Airline Advisor’s Opinion Inaccurate, Pilot Concessions Were Unnecessary at Frontier
The International Brotherhood of Teamsters (IBT), the certified union representative of the pilots of Republic Airlines and Frontier Airlines, today disputed a claim by Republic and Frontier Airlines’ advisor Michael Cox that a lawsuit filed by the union earlier this month has placed the financing the company is seeking in jeopardy.
Earlier in August, the union filed a lawsuit in U.S. District Court in Denver against Frontier Airlines Inc., its parent company, Republic Airways Holdings Inc. and a shell company set up by the rejected former union of Frontier.
The lawsuit alleged that Frontier, Republic Airways Holdings and the former union of Frontier pilots, the Frontier Airline Pilots Association (FAPA), which recently lost a union representation election to the IBT, entered into unlawful concessionary agreements intended to interfere with the Republic subsidiaries' pilots' choice of IBT to be their collective bargaining representative, and to perpetuate FAPA's continued representation of Frontier pilots. The lawsuit seeks to invalidate the agreements.
Teamsters’ economist James Kimball, in a sworn affidavit, disputed the claim by the airlines’ consultant that their restructuring plan was now in jeopardy. In fact, the company’s own filings with the Securities and Exchange Commission (SEC) contradicted that claim. “This opinion is inconsistent with the company’s Aug. 2, 1011 SEC Form 8K report and its Aug. 9, 2011 SEC 10Q quarterly report, the company’s most recent SEC filings,” Kimball said.
“Straight-forward mathematics shows that the company’s Frontier-restructuring initiative can proceed without the LOA 67 concessions, assuming the accuracy of the Cox Declaration’s representations that other concessionary agreements by Frontier vendor or employee groups require that the company achieve 80 percent of its $120 million goal of annual savings, i.e. $96 million.
“There are no specific facts or documentation of any kind offered or referenced to support any of these representations or opinions in the Cox Declaration. The company's Aug. 9, 2011 10Q nowhere mentions that there would be a material adverse impact upon the company's ability to raise additional liquidity or that the Frontier restructuring plan would be placed in jeopardy if IBT succeeded in this litigation. The company does estimate in the 10Q the anticipated material adverse impact upon the company if the IBT is successful in the litigation. It states only that if IBT is successful in the lawsuit, Frontier would lose approximately $9 million to $10 million in cost savings per year over each of the next five years,” Kimball stated.
This reflects less than 10 percent of the value of its restructuring plan and less than a $2 per barrel annual change in the price of oil to the company.
“It’s outrageous that the company would make false claims about the financial path of the company to gain a perceived procedural advantage in a lawsuit, said David Bourne, Director of the Teamsters Airline Division
Roadshows Begin on Omni Tentative Agreement
After three years and six months of negotiations, including two years with a Federal mediator, the pilots of Omni Air are now being briefed on their first Tentative Agreement that was reached recently with management. Meetings scheduled throughout the system are allowing the membership to meet with their representatives and negotiators to review the entire document.
Among the highlights are pay raises; 40% for Captains and 30% for First Officers with 3% annual raises for the life of the contract. Negotiators also included some of the strongest scope language ever seen in the airline industry, protecting job security and future growth.
Roadshows began this week in Las Vegas and will also be held in Dallas and Atlanta next week, with the final roadshow scheduled for crews in Shannon, Ireland the week of August 29th.
Teamsters Airline Division Issues Statement of Support for JetBlue Pilots
After the announcement of the decision of the pilots of JetBlue to reject representation by ALPA, the following statement was released by Airline Division Director David Bourne:
“The Teamsters Airline Division respects the efforts of the pilots of JetBlue as they have undertaken this uniquely personal process to determine what is best for them at this time.
“The Teamsters Union knows that JetBlue is a special brand of airline in this industry with a unique pilot group. We understand that JetBlue Pilots are looking for unique solutions, and are not interested in going down the old road from which many have come so far and paid so dearly and are looking for a new road to travel, just as their airline did over 12 years ago.
“JetBlue has an individual culture in this industry. The preservation of that culture is paramount to ensuring the success of JetBlue in the future. The Teamsters Airline Division extends its support as the JetBlue pilots move forward.
“Should the JetBlue pilots group ever have concerns and seek advice, they should be assured that the Teamsters Airline Division will always be available and ready to serve the JetBlue pilots through affiliation including the Teamsters Union’s membership with CAPA, with services agreements (insurance, legal protection, safety etc.), or by the establishment of a unique JetBlue local counsel to run independently within the Teamsters Airline Division.
“We stand ready to assist in whatever way we can. Together airline labor will succeed.”
Airline Division International Representatives meet with Continental Micronesia Mechanics Steering Committee
Airline Division Representatives, Clacy Griswold, Bob Fisher and Paul Alves, along with Local 986 Business Agent Francis Diaz, held meetings in Guam with the Continental Micronesia Mechanic Steering Committee this week, to begin the amalgamation process of the Continental Micronesia Mechanics Agreement and the Continental Airlines Mechanics Agreement, as part of the overall United Airlines/Continental Airlines Mechanic merger.
The Steering Committee worked all week to form the framework document that will be used to negotiate the amalgamated Continental Mechanics contract. Once the amalgamation of the two Continental Mechanic group’s contracts is completed, the amalgamated Continental Mechanic contract will be amalgamated with the United Mechanic contract to form the new United Airlines Mechanic contract. Currently, the United Mechanic group is in mediation working on a tentative agreement after failing to ratify a proposed T/A in March of this year. The first mediated negotiations are scheduled for sometime in November, on a date yet to be set with the National Mediation Board.
During the week, the Airline Division Representatives and Local 986 Business Agent also held craft meetings for the Continental Micronesia Mechanic group, Customer Service Agents, Cargo Agents and Stores Agents.
Teamster Pilots among the First to Operate Boeing’s Newest Aircraft
With the announcement on Friday of the FAA’s certification of the Boeing 747-8F, crewmembers of Atlas Air World Wide, (Local 1224) are looking forward to soon operating the newest member of the Boeing family. Known as the “8F,” it is the latest in the venerable 747 family that first flew in 1969 and entered commercial service in 1970. Atlas operates the worlds largest all cargo 747 fleet and began passenger service for a charter customer last year and the US Air Mobility Command this past May.
Deliveries of the aircraft are scheduled to begin later this year.
Airline Division Joins Delegation to Japanese Embassy on behalf of JAL Crews
Airline Division Director David Bourne joined a delegation of labor leaders from the ITF (International Transport Workers Federation) who met with officials at the Japanese embassy this week on behalf of the JAL (Japan Air Lines) cabin crews.
The Japan Airlines Cabin Crew Union (CCU) along with ITF affiliate Koku Rengo and the Japan Airlines Flight Crew Union (FCU), have been impacted by the measures put in place by the Enterprise Turnaround Initiative Corporation of Japan (ETIC-J), established by the Tokyo District Court to reduce the number of employees in Japan Airlines (JAL) to 32,600 by the end of March 2011.
Despite a series of voluntary schemes, which have already fully achieved the workforce reduction targets, JAL decided unilaterally that compulsory dismissals were necessary to secure a further 81 flight crew and 84 cabin crew job reductions.
In the case of cabin attendants, neither the CCU, JALFIO, nor ITF member organisation Koku Rengo, received any approach from JAL management to negotiate on the workforce reduction. Management rejected negotiations on how dismissal could be avoided through work sharing and voluntary furloughs. As a result of managements actions, the dismissal of a disproportionate number of workers including part of the leadership of the unions.
Airline Industry News
Regulatory, Governmental and Safety
As the result of an in-flight cockpit fire on a United Airlines flight, the NTSB has asked the FAA to increase the length of flight crew oxygen hoses…the White House has postponed new rules aimed at tackling pilot fatigue amid opposition from cargo and charter airlines. The new target date for issuing final rules is now late November…Deborah Hersman has been sworn in for her second term as Chairwoman of the NTSB…Boeing’s newest aircraft; the 747-8F Freighter received its FAA certification on Friday.
Labor
USAirways CEO Doug Parker told employees this week that the airline is open to the possibility of a merger and that the carrier will keep Charlotte as a hub even if it merges with another airline…after 58% of the pilots of JetBlue Airways voted against joining the Airline Pilots Association this week, JetBlue CEO David Barger thanked the pilots for opting "to retain and expand their direct relationship with the company."…the pilot union leadership of AirTran has rejected a seniority integration deal with the pilots of Southwest Airlines, forcing a return to the negotiating table.
Industry and Financial
Southwest Airlines has launched "Random Acts of Coolness," as they introduce the airline to Atlanta…faced with an uncertain economy and airline passengers exercising economic caution in their travel, US airlines may look to cut capacity in the fall…subsidiaries of the Hong Leong/Guoco Group conglomerate, controlled by billionaire Quek Leng Chan, have purchased a 7.3% stake in American Airlines…a Federal judge ruled on Friday that USAirways can proceed with a lawsuit accusing its pilots union of encouraging and engaging in an unlawful work slowdown.