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June 26,
2004: Love has
returned to Soutwest Airlines. The Contentious contract negotiations between
SWA and their Flight Attendant Union, is finally settled. New
6-year contract and both sides claim they are happy.
June 26, 2004: US
Airways pilots are willing to take another 12.5% pay cut, and fly
10% more hours per month, to meet SWA competition. "The airline has yet to begin negotiations with
the unions that represent flight attendants, baggage handlers,
mechanics and other airport workers. US Airways had said it hoped to
cut $295 million in pilot costs and $263 million in mechanics' wages."
June 25, 2004: UAL
will have to find at least another $700 million to $1 billion in cost
savings, before
investors will risk their capital to take the beleaguered airline out
of bankruptcy, say airline analysts.
June 24, 2004: UAL
loses $93 millon in May, but has operating profit of $9
million. High fuel
costs, and Free-Market competiton hit hard. Employees may be
required to dig deeper, if the airline is to survive. The airline
is now projecting its next-year fuel costs to be $750 million more than
orginally anticipated.
May 10, 2004:
UPDATE - Fantastic News!! The daugher of Captain Al
Haynes has had her bone marrow transplant and it was
successful! http://www.friendsforlauri.com/
Jan. 05, 2004: Austrian Airlines
Fokker 70 belly landed in a snowfield, two kilometers from Munich
airport.
Only 3 minor injuries among the 32
onboard. It is not clear if both engines failed.
Jan. 03, 2004: The
year 2003 --- Safest year in airline history.
"Only 25
commercial airliners crashed in fatal accidents in 2003, by far the
lowest number in modern aviation history, according to the Aviation
Safety Network, a Netherlands-based independent organization that
tracks plane crashes."
The average, for the years
1973 thru 2002, has been 50 fatal accidents world-wide per year.
The 70s average was 61, the 80s average 53 and the 90s average
48. Since 2000, the world average has been 33.
"The United States
suffered two fatal airline accidents in 2003: an Air Midwest flight on
Jan. 8 that crashed in Charlotte, N.C., killing 21 people, and an Aug.
26 crash on Cape Cod that killed two crew members."
A total of 677
passengers and
crew died in fatal airline accidents in 2003, the 3rd lowest total
since WW II. Fatalities per mile are the lowest ever, because far
more people are flying far more miles. In comparison, highway
fatalities in the U.S. average about 820 per week.
Jan. 03, 2004: A
chartered 737 crashed into the Red Sea.
Mostly French
tourists, flying to Cairo from the resort of Sharm
el-Sheikh, in Egypt. No survivors of the 148 onboard.
"The Egyptian authorities have said the crash
was an accident apparently caused by a mechanical problem. Mr
Shafiq said the Boeing 737 had climbed to more than a 1,000 metres
(3,000 feet), veered off course and plunged within seconds into the Red
Sea. There was no distress call from the plane to the control
tower."
Jan.
01, 2004: UAL
Business briefs.
"United
seeks court OK for $30M settlement. United Airlines and
a group of flight attendants are seeking
bankruptcy-court approval of a $30 million settlement of a class-action
lawsuit, the attendants union said in a bulletin to employees. In the
case, female attendants accused United of gender
discrimination for requiring attendants to meet certain weight
requirements from 1980 to 1994. Female attendants were subjected to
tougher standards than male attendants, the plaintiffs argued.
The new leader of United Airlines' pilots union says
he wants the more than 2,100 furloughed United pilots to get their jobs
back. Capt. Mark Bathurst, who takes over
Thursday,
said in a statement that the union 'will do everything in our power to
return all of these pilots to our cockpits as soon as possible.'"
Jan. 01,
2004: Pension
funds falling further behind, even with last years stock market
adding $100 Billion.
"If
all of
America's 500 largest companies -- including Akron's Goodyear Tire
& Rubber Co. -- had to make good on their promises to workers and
retirees immediately, they would have to plug a $259 billion gap in
their pension funds, according to a study by Standard & Poor's that
will be published soon....Companies
expected to owe big pension contributions in the next two years include
the Ford Motor Co., Delta Air Lines, American Air Lines, ChevronTexaco,
Delphi, DuPont, Hewlett-Packard, Halliburton, and Goodyear Tire &
Rubber Co. For some, such as Goodyear, scraping together the cash will
be very difficult."
Dec.
31,
2003: Southwest
Flight Attendants report "No Progress" in contract talks.
"Southwest is the largest U.S. airline to remain profitable through the
recession and terror attacks of 2001, and union leaders say workers
deserve pay raises. They also want to be paid for time they spend on
the ground cleaning planes. Flight attendants for most airlines are
paid only for time the plane is flying.
A Southwest
spokeswoman said flight attendants deserve a raise, but airline
officials have also said the carrier needs to maintain its cost
advantage over rivals."
Dec. 30,
2003: Judge
rules against US Airways in pension funding dispute.
U.S. Bankruptcy judge Stephen
Mitchell upheld a $2.1 billion
government claim against US Airways by the Pension Benefit Guaranty
Corp. US Airways terminated the pilots retirement plan in
bankruptcy, but it remains to be settled how much the airline will
actually pay to reimburse the PBGC, who took over the plan as a last
resort government insurer. The pilots are still unlikely to
recoup more than pennies on the dollar of the terminated plan.
Dec.
30, 2003: Northwest
ALPA chairman still opposed to Reality.
ALPA chairman, Mark McClain, refuses to
mention the word "concessions." He prefers the phrase "investment
agreement," when discussing the possibility that the
pilots will agree to short-term sacrifices. McClain said he
remains "opposed
to the concessionary package Northwest management unveiled last
winter."
NWA-ALPA leaders refused to acknowledge an imminent
financial crisis existed at NWA, in spite of the severe passenger
decline after the
9-11 attacks. As the airline continued its financial hemorrhage,
ALPA leaders took months to analyze the airline's condition, even with
928 pilots on furlough.
Dec. 30, 2003: U.S.
to require Marshalls on foreign flights.
Selected flights to comply or they will be cancelled, says Homeland
Security. Some cargo flights may be included as terrorists might
think them easier to take over than passenger flights.
Dec. 30, 2003: UAL
to copy the successful CAL cash bonus plan for its employees.
"The new program's cash rewards
will amount
to a certain percentage
of workers' pay. The flight attendants' union said on its Web site that
attendants could make bonuses that amounted to as much as 10 percent of
their annual wages. Separately, in 2005, United will launch a
profit-sharing program."
Dec.
27, 2003: Captain
Al Haynes fighting to save his daughter's life.
Haynes was the captain of UAL 232, that crashed landed at Sioux City in 1989, following the loss of all 3
hydraulic control systems after the center engine exploded. He was left
with only asymmetrical engine thrust, to control the movements of
that DC-10. Haynes and his fellow pilots managed to save 185 lives by
keeping their heads and using to best advantage what options they had
left.
``My wife
died in 1999, my oldest son was killed in a motorcycle
crash (in 1997) and now this is coming up with my daughter. So we're
having our share of bad luck; but we learned a long time ago that it
doesn't do you any good to cry about it. You just do what you can and
deal with what you have.''
Now, he is trying to save the life of his
39-year-old daughter who needs a bone marrow transplant. Although
she had insurance, the company refused to pay for the alleged
experimental procedure.
For those who would like to help, go to: http://www.friendsforlauri.com/
or write to the National Foundation for Transplants in behalf of Laurie
Arguello: NFT for Laurie Arguello, P.O. Box 7781, Covington WA 98042
Dec.
25, 2003: A chartered
UTA 727 crashed after striking a building, during takeoff at Benin
Africa.
The
rear of the plane impacted the building and then crashed into the
ocean, off the Cotonou Airport. UTA, said 253 people were
on board. At least 24 people survived the crash, Transport
Minister Ahmed Akobi (search) said. Some suspect the plane
was heavily overloaded.
Dec. 23, 2003: Will
the high debt load still sink American Airlines?
During the last three years, while AMR's
unions refused to cut featherbedding costs until the verge of
bankruptcy, the airline was busy racking up an additional $8
billion in debt. That is in
addition to
AMR being liable for "$10.4 billion in pension payments, capital
spending programs and debt that's due through 2006....Too many airlines are
competing for too few passengers, experts say."
Some analysts doubt AMR will be able to survive, with the millstone of
union-fostered debt hanging about its neck.
22,
2003: ALPA
blocked random alcohol testing for British pilots.
"The revelation comes after a Virgin Atlantic pilot was arrested in
Washington on Friday, shortly before he was due to fly across the
Atlantic, and charged with trying to fly a plane while under the
influence of alcohol.
The flight's 383 passengers returned to Britain
yesterday, 26 hours late....Only a month ago, a BA pilot and a first
officer resigned rather than
face disciplinary action for allegedly drinking before take-off....in
spite of protracted negotiations, the British Airline Pilots'
Association (Balpa) has steadfastly rejected the idea of random
testing. It argues that "peer pressure" - encouraging employees to
report on each other - is a sufficient control.
Damian Green, the shadow Secretary of State for
Transport, said he was
"astonished" by Balpa's stance. 'It's vital that public confidence be
maintained so that those who put their lives in the hands of the pilot
know that safety is absolutely paramount. BA has said it does not
want to impose random testing against the
wishes of employees. But critics argue that the airline is more
concerned about the possibility of industrial action.'"
Dec.
18, 2003: Fed Ex crashes at Memphis.
"Preliminary information is that at approximately 12:30 p.m. Central
Standard Time, the right main landing gear of the FedEx MD-10-10
(N364FE) collapsed on landing on runway 36R at the Memphis
airport. The aircraft, which was arriving after a flight from
Oakland, California, came to rest and suffered extensive fire
damage. All seven crewmembers aboard the aircraft escaped without
serious injury. There were no reported hazardous materials on the
plane." Curt Lewis, PE, CSP WEB: www.fsinfo.org
Dec.
18, 2003: Winners
do not rely on government. Why do some companies fail?
Because they ignore the demands of the marketplace.
"Mostly, they did not listen to their
customers. Detroit, for
example, produced family cars that consumers did not want. Airlines
continued to think that their high-margin business customers would
indefinitely pay five to 10 times their cheapest fares. ...they
stuck to inappropriate business models. Airlines
persisted with a full-service model when the market was demanding a
low-cost, no-frills model. Integrated steel companies failed to
recognize the impact of "minimill" technology and carried on with a
business model that was not competitive.
They also failed to meaningfully alter their cost
structure. Like
monopolists, they thought that they could pass uncontrolled labour
costs to their customers. They acquiesced to the demands of unions
and entered into contracts that now thwart their ability to
rationalize their operations. Even in bankruptcy, these obligations
become a hurdle to reorganization. These industries relied on
government to bail them out of their
difficulties.
The lessons are tragically simple. An industry that
is highly
reliant on government is doomed to be another financial basket case.
Winners do not rely on government."
Dec. 18, 2003: UAL
again applies for Federal loan guarantees of $1.6 Billion.
It is likely that Continental Airlines will again lobby against the
Federal Loan Board approval. Despite competitor's
opposition, UAL thinks the guarantees will be approved this time,
because it has obtained $ 2.56 Billion per year in wage and benefit
concessions and "...has identified $5 billion in cost savings
through 2005..." UAL recently received "commitments from J.P.
Morgan Chase and Citigroup
for $2 billion in exit financing, which the airline would obtain once
it secures the federal loan guarantees and emerges from bankruptcy."
UAL sought for Congressional waivers to allow
stretched-out payments on its pension obligations, but the Senate
adjourned without taking up the House approved bill. I.R.S.
approval is also needed.
Dec. 17, 2003: It's
Final! Boeing will build the 7E7 at the Everett
facility.
Though it will mean a total of about 18,000 Boeing jobs in Everett,
that is down from a high of 30,000 in 1997. If Boeing had decided
to move to another state, the Everett jobs would have declined
significantly more. Increased productivity, plus reduced state
and local taxes, was crucial to keep production in Everett, if market
share was not to be further eroded in favor of Airbus. High
productivity and low taxes are the key to prosperity for all.
Politicians and union leaders need to get that
message....................
Dec. 17,
2003:
US Airways unions target management.
Union leaders refuse any more concessions with the current management
team. They might be willing to try and compete with Southwest's
cost structure, if new management comes in. That way, the union
leadership can continue to claim it is all management's fault, not
their own resistance to productivity increases.
"Airline analyst Bob Mann Jr. said the
disadvantage to US Airways'
relatively quick emergence from bankruptcy is that the concessions from
labor didn't go far enough."
Dec. 17, 2003: 100
years today, but Wright Brothers Re-enactment falls short.
A replica craft was unable to get off the ground and "sputtered into
the
mud."
Dec. 17, 2003: Will Boeing
locate the 7E7 plant in the South?
The Southern Right-to-Work states hold great reduced-costs appeal,
since unions cannot thrive without the use of force. Workers do
not tend to join, where they have a legal choice not to. To keep
from losing market share to Airbus, keeping production costs down is
crucial to Boeing's 7E7 plans.
Dec. 15, 2003: Air
Malta forced to bite the bullet----ridding itself of
featherbedding rules.
"This is another misconception which exists
in this country. Some
people believe that if you have a structure that was valid 10 years
ago, then it has to be valid today. The airline industry has changed
dramatically over the past years. We know that all major airlines are
carrying out extensive restructuring tasks and we are no exception. The
real problem at Air Malta, compounded by the investment in Azzurra Air,
is that the core business on a recurrent basis has been running at a
loss for several years.
If Air Malta is to survive we have to change our
method of
operation and we cannot afford to have a higher cost base than that of
our competitors. So the challenge for Air Malta is going back to
profitability by changing the whole structure from top to bottom."
Dec.
14, 2003: Northwest
ALPA now willing to consider concessions---NWA has lost $1.3
Billion since 2001.
"Northwest ALPA
said Friday night it would consider concessions if the plan also
included some sort of investment by pilots in the airline."
Does that mean they want to follow that same ESOP path to disaster,
which Dubinsky imposed on UAL in 1994?
- Hegel was right when he said that we learn from history
that man can never learn anything from history. [George Bernard
Shaw]
-
- Those who cannot remember the past are condemned to repeat
it. [George Santayana]
Dec.
14, 2003: Militant
Unionism would destroy Singapore Airlines, say Labour Chief.
SIA
has 5 unions, and the other 4 would be forced to adopt ALPA's militant
style, if ALPA leaders were allowed to get away with their
revolt. That would destroy SIA and the govt. will not let that
happen.
"'As of Sept. 30, Northwest reported more than $7.4
billion in long-term
debt, an increase of $888 million since Dec. 31, 2002,' Anderson wrote.
'While you might read or hear that Northwest has nearly $3 billion in
cash reserves, it pales when compared to our total debt, which by any
standard is much too big. The vast majority of our cash reserves is
either borrowed or committed.'"
Dec.
12, 2003: US
Airways threatened by efficient competition of Southwest
Airlines.
Fares in a Metropolitan area typically fall by 30% when Southwest moves
in. Could that indicate the other union airlines still have
too much featherbedding fat in their contracts? If not, then they
won't have any difficulty making a reasonable profit, with a 30%
reduction in their fares, will they?
Dec.
12, 2003: Ray
Lahr takes the Govt. to court, alleging a coverup in the TWA 800
report.
"On
Monday, Dec. 15, retired United Airlines Capt. Ray Lahr takes his case
against the National Transportation Safety Board to court, the last
adversary this unlikely activist ever expected to face.
Lahr
has no illusion about the challenge he faces, but he is focusing his
attack on the most vulnerable point of the NTSB's defense what he
calls "the zoom-climb scenario" and he has marshaled some impressive
forces to help breach it.
The
government first advanced this scenario six years earlier Nov. 18,
1997, to be precise. That was the day that the FBI closed the criminal
case on TWA Flight 800 and did so in a dramatic fashion. It was also
the day that forever changed Lahr's life.
To
negate the stubborn testimony of some 270 FBI eyewitnesses who had
sworn they saw a flaming, smoke-trailing, zigzagging object ascend, arc
over and destroy TWA Flight 800 off the coast of Long Island, the FBI
showed a video prepared by the CIA."
Dec.
12, 2003: Court
Awards costs for passenger rage diversion.
Finally, a court rules the offending passenger has to pay the full
costs, associated with his bad behavior.
Dec.
12, 2003: Guns
in the Cockpit: How a bureaucracy can frustrate the
intent of a law overwhelmingly supported by most Americans.
Why
so few pilots carry guns in the cockpit. Because the bureaucrats
think they know better how our lives should be lived, as usual.
Dec.
10, 2003: Privatization
of Airports, Air India and Indian Airlines,
is the key to low-cost transportation for the masses. Unions are
opposed, of course, for the usual reasons. "The high cost of air
travel is currently a deterrent to an expansion of
air traffic as compared to the popular no frills airlines' operating
in Europe and South East Asia which have been catering to a big surge
in tourist traffic."
Dec. 10, 2003: UAL
close to $2
billion in financing commitments from major
banks.
J.P. Morgan Chase & Co. and Citigroup Inc. willing to risk $ 400 M
of their own money, if govt will guarantee $ 1.6 Billion. UAL cash growing by $7 million per
day. A year ago, under the old union contract featherbedding
rules, it was losing about $7 million per day.
Dec.
9, 2003: Comair
and ASA commuter pilots want their airlines to merge.
Strenghtened ability to resist concessions---ALPA
strategy. The Comair 89-day strike of 2001, nearly
destroyed the company. Comair's pilots are the highest paid of
all commuter pilots.
Dec.
9, 2003: The
Sorry State of the airline industry.
"Despite putting in billions
and billions of dollars, the net return to
owners from being in the entire airline industry, if you owned it all,
and if you put up all this money, is less than zero..." [Warren Buffet]
Dec.
8, 2003: Japan
refuses to buy the A380 Jumbo Airbus.
Without Japan,
profit on the A380 is remote. The British Govt. may not recapture
its "soft loans" of £500m.
Dec.
8, 2003: The
Anemic Airline Industry
Compared
to the automobile industry, "commercial aviation leaves much to be
desired."
Dec. 7, 2003:
Singapore Government's
no-nonsense approach in
dealing with ALPA.
The govt. not about to allow ALPA to inflict major
economic damage to get their way.
Dec. 7, 2003: Delta
Airline Strategy to move to smaller jets and lower costs.
DAL has
shelved most of the orders for big jets, and has spent almost $1 billon
on RJs.
Dec. 6,
2003: Turmoil
at ALPA-Singapore
Singapore pilots fire their leaders, claiming they
gave in too easily.
Dec. 6, 2003: UAL's emerging from
Bankruptcy depends on more
cost cutting and
pension reform.
Unit costs are now "best
in class," says James
Sprayregen, the airline's lead
bankruptcy attorney. But some analysts say until they can get
costs as low as Southwest, survival is not assured.
Dec. 5, 2003: Delta
Pilots finally decide to negotiate some concessions.
DAL pilots are the highest paid in the
industry and account for 1/3 of labor costs at DAL. True to ALPA
"strategy," they have resisted realistic concessions, while their
employer continues to suffer large losses.
Dec. 5, 2003: Boeing
employees and politicians bow to Market Forces to get 7E7
production.
A $3 billion tax incentive from
the Washington state Legislature, helped to keep 7E7 assembly in
Everett. But, allocating high-cost union jobs to foreign
suppliers, was also necessary to make it work. Less than 1/3 of
the 777 workers will be on the Boeing-Everett production of the
7E7.
Dec. 4, 2003: Union
Irrationality has led to loss of many jobs.
NWA has rejected Mesaba Airlines, because of pilot
union obstinacy,
and replaced them with Pinnacle, a Mesaba competitor. NWA pilots have also been
resisting concessions.
Dec. 3, 2003: Northwest
Airlines rejects low-fare alternative.
They have refused the Southwest
Airlines and JetBlue
models, even though those airlines have been
consistently profitable, while union airlines with featherbedding
contracts, have been hemorrhaging for years.
Dec. 2, 2003: Qantas
also moving to the low-fares, greater market share, concept.
"Travellers will reap a bonanza of
cheaper seats next year as Qantas's
new low-cost airline hits the skies, but unions fear it may be on the
back of reduced conditions and wages for the airline's workers."
Dec. 1, 2003: ALPA-S
warned to cool it or heads will be broken. ALPA
slow-down tactics won't be permitted.
"Senior Minister Lee Kuan Yew has
warned Singapore
Airlines' pilots that if they threaten the nation's survival or the
fundamentals which have helped it prosper, heads will be broken....
Mr Lee recounted how SIA pilots once kicked up a fuss over the
type of seats they were allotted for rest-breaks, at the expense of
passengers....Mr Lee said: 'Pilots believe they are special, they got
huge egos, I am
told. We know that if we allow this to go on, there will be a go-slow,
there will be work-to-rule and we will get the Cathay Pacific
situation....'Now you can have that in Hong Kong, but you are not going
to have that in Singapore."
Nov. 28, 2003: Olympic
Airways forced to abandoned its high-load factor route to
Australia.
"Financially troubled Olympic withdrew from
Australia last year because crew layovers on the twice weekly flights
made it too expensive to run....'When we decided to stop it wasn't due
to lack of passengers,' Mr Mavrikis said. 'Olympic Airways had
one of the highest load factors over the kangaroo route: over 80 per
cent. The problem was we could not control the costs - the costs
were astronomical.' Olympic is in a final
stage of restructuring
before privatisation and is in the process of negotiating layoffs and
improved work practices with unions." Nov.
27, 2003: Contingency
for Air Canada's survival from bankruptcy.
Victor Li's offer to be an equity
partner, to the tune of a $650-million investment, will require
"aggressive productivity
gains and cost-cutting measures..." That means unions can no
longer dictate wasteful work rules or above market wages, if they want
jobs to survive.
Nov. 21, 2003: House
passes bill to allow airlines to
defer pension payments.
If
Senate agrees, 80% percent of payments due for next two years could be
deferred.
Nov. 20, 2003: UAL
has operating profit of $60 M for October.
In spite of having to pay retro wages of
$63 M to IAM union members, it now has $7 M per day positive cash
flow. One year ago, UAL was hemmorhaging millions per day, with
its union featherbedding contracts in force.
Nov. 18, 2003: Pension
Funds underfunded by $400 billion, according to some experts.
"Many pensions have been impacted by the
downturn
in the stock market," Ms. Blonskij said. "Pension funds - and the union
members who depend on them - need to act and take steps that will
ensure pensions for their members when they retire. Too many people are
simply closing their eyes to this problem and hoping that it will go
away."
Could it be that the kind of outrageous greed,
exhibited by the UAL-ALPA pilots and imposed with an extortion process
in their last Dubinsky contract, had a lot to do with making it
impossible for UAL to make the necessary contributions to those pension
funds?
Nov. 18, 2003: UAL
to launch Ted, but can it be profitable with UAL's relatively high
labor costs?
"United officials say Ted will be
profitable, but critics say United's
relatively high labor costs, combined with Ted's low fares, may hobble
the new carrier." UAL may discover, that until its
union workers are as productive as Southwest's, it will not be able to
match those competitive low fares, and still produce a profit.
Nov. 17, 2003:
Status of wage givebacks at big five carriers:
"Delta Air Lines is mostly non-union except for its ALPA-represented
pilots, but they make the highest pilot wages in the industry and have
given nothing back so far."
Nov. 17, 2003: RYANAIR PROVES ETF TELLS LIES!
(PRESSI.COM 11/17/2003) Ryanair,
Europe's largest low fares airline today (17th November
03) disproved the false allegations in the ETF press statement of 3
Nov last, and at a press conference today in Charleroi confirmed
that Ryanair's terms & conditions are the best of any short
haul airline in Europe. Speaking today in Charleroi, Ryanair's
Director of Inflight, Eddie Wilson said:
The ETF if it is unhappy about the
policy of Ryanair and the
choice of Ryanair people not to be represented by unions, then they
should at least advance truth and not resort to lies. In responding
to the lie published by the ETF, Ryanair and its employees wish to
confirm the following facts;
1. Average pay in Ryanair is among the
highest of any airline in
Europe and significantly greater than the average pay at many flag
carrier airlines including British Airways, Lufthansa and Air
France among others.
Ryanair 50,582
easyJet 41,384
Lufthansa 41,377
Aer Lingus 38,929
British Airways 37,602
Virgin Express 34,386
2. As many of Europe's leading
unionised airlines including
Sabena, Aerolloyd, SAS have either gone bankrupt or laid off
workers in recent years, Ryanair has offered these people better
paid jobs, in a more secure environment, enjoying better terms and
conditions.
3. All of Ryanair's employees qualify
for share options in the
company and a pilot joining Ryanair in 1997 has generated a profit
of almost 300,000 from his/her share options in Ryanair, whereas a
member of cabin crew has generated profits during a similar period
of over 75,000.
Ryanair continues to observe and
respect the right of all of its
employees to join trade unions, but it also respects the rights of
those employees to continue to negotiate directly through their own
elected representatives on issues of conditions and pay.
Nov. 16, 2003: Airline
Unions aren't the only ones suffering from intense non-union
competition.
Union food market workers in Southern
Califonia face Walmart competition. Steel and auto workers have
lost jobs to their international competition. Communication
workers with the telephone giants now facing severe competition from
new technogies. To survive, the old featherbedding rules must go.
Nov. 15, 2003: Japan's
help essential to Boeing 7E7 success. Heavy union presence at
Boeing makes its costs too high if all production is done
in-house.
"If you went back 10 or 15 years ago, it
would have been considered
sacrilege to outsource components such as the wing," said Peter Jacobs
of Seattle-based Ragen MacKenzie. "But given today's environment and
the changing competitive landscape, Boeing doesn't have a lot of
choices."
Other countries, Japan included, can do the
work more cheaply than Boeing can, Jacobs said.
"If Boeing limited itself to building a lot
of the components in
house, it would not be able to build the plane at the price that it
needs and the plane would not be built or it would fail in the
marketplace," Jacobs said.
Nov. 14, 2003: Ottawa had role in Air
Canada's pension flop.
"Air Canada, like a lot of companies,
began the decade with a flush
pension plan. At the end of 2000, the fund was $749-million in the
black. The airline did what hundreds of other companies did. It took a
contribution holiday and stopped putting fresh cash in the pension
plan. A bear market intervened to crush investment returns. Air
Canada's
registered pension funds lost $92-million in 2001 and a terrifying
$572-million in 2002, causing OSFI to ring the alarm and demand a cash
infusion that helped tip the airline into bankruptcy protection in
April....
But the truth is the federal government actually
encourages such
behaviour, with tax laws that deny the deductibility of pension
contributions when a company's pension plan is too far in the black.
Ottawa is afraid of losing a little corporate tax revenue, so it
effectively forces companies such as Air Canada to stop funding
pensions when surpluses are large."
Nov. 13, 2003: DAL
net worth plunging.
"Delta Air
Lines says its fourth-quarter loss will be as much as $415 million... first time Delta's debt and
other liabilities have exceeded
its assets since it became a passenger airline in 1929...After Sept.11, Delta initially
had stronger financial performance than most other
big carriers because of its less-unionized work force and more flexible
operations, including a large fleet of regional jets that allowed it to
adjust to falling demand....In the third quarter, several large
airlines reported profits, but Delta, US Airways and United had
losses....Discounters
Southwest, AirTran and JetBlue are expected to remain profitable."
Nov. 13, 2003: Northwest
seat-mile labor costs the third highest.
"Northwest's
labor cost per seat mile flown an industry benchmark was 3.8 cents
in the third quarter that ended in September.... Delta came in at
4.5 cents; US Airways, 4.2 cents. Among those with lower costs than
Northwest were American at 3.7 cents; United and Continental, 3.4
cents; Southwest, 3 cents; America West, 2.2 cents; and JetBlue, 1.9
cents....Northwest has lost
about $1.4 billion since the start of 2000....But it's been
nine months since Northwest told its unions that workers need to
provide about $1 billion in annual wage and other givebacks to make the
carrier competitive in today's industry....Unions for Northwest's
pilots and ground workers say they've yet to
talk seriously about money in their contract talks. Pacts for the
mechanics and flight attendants don't come up for negotiation until
2005. And those unions have signaled that they have no intention of
opening up their contracts for concessions."
"The situation at
Northwest and in the industry is still dynamic,'' said Air Line Pilots
Association spokesman Will Holman. "Historically, negotiations take
about 18 months and issues like pay are discussed in the later stages.
So far, we've only discussed rescheduling, reserve issues and several
letters of agreement."
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