November 6, 2009 Newsletter

Airline Division News Items

NMB Proposes Change in Representation Voting Rule

The National Mediation Board wants to make it easier for thousands of airline and railway workers to unionize under the Railway Labor Act by seeking to junk a 75-year-old election rule, according to a proposal published Monday in the Federal Register.

The move comes after a White House appointment shifted the balance of the government agency's three-person board. Linda Puchala, a former flight attendant union leader, was selected to replace Read Van de Water, a former Northwest Airlines lobbyist, earlier this year. She joined Harry Hoglander, a former pilots union leader appointed in 2002. The NMB regulates labor relations in aviation and rail.

More than 570,000 workers are employed by railroads and airlines, more than two-thirds of whom already are unionized. But changes to the election rules could affect thousands more workers. Delta Air Lines Inc., the world's largest airline, and Continental Airlines Inc. are awaiting unionization votes that would affect about 40,000 workers.

The new policy could mark a significant victory for unions.

Under an interpretation of the Railway Labor Act dating to 1934, aviation and rail workers who don't vote on whether to create a union are counted as "no" votes. That means a union cannot be approved without a full majority of all employees voting yes.

Under the National Labor Relations Act governing other industries, a union can be created as long as a majority of all votes cast are in favor of collective bargaining. In such elections, nonvotes don't count.

Under the proposal made public Monday, which is subject to a 60-day comment period, the NMB would tally votes for air and rail workers in the same way as those other industries. "Few if any" democratic elections treat nonvotes as no votes, the NMB said in the proposal.

Railways, and airlines such as Delta and Continental, strongly oppose the measure. The Air Transport Association, an umbrella group for airlines, said Monday that Congress, not the NMB, has the authority to overhaul the rule.

"This reform lets workers choose a union the same way they choose the president of the United States," said Teamsters General President Jim Hoffa. "Whichever side gets the most votes, wins."

Continental Says Merger with United Still Possible

Continental Airlines hasn't ruled out a merger with United Airlines and would again pursue a deal to become the world's largest carrier if the current No. 1, Delta Air Lines, proves a formidable competitor, Continental President Jeff Smisek said Tuesday.

For now, Houston-based Continental prefers to remain independent and focus on its new partnership with Chicago-based United and other members of the Star Alliance, the global marketing consortium that Continental joined last week, Smisek said in an interview with Bloomberg television.

"We are watching Delta to see whether Delta outperforms us financially," said Smisek, who will become Continental's CEO at year's end. "To date they have not done so. They've gotten bigger, they've gotten more complex, but they haven't gotten profitable."

The Teamsters Airline Division represents mechanics at both United and Continental.

Teamsters Reach New Contract with ABX

Following more than four years of frustration and futility, Teamsters Local 1224 and ABX Air, Inc. reached a tentative agreement for a new collective bargaining agreement on November 5. Pending the membership’s ratification of the proposed agreement, the flight crewmembers of ABX Air will have attained success in securing one of the best contracts in the industry. Negotiators were able to avoid a distressed termination of the pension plan and preserve it to the fullest extent, secure a disability plan that provides solid protections for disabled crewmembers, obtain increased scope protections, retain health insurance for retirees and maintain an above industry-standard hourly pay rate. For our furloughed crewmembers, Local 1224 was successful in obtaining an outstanding furlough/severance plan that will provide our members with far greater economic protections than what was originally offered.

NMB Continues to Mediate UPS and Teamsters Contract Negotiations

Representatives from UPS and Teamsters Local 2727 which represents approximately 1,200 UPS airline mechanics, met this week in Minneapolis, Minnesota with federal mediators from the National Mediation Board, in an effort to complete the parties’ collective bargaining negotiations. NMB officials indicated that progress was made in the form of tentative agreements on a number of open issues. Several matters remain outstanding, however, and the NMB scheduled another week of mediation starting on January 5, 2010. If the parties are unable to reach an agreement that week, the NMB will schedule additional mediation sessions, depending on the parties’ schedules for the 2010 calendar year. In the meantime, the parties are operating under the terms of their existing collective bargaining agreement and are each prohibited by law from engaging in any economic activities such as strikes, slowdowns and lockouts. IBT Airline Division Director David Bourne expressed his confidence that the parties will be able to complete their contract negotiations through the NMB’s mediation services, stating that “the parties will be able to work their way through the mediation process and at the end of the day I am sure we will reach a fair, amicable agreement. We will make every effort to reach an agreement at the next NMB session in early 2010, and I am hopeful that we will be successful.”

Teamsters Open New Section 6 Negotiations with PLH Aviation Services

As an indication of the broad reach of crafts represented by the Teamsters Airline Division under the RLA, a Section 6 notice was sent to PLH Aviation Services to initiate negotiations for a new contract for fuelers. PLH Aviation Services Inc. is a wholly owned private corporation specializing in into-plane refueling operations. Stationed at international and regional airports across Canada and in Los Angeles, PLH has a proven track record to provide safe, quality and cost effective fueling services to airlines.

Week in Review News Items

Labor Developments

Organized labor appears to be gaining the upper hand in the skies and on rails, as labor and business battle for influence under the Obama administration. The National Mediation Board wants to make it easier for thousands of airline and railway workers to unionize under the Railway Labor Act by seeking to junk a 75-year-old election rule, according to a proposal published Monday in the Federal Register. The Association of Flight Attendants-CWA union has withdrawn its bid to seek a union election for more than 20,000 workers at Delta Air Lines, citing the proposed U.S. rule change that it said would result in a fairer balloting process. Pilots at Southwest Airlines overwhelmingly have approved a five-year agreement with the Dallas-based carrier, five months after rejecting an earlier offer. British Airways' cabin crew met this week at Sandown Park Racecourse in Surrey to discuss possible strike action. The meeting was called by Unite, the union which represents the majority of BA's 14,000 cabin crew. And five years after retiring from Japan Airlines, former pilot Tsutomu Watanabe is fighting to protect the pension he was promised but that the airline can no longer afford to pay.

Regulatory & Safety

Two safety critical issues arose this week, in reports about a Qantas 767 descending too low with its wheels up as it approached Sydney last Monday, and about the informal relationship between Qantas and CASA and shoddy foreign maintenance. They raise again the question as to whether the public administration of air safety in Australia is going to be reformed promptly, or after a major crash? The Cityflyer incident , which occurred on a Melbourne-Sydney 767 appears to be unprecedented in a modern jet airliner in terms of triggering a Ground Proximity Warning System alert telling the pilots, who have been stood down, that they were flying the jet too close to the ground without the wheels down. A federal study of the increase in the mandatory retirement age for commercial pilots to 65 has concluded there is too little information to determine the safety impact of that decision. Passengers' growing appetite for electronic gadgets and WiFi access is creating problems for airlines eager to sate that appetite. The challenge lies in enforcing myriad company policies and federal laws covering wireless communications.

Airline Industry Finances

The world's leading airlines were able to raise USD$8 billion in new cash from capital markets in the past two months, but their full-year outlook remains worrisome, IATA said on Tuesday. In its latest industry snapshot, the IATA said it still expected airlines to lose USD$11 billion on a net basis in 2009 and warned that with jet fuel prices on the rise, cash flows would be under pressure. Most of the largest U.S. airlines have increased a surcharge for travel on the busiest travel days to $20 each way, up from $10. The surcharges apply to a large number of flights within the U.S. on more than a dozen peak days around holidays including Thanksgiving, Christmas and New Year's. British Airways has reported a loss before tax of £292m for the six months to the end of September, as business class passenger numbers continue to drop. It is the first time BA has posted a loss in the first half of its financial year, reports the BBC.

Miscellaneous

Continental Airlines is in the throes of major changes?it has just joined Star Alliance from SkyTeam and in January a new ceo Jeff Smisek takes over?Continental hasn't ruled out a merger with United Airlines and would again pursue a deal to become the world's largest carrier if the current No. 1, Delta Air Lines, proves a formidable competitor, Continental President Jeff Smisek said Tuesday?Irish budget airline Ryanair sent a fresh warning to Boeing over a large order, saying it could curb its once unstoppable growth as limits emerge in its quest for cutting costs.