July 2, 2010 Newsletter

ASA Mechanics File for Teamster Representation, First Under New NMB Ruling

The 570 mechanics and related employees at Atlantic Southeast Airlines seeking to join the International Brotherhood of Teamsters became the first unit to file for a union election with the National Mediation Board (NMB) under the new rules that dictate election outcomes will be based upon the majority approval of voting workers rather than the majority of the unit as a whole.

Prior to the NMB voting to change the rule earlier this year, workers who didn’t vote in union elections were counted as “no” votes. The Teamsters Union supported this change and has always led the fight for a fair, democratic process for workers to form a union in the airline and rail industry.

Many workers at Atlantic Southeast Airlines, a regional airline based in Atlanta, have lost their jobs due to outsourcing. The campaign to gain Teamster representation has been ongoing for more than two years and many see filing with the NMB as a milestone in their bid for respect and a voice in the workplace. Mechanics at the airline receive some of the lowest pay and benefits in the industry.

“We’ve worked really hard to get to this point. I think this will be a great first step toward a partnership with Atlantic Southeast Airlines that will benefit customers and employees alike,” said Mitchell Cline, an employee at Atlantic Southeast Airlines.

American Rights at Work, a Washington, D.C.-based workers’ rights policy and advocacy organization, has pledged to monitor the organizing campaign to ensure Atlantic Southeast Airlines does not engage in the type of anti-union activities that plague elections under the National Labor Relations Act.

The Teamsters Airline Division, building on recent organizing success among airline mechanics at United Airlines and Horizon Air, and continuing the momentum from the victory with 8,000 Continental fleet service workers earlier this year, is committed to fighting for the rights of employees at Atlantic Southeast Airlines.

“The mechanics and related at Atlantic Southeast Airlines have shown great courage and dedication by filing for this election,” said Teamsters Airline Division Director Captain David Bourne. “This puts the company on notice that management’s behavior will be scrutinized carefully to ensure that workers rights are respected.”

District Court Affirms NMB Rules Change, Denies Management Group Appeal

Responding to an appeal filed by the Air Transport Association (ATA), the United States District Court for the District of Columbia has rejected their attempt to overturn new National Mediation Board (NMB) rules governing union elections. 

In May the NMB announced changes in union voting requirements under the Railway Labor Act (RLA) that governs airline employees. The rule changes bring about a more democratic process for workers seeking union representation in the rail and airline industries. ATA, an industry organization representing many U.S. airlines, filed a legal challenge a week after the ruling delaying its’ implementation, in hopes that the courts would reverse the NMB action.

 WTO Orders EADS / Airbus to End Illegal Subsidies, Major Win for U.S. and Boeing

This weeks’ announcement by the World Trade Organization (WTO) that billions of dollars in European launch aid subsidies, used by Airbus to design, build and market commercial airliners, is illegal and must stop immediately is seen as a big win for Boeing. In the ruling, the WTO also found that international trade agreements were also violated when Airbus was given funding by various governments for research and infrastructure development.

Boeing CEO and President Jim McNerney, commenting on the ruling said, "This is a landmark decision and sweeping legal victory over the launch aid subsidies that fueled the rise of Airbus and that continue to provide its products a major cost advantage. The Office of the U.S. Trade Representative deserves tremendous credit for today's decision. We now join the U.S. government in urging full compliance with the ruling and a permanent restoration of fair competition within our industry."

"Each and every instance of launch aid that the U.S. challenged was held to be illegal," said J. Michael Luttig, Executive Vice President and General Counsel for Boeing. In pointing out that the European provided launch aid for the A380 included export contingent subsidies which are prohibited, Luttig noted that in addition to the requirement that the subsidies be withdrawn “without delay,” and having to end their plans to finance the A350 with illegal subsidies, Airbus will also have to repay $4 billion dollars of illegal launch aid it received for the A380 or restructure its financing to use proven commercial terms. 

"The panel said that without the illegal subsidies it received, Airbus would not have the aerospace market share it now enjoys. This ruling will alter the competitive landscape in the aerospace industry forever, forcing Airbus to compete in the marketplace on the same terms as Boeing," Luttig went on to say.

Luttig noted that was it was determined that the A380 launch aid funding was also found to be prohibited export-contingent subsidies, which WTO rules require be withdrawn "without delay." "Under today's decision, Airbus must repay the $4 billion in illegal launch aid it received for the A380 or restructure the A380's financing to proven commercial terms. Likewise, Airbus must abandon its plans to finance the A350 through the use of illegal subsidies."

The ruling, which was the result of a complaint filed by the U.S. in 2004, is subject to an appeal process that should be resolved by the end of 2010.

As Luttig noted, "the WTO rejected all excuses for continuing launch aid, the most pernicious form of subsidy Airbus receives, as well as all other forms of subsidies Airbus and parent EADS use for unfair advantage in the commercial airplane market and in defense markets for military-derivative aircraft. Airbus must now compete on its own, without the assistance of European taxpayers – assistance the U.S. estimates has exceeded $200 billion in value to Airbus."

What impact this will have upon the proposed entry by the European conglomerate for the new U.S. military refueling tanker by EADS, the Airbus parent is unclear at this point, according to sources.

Commenting on the ruling, Airline Division Director David Bourne said, “This is a great victory for Boeing and American working men and women. We have always said that American workers can compete anytime, anywhere and win as long as there is a level playing field. With this ruling, that field now begins to return to level and we have the chance to prove once again that when it comes to delivering a first class, cost effective product, you only need look right here in America, to American workers,” Bourne concluded.  

Week in Review News Items

Labor Developments

TWU is telling ground workers at American Airlines to take strike votes this month. The union said Thursday it asked local leaders to mobilize strike committees and get picketing permits at airports…unions for thousands of flight attendants and ground workers at the old Northwest Airlines say they will seek a vote at Delta, taking advantage of new election rules that make it easier for them to win…and a trade union representing 12,000 flight attendants at British Airways called off a strike ballot scheduled for this week to consider a new offer on pay.   

A change in NMB rules governing union representation elections was scheduled to take effect after a federal court rejected an industry challenge last week. ATA spokeswoman Victoria Day said Wednesday that ATA hadn't decided whether to appeal a District of Columbia court's ruling upholding the rule change. 

Legislative, Regulatory & Safety

Federal regulators have proposed fines of nearly $2.5 million for safety violations against two regional air carriers that operate commuter flights for United Airlines and US Airways…U.S. passenger airlines are exasperated with tougher regulation and fear their nascent recovery could stall as the Obama administration presses consumer, safety and security initiatives. Although frustrated at times with the more business-friendly Bush administration, the industry believes stepped-up action under President Barack Obama has been downright punitive.  

Federal aviation officials have known for years that cockpit window heaters in some Boeing planes catch fire. But they haven't required airlines to fix the problem, even after dozens of incidents that unnerved pilots and, in some cases, forced emergency landings. 

Airline Industry Finances & Structure

As part of efforts to focus on its core mainline business, Delta is continuing the process of unbundling its regional operations, selling Mesaba and Compass – both acquired with Northwest – to Pinnacle Airlines Corp and Trans States Airlines, respectively, for USD82 million…low-cost U.S. airlines, whose cheap fares once sparked a price war that tipped a few larger rivals into bankruptcy, are still increasing their share of the market, but at a slower pace because of a lack of expansion opportunities…Iberia said on Tuesday it had signed an EUR€8 billion (USD$9.8 billion) merger deal with British Airways to create the world's third biggest airline after reaching an agreement over BA's pension deficit.   

Miscellaneous 

Here are the main conclusions of the WTO panel that ruled in the complaint brought by the United States against the European Union over aid for Airbus civil aircraft…finally, it's remodeling time at the big U.S. airlines. After years of delays, coach cabins of many passengers jets are getting leather seats, roomier overhead bins, better entertainment systems, Wi-Fi access, more electrical outlets—and sometimes more seats crammed into the same space…a top U.S. scientist is calling for more research into the airport body scanner after questioning the amount of radiation it delivers to parts of the body…many meals served to passengers on major airlines are prepared in unsanitary and unsafe conditions that could lead to illness, government documents examined by USA TODAY show.