May 28, 2010 Newsletter

Atlas Pilots Express Concern over Management Tenor in Discussions

Citing concerns expressed by the negotiating committee over what appears to be increasing intransigence by company negotiators, Atlas TEC Co-Chairman Captain Steven Richards commented on the most recent report to crewmembers. “It is increasingly apparent to the line pilots of Atlas, that the company; despite record profits, is intent on refusing to change work rules that have been in place for eight long years. During that time, we have seen continued abuses of both the spirit and intent of the contract and the company is now using their pattern of contract violations as the basis to demand even more,” he said. “There are many opportunities on the horizon for Atlas Worldwide; now is the time for them to remember that just as we helped them successfully navigate a bankruptcy, we can help them capitalize on short and long term opportunities now. The direction we take will be decided by their willingness to negotiate fairly, reach a fair agreement and stop the abuses that they engage in on a daily basis,” he concluded.

Airline Division Calls on Alaska Air Group to End Use of Non Standard Repair Facilities

Seattle-based Alaska Air Group, the parent of Alaska Airlines and Horizon Air, “is compromising safety in outsourcing aircraft maintenance,” said David Bourne Director of the Teamsters Airline Division, in a news release announcing the union's demand that Alaska Air Group (NYSE-ALK) disclose the standards used for outsourced aircraft maintenance and how the company enforces those standards.

"Alaska Air Group shareholders know all too well the devastating impact an airline tragedy can have on the security of our nation, the safety of our passengers and the bottom line of business. That's why the company's increased reliance on contract repair facilities, which are not subject to the same regulatory standards as the company's in-house maintenance operations, is of such great concern to all of the company's stakeholders," Bourne stated.

Shareholders were recently blocked from voting on whether the company should disclose these policies. Alaska Air Group argued to the Securities and Exchange Commission that it is not a significant public policy issue and therefore not an appropriate issue for investors to consider, the Teamsters said. In addition to the outsourcing of its Alaska Airline unit’s heavy maintenance, they now are now seeking to outsource all of the heavy checks for its Horizon Air unit as well.

The term “heavy check” refers to a mandatory type of aircraft inspection that occurs after a specific amount of actual aircraft flight hours as defined by the manufacturer. In order to accomplish a “C” check, the aircraft is taken out of service and requires hangar space at a maintenance base to complete. The heavier inspection or “D” check occurs approximately every 4–5 years and requires the almost complete disassembly of the aircraft for through inspection.

"It's time that Alaska Air Group adopt and disclose a single, enforceable standard for all aircraft maintenance operations to protect the security of our country, the safety of our passengers, and the best interests of our company," Bourne said.

Horizon Air pilot, Captain Trevor Bulger, a 10 year veteran of the carrier said, “I don't want the plane I fly to be maintained by the lowest bidder who is not subject to the same regulatory standards as our own mechanics. Aircraft maintenance is not the place to cut corners,” he commented.

Citing Continued Delays at UPS, Airline Division says, “It is Time to Advance This Case”

Citing over 75 days and 850 hours of negotiations that have occurred since negotiations began in November 2006 and the lack of agreement on key issues within the contract still unresolved, Teamsters Airline Division Director David Bourne has formally requested that the National Mediation Board (NMB), “…induce the parties to submit the controversy to arbitration in accordance with the provisions of…the Act.”  

Requested by the leadership of Local 2727, Director Bourne noted in his letter to the NMB members the lack of movement on several key areas; including the company's refusal to consider the union's demand for retroactive pay and pension contributions; instead offering a one- time signing bonus without pension contributions, wage increases proposals by both sides that widen over the life of the contract and the company's insistence on members contributions on health care premiums, something the company has never required before and the union has said is unacceptable.  

Thus, he concluded, “…it is the company, not the union which is seeking dramatic change in this round of bargaining…acquiescence to the Company’s aggressive bargaining stance is an even worse alternative than the status quo.”

