fewer miles than their counterparts, which may account for their lower pay. Delta, meanwhile, is known for paying pilots more but offering less lucrative benefit and stock-ownership plans.
Herb Hunter, spokesman for the Air Line Pilots Association, said the disparity is too great.
"I'm a 777 captain, and I make a reasonable amount of money," said Hunter, who earns about $200 an hour when flying. "But a Delta captain sitting in the same cockpit of the same aircraft makes $65 more an hour than I do. The company says that's an aberration, but it's true across the board." United pilots also like to point out that first-year airline pilots earn about $30,000 and don't begin to haul in six figures until they've been there a few years. Hunter cited some of the dues that pilots pay well before they ever reach the captain's seat on a 777, flying international routes for top pay.
Those who use flying in the military as a way station to a commercial pilot's career face huge odds from the start, he said. "Forty percent of my pilot training class washed out," said Hunter, a former Air Force pilot.
Those pilots who follow a civilian aviation path to the majors encounter other difficulties, he added. "These guys fly all-night charters and mail flights, often with bad airplanes, no radar and not high enough to get over the weather.
"I appreciate what civilian pilots have done. They have to really want the job to get here." Last month, pilots rejected United's offer of a 13.4 percent increase to their current, 1994-level pay. Pilots say the raise was inadequate considering that their overall compensation dropped by up to 10 percent when they stopped receiving stock on April 12. Using that number, the 13.4 percent increase amounts to only 3.4 percent.
The pilots also want the airline to change how they're compensated.
Pilots are paid only for the time they are flying the airplane. Layovers and routine time between flights, not to mention departure delays, are uncompensated.
The airline guarantees pilots they'll be paid for at least one of every 3 1/2 hours spent on the job. The pilots want to reduce that to a 3-to-1 ratio.
"Eighty flying hours can mean you're away from the home for 200 to 240 hours a month," the Seattlebased United 777 pilot said. "There's no incentive for the company to schedule efficiently." Graham, the United first officer, said he's away more than that.
"I'm gone 260 to 280 hours a month, which is 60 to 70 hours a week away from my family. That's time that I can't walk my dog, I can't mow the grass, I can't spend time with my wife. I can't do many of the things you can because I'm stuck in a hotel room in Seattle," he said.
"I want you (United) to be more efficient in how you schedule so that I'm flying more of my work time," he said.
The issue is one of safety as well as quality of life, the pilots argue. Despite strict parameters on how long a shift can last and how much time off pilots are guaranteed, the system does not eliminate fatigue, Hunter and the other pilots said.
Hunter uses the example, an extreme and rare one, he admits, of an early-morning flight from Miami to San Francisco. The pilot would get a 12-hour layover in California during which he would toss and turn for several hours in a hotel room. Late that night he would fly back to the East Coast on a redeye.
It's legal and within United's rights, but not necessarily safe, said Hunter, who lives in Florida.
Another issue at the top of the pilots' negotiating list is ensuring that United's regional jet strategy doesn't cost them jobs.
Like other U.S carriers, United is expanding its regional jet service, which allows it to serve more destinations using smaller aircraft. United is considering building a new commuter terminal at Denver International Airport that would accommodate more such planes. Air Wisconsin operates the regional jets for the United Express commuter service.
Under an agreement reached between ALPA and United in 1997, United Express carriers can operate no more than 65 regional jets, but United wants to fly as many as 350. The issue is being negotiated, but so far ALPA has stood firm.
The fear among some United pi lots is that the growing use of regional jets could replace or reduce the mainline flying they do. Within the union, some pilots say the company should buy its own regional jets and allow United crew members to fly them.
United Airlines will not comment on any of the specific issues under negotiation.
"We are committed to the negotiating process and to getting as early of an agreement as we can," United spokesman Andy Plews said.
The recent pilot overtime refusals may have contributed to the airline's desire to move forward.
United officials admit that the move took them off guard and that many passengers were inconvenienced. During early May, the airline said it was canceling as many as 100 flights a day, including about 30 in Denver, of a total of 2,400 flights. But the airline has since been able to cut that to less than 50 a day, and to notify most passengers well in advance that their flights have been canceled.
"We are trying to proactively manage the pilot overtime issue, and we clearly understand where (the pilots' union) is on that, and we understand their position," UAL chairman and chief executive James Goodwin said at the company's May 18 annual meeting in Chicago.
A work slowdown or strike remains a remote but unsettling possibility.
In 1997, travel plans of American Airlines passengers nationwide were thrown into limbo for several weeks as a pilot strike neared. Nearly three years of negotiations had failed to produce a new contract.
President Clinton intervened, and the airline eventually reached an agreement with its pilots, but not without angering and inconveniencing many customers.
A similar situation remains a remote possibility for United. Under the Railway Labor Act, which governs labor issues for the airline industry, both sides must follow a series of steps that include mediation, voluntary arbitration and then a 30-day cooling-off period before a job action can take place. Even then, the president can step in and appoint an emergency panel to oversee further negotiations.
But at this point, no one is looking that far down the road.
"Everything is on the table," pilot spokesman Hunter said of the negotiations. "We just want a fair contract and to move on." But last week's announcement about the proposed US Airways acquisition adds more turbulence to the talks.
Copyright 2000 The Denver Post. All rights reserved.