Airline Division News Items
FAA Reauthorization Act of 2009 Out of Senate Commerce Committee and Contains Sen. Claire McCaskill (D-MO) Provisions on Foreign Repair Stations
On July 21, the Senate Committee on Commerce, Science, and Transportation approved the "FAA Air Transportation Modernization and Safety Improvement Act" (S. 1451) by voice vote. It includes McCaskill provisions on foreign repair stations. McCaskill's legislative language seeks to resolve a number of safety and security issues at foreign repair stations that perform maintenance on domestic aircraft. The provisions included in the FAA reauthorization bill would require that all locations where aircraft maintenance is done be certified by the FAA or meet equivalent standards, require that all foreign repair stations have drug and alcohol programs, and require twice yearly inspections of foreign repair stations. The Committee passed legislation clarifies that foreign repair stations may establish drug and alcohol programs consistent with the host country's laws and the program of inspections should be carried out consistent with trade agreements. The full Senate must now vote on the Committee bill and FAA Reauthorization will then go to conference committee to iron out differences with the House Bill that passed in May.
Appeals Court Overturns Earlier Ruling in Frontier Bankruptcy Case. A Great Win for Labor
The Teamsters Airline Division appealed a November 14, 2008 order of the United States Bankruptcy Court which granted a motion of Frontier Airlines to reject its collective bargaining agreement with the Teamsters under Section 1113 of the bankruptcy code. The Teamsters argued that Frontier failed to satisfy the statutory requirements for rejection. On July 20, 2009, the United States District Court of the Southern District of New York ruled in favor of the Teamsters.
According to the decision, the bankruptcy court applied improper standards by considering proposals and supporting disclosures after the hearing had begun to consider Frontier's proposal to reject the CBA. The appeals court ruled that the plain language of the statute required that a decision to reject be based on a timetable that considers proposals that are made initially, and proposals that are made up to the date of the hearing. Likewise, the Teamsters argument that the informational disclosures were inadequate to evaluate the proposal were subject to the same time limits and could not be perfected during the hearing.
Frontier was seeking the unlimited right to permanently outsource its heavy check maintenance. The bankruptcy court did not allow that, but did allow Frontier to implement a 14 percent cut in wages based on proposals made during the hearing.
"This is a resounding victory," said Teamster General President Jim Hoffa. "The U.S. District Court recognized that the company rushed to the courthouse without bargaining in good faith with the Teamsters". This decision clarifies the proper application of Section 1113 for all labor groups subject to that section of the Bankruptcy Code.
United Update on Getting a Pension Plan for the Mechanics
One of the Union's top priorities is to secure defined benefit pension benefits and retirement security for the UAL mechanics and related craft and class. The Union's representatives have been advised that although the Pension Benefit Guarantee Corporation (PBGC) will not and cannot restore the UAL defined benefit plans that were terminated during the UAL bankruptcy, the PBGC will not oppose any effort to negotiate UAL into a defined benefit multiemployer pension plan. Having secured this "green light," IBT Chief Negotiator Clacy Griswold and IBT counsel Ed Gleason met with representatives of the Western Conference of Teamsters Pension Trust to discuss the possibility of negotiating UAL into the Fund. The Fund's representatives confirmed the Fund's administrative procedures and benefit structure. The Fund's representatives advised that they would be available to attend "road shows" with the membership to discuss the Fund's structure in greater detail and to answer any questions. Union representatives have also met with the Union's actuaries who are providing expert assistance with respect to the
Union's UAL pension project. Finally, Chief Negotiator Griswold has scheduled a meeting of the negotiating committee's pension subcommittee next week. The subcommittee will meet in Denver, Colorado, when contract negotiations resume.
FAA Safety Forum Program Initiated
The FAA will hold eleven Safety Forums around the country to open a dialogue with as many airlines as possible to discuss best safety practices. The FAA expects airlines that have contractual relationships with regional feeder companies to develop specific programs to share safety data and ensure that their partner airlines mirror their most effective safety practices. The Teamster Airline Division representative Russ Leighton attended the kickoff meeting this week and will be the lead labor representative at an August 6 meeting in Anchorage, an August 20 meeting in Miami, and an August 27 meeting in Las Vegas.
Teamster Airline Division Officials Will Work with Continental Management to Mitigate any Potential Layoffs
Senior Airline Division officials will be meeting with Continental management to discuss ways to mitigate any possible layoffs of its members that might occur as a part of Continental's recently announced layoff plans. Contract negotiations with Continental will resume the week of August 8 in New York.
Week in Review News Items
Labor Developments
A federal district judge overturned a bankruptcy court decision allowing Frontier Airlines Inc. to reject a contract with unionized machinists represented by the International Brotherhood of Teamsters. And James Hoffa, Teamsters union general president, visited Houstonon Friday as part of the union's push to organize Continental Airlines fleet service workers. Once again U.S.airlines employed 6.8% fewer workers in May than a year earlier, the 11th straight month with a year-over-year decrease, according to the Department of Transportation.
Safety & Oversight
The pilots of a Continental Airlines jet apparently failed to respond properly last December when their speeding plane veered off the side of a runway in high winds and crashed at DenverInternational Airport, according to information gathered by federal accident investigators. And business travelers have long complained about uncomfortable regional airplanes, but recent revelations about low pay for the crew and sketchy rest standards are raising new questions about a more unsettling topic: safety.
FAA Reauthorization
Last week Senate Commerce Committee leaders introduced a $35 billion bill to reauthorize Federal Aviation Administration programs through fiscal year 2011. Like the House bill, which was passed in May, the Senate Commerce bill would increase FAA inspections of foreign repair stations from once a year to twice. But it does not contain controversial House bill language that would make it easier for FedEx workers to unionize.
U.S. Airlines Q2 Financial Results
Southwest Airlines and the parent of United made money in the second quarter, but the profits were overshadowed Tuesday by more job cuts and pessimism over the severe slump in travel and rising fuel costs. Continental Airlines reported a big loss and said it would cut 1,700 more jobs. Passengers can expect another wave of higher fees in the form of increased baggage fees to sweep through terminals around the country, with carriers trying to offset revenue lost to lower fares and promotions. Delta Air Lines posted a second-quarter net loss of $257 million, narrowed from a $1.04 billion deficit in the year-ago period, with results for both quarters heavily affected by special charges. On brighter notes, AirTran Holdings Inc., parent of discount carrier AirTran Airways, on Wednesday posted a $78.4 million second-quarter profit and US Airways as well reported a second-quarter net profit, reversing a year-ago loss.
Miscellaneous
UAL Corp. named company insider John Tague president of United Airlines, creating a clear No. 2 position at the Chicago-based carrier. A380 customer list reads like a who's who of the most successful and ambitious airlines in Europe, the Asia Pacific and the Middle East, with 16 customers sharing 200 orders among them.
Mexico has grounded seven discount airlines for safety violations. And even Republic Airways CEO Bryan Bedford hasn't thought of his company as a real airline — until now. Republic, one of the USA's most successful regional airline companies in the last decade, has flown other airlines' routes for them, for a fee. But that's changing quickly because of two big deals: On July 13, a federal bankruptcy judge approved Republic's takeover of Frontier Airlines for $108.8 million unless it is outbid. And last month, Republic agreed to pay $6 million to acquire Milwaukee-based Midwest Airlines.
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