The parties are in recess at the Board’s direction until they come to a decision on the unions request. They have several options at their disposal. They may choose to reject the request and continue mediation, suspend mediation for a period of time, release the parties back to general bargaining or proffer an offer of arbitration. Should they chose to proffer arbitration and either side rejects the offer, a 30 day cooling off period would ensue and at the end of that period, both parties would be released to self help.

Additional Dates Set for United Negotiations

Tentative dates have been scheduled for resumed contract negotiations with United Airlines. The Negotiating Committee is scheduled to meet in San Francisco on Monday, June 14th for a committee caucus, followed by fullday meetings with the company Tuesday, June 15th through Thursday June 17th.

Continental Discussions Continue in DC

Negotiators for the union and company met at IBT Headquarters in Washington this week, reviewing, discussing and mutually passed proposals on Scope. Benefits were also discussed and addressed after the committee met with benefits advisers of the IBT to prepare and compose a counter proposal on this Article.  Through Mediator Iannone, a request was made of the company for the furnishing of some of the benefits information that was requested and not yet received. The company made a presentation regarding the potential merger with United Airlines.  IBT Capital Strategies personnel were present during the company’s presentation. 

Attorney Doug Hall with the law firm of Ford and Harrison will be chairing the committee for the company for future mediation sessions.

The next mediation session is scheduled for the week of June 21st through 25th in Philadelphia, PA.

Week in Review News Items

 Labor Developments

A war of words broke out between British Airways and trade union Unite after negotiations between the two fell apart, signaling that BA’s customers will face up to 15 days of disruptions. Union officials involved in the dispute believe the long simmering believe it could be resolved if CEO Willie Walsh; whom is due to step aside later this year to head the new company created when BA merges with Iberia later this year, would allow the BA’s Chief Operating Officer Keith Williams to conduct the discussions. Williams is due to assume the position of CEO when Walsh assumes the new job. “Mr. Keith Williams is well respected and there is a feeling within the community that we could forge a much better relationship with him. If Keith came to us with a deal, we would be much more likely to accept it,” said Duncan Holley, branch secretary of British Airlines Stewards and Stewardesses Association. “Without Walsh a deal would be much easier to pick up because of the trust involved.”

With no agreement in the latest round of talks, American Airlines and its flight attendants are awaiting word from the National Mediation Board about what will come next. The latest round of mediated negotiations ended Friday night, and the board has not yet scheduled another session between the carrier and the Association of Professional Flight Attendants. American is looking for management employees to volunteer as flight attendants in case its regular attendants go on strike.

Regulatory & Safety 

158 lives perished within no time. The unfortunate event at Manglore airport brings us back to the same question again. Are we safe as fliers in India and how safe are our skies?…Authorities say 10 people suffered injuries, including broken bones, during severe turbulence on a flight from London to Los Angeles that was diverted to Montreal…And the US airline industry won a small but significant victory in its bid to challenge the legality of the EU's plan to apply its Emissions Trading Scheme to non-EU airlines yesterday when the English High Court of Justice said it would refer the case to the European Court of Justice.   

United – Continental Merger

United Airlines and Continental are betting their combined network will appeal to more companies, as demand for business travel rebounds from the 2009 recession…and the CEOs of United and Continental pitched their proposed merger to Senators on Thursday as a good deal for consumers, airline employees and the small communities that rely on them for service…Continental and United said this week that they may seek joint talks with some employee groups in an effort to develop collective bargaining deals before the closing of their planned merger…Despite its obvious reluctance, American needs a merger with US Airways so that it can compete effectively in the transatlantic market, says a veteran airline analyst.

Miscellaneous

Airlines have quietly increased what you'll pay for a flight nearly every day this summer by slapping a surcharge for flying on a "peak travel day." The surcharge ranges from $10 to $30 for each one-way domestic flight and is included in the cost of a ticket…additionally, airlines are increasing what travelers pay to go to Europe by imposing much higher surcharges for fuel than they charged last year. The charges, aimed at helping the airlines offset higher oil prices, are adding $80 to $100 or more to the price of a round-trip ticket to some destinations compared with last summer.