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By Adam Bryant
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Like millions of other travelers, Mark Mangelsdorf headed home for Thanksgiving last week. His 6 a.m. flight from Los Angeles to Chicago went smoothly, but a flashing message stood between him and a short-hop flight to his parents' house in South Bend, Ind.: delayed due to mechanical. But Mangelsdorf, who eventually had to board a bus to get to South Bend, wasn't buying the excuse. The engineer was convinced that the cause of his delay was labor tension--United's mechanics have been flexing their muscle of late by delaying flights. "I just wish they would solve the problem,'' says Mangelsdorf. "It stinks."
United won't comment on specific flight problems, but Mangelsdorf isn't the only customer fuming these days. Traveling amid the crush of 20 million passengers around the Thanksgiving holