April 23, 2010 Newsletter

Horizon Mechanic Talks Continue, Management Seeks to Outsource Teamster Jobs

Talks between Horizon mechanics, represented by the Teamsters and Horizon management continued this week in Portland, Oregon. Among areas discussed were Sections 13, 18, 20 with progress reported in all areas discussed and a Tentative Agreement reached on Article 21.

The next scheduled meeting with management will be June 1st through 4th in Portland.

Major Win for Frontier Employees as Judge Orders Return to Status Quo

This week brought a major victory for the over 200 Frontier mechanics, related and stock clerks represented by IBT LU 961 based in Denver, when a Federal judge issued a preliminary injunction ordering all IBT represented employees returned to their jobs with full back pay and benefits. RAH Holdings had taken the position that as an outcome of their acquisition of Frontier, they had the self help, including the right to fire the mechanics and abrogate the terms of their contract. The court’s ruling stated in part that:

“…RAH and Frontier do not contend that they have complied with the major dispute resolution procedures that precede self-help, such as negotiation, mediation under the auspices of the NMB, binding arbitration, or cooling-off periods. Thus, IBT is entitled to an injunction restoring the status quo as it existed prior to February 24, 2010 – namely, an injunction requiring RAH and Frontier to assign all Frontier mechanics-and-related and stock-clerk work to Frontier employees in accordance with the Frontier-IBT collective bargaining agreements…”

Storm Clouds Loom at Arrow Air

Recently, news reports have indicated that Arrow Air may be very close to failure and complete shutdown. WARN Act notices have been issued to employees and discussions are reportedly ongoing with interested parties. Sources report that Centurion Air Cargo may be interested in purchasing the carrier, but no confirmation has been made of that report. Centurion pilots are represented by Teamster Local 769, while pilots at Arrow are represented by Local 747. 

Local 2727 Mediation Continues In Washington

 This week Local 2727 met with the Federal Mediator and UPS for continued talks in Tyson's Corner, Virginia. The Negotiating Committee continued to press the Company for the final items including full retroactive pay, no employee contributions for health insurance, reasonable raises and contract language that provides job protection for their membership. IBT Airline Director David Bourne attended the negotiating sessions this week and informed the Company that the International fully supports the position that members will not be paying for their health insurance.

The Negotiating Committee presented a comprehensive offer to the Company in an effort to complete the negotiations. When the Company did not respond with a counter proposal, the Federal mediator assigned to the case advised both parties that due to their lack of progress and the limited resources of the NMB, she was unable to set additional meeting dates at this point.

The leadership of Local 2727 has requested that IBT Airline Director David Bourne seek a release from mediation from the NMB so this dispute can be processed into the cooling off period required by the Railway Labor Act. Should the NMB chose to act upon the request, they may chose to either release the parties to a cooling off period, or release the groups back to general bargaining under Section 6 of the RLA.

 Week In Review News Items

Labor Developments

A federal judge in Milwaukee ruled Tuesday that Frontier Airlines and its parent company must restore all mechanic and stock-clerk work to union- covered employees. The Teamsters filed a request for an injunction against Frontier and Republic Airways in March, claiming Republic officials abrogated a collective-bargaining contract with Frontier mechanics and stock clerks…as the rumblings of airline labor unrest and possible strikes grow louder, the average traveler wonders: Where did all this come from? The answer is simple: It's that time. Through the middle of the past decade, most major U.S. airlines forced employees to accept new contracts that cut their wages, required more productivity and took away benefits, airline industry analysts say. 

Regulatory & Safety

Transportation Secretary Ray LaHood said Thursday he has turned down requests from five airlines for temporary exemptions to a rule against keeping passengers waiting longer than three hours on airport tarmacs. The new rule goes into effect April 29…as airlines start counting the cost of covering stranded passengers' hotel fees, pressure is rising on governments to reassess the rules on what travelers are entitled to…Sir Richard Branson’s Virgin Atlantic airline on Thursday night moved to defend its reputation after Britain’s competition watchdog accused it for the second time of conspiring with a rival to fix prices charged to passengers. The Office of Fair Trading claimed that employees of Cathay Pacific Airways and Virgin exchanged commercially sensitive information between 2002 and 2006 with the aim of co-coordinating ticket prices on the busy London-Hong Kong route.  

Airline Industry Finances & Structure

Continental Airlines lost $146 million in the first quarter — a wider loss than analysts expected — as higher fuel costs offset an increase in revenue…AMR Corp posted its third worst first quarter loss in its history, losing more than half a billion dollars, topping the two post-911 years when it lost over a USD1 billion in each of those years. American cited rising fuel costs for the widening of its net loss in the first quarter from the USD375 million lost in 1Q-2009 to USD505 million lost in the 2010 first quarter, a 34.6% increase. 

Commercial Aviation’s Value

Aviation’s value in world commerce and communications is generally taken for granted – until it stops. Ask any travel agent or airline today what the social wear and tear has been as a result of the ash cloud over Europe; from deep inconvenience to family tragedies, surface transport options have proven woefully inadequate to fill the gap, even those within Europe, let alone the hundreds of thousands of travelers stranded around the world. The commercial and economic value is easier to account, although it will take months to see the full impact of this week’s airspace shutdown. It will be vast, many billions of dollars – far greater than the immediate economic impact figures doing the rounds at present.

 Miscellaneous

There's new official word that JetBlue has named Hartford as its newest city…ExpressJet Holdings board of directors named Thomas Hanley president and CEO effective immediately…U.S. airlines never met a fee they didn't like. Until now, it seems. Five major carriers agreed this week not to follow the lead of a small Florida airline that plans to charge for carryon bags…hundreds of people at major U.S. airports each year are severely ill with symptoms of potentially contagious diseases, yet few are reported to health officials as intended under U.S. regulations and international guidelines…Apple has filed a very interesting patent for a travel app called iTravel that books flights, hotels and car reservations. But the most interesting part is how it uses a radio chip to check you in at the airport, whisk you through security and allows you to wireless board your flight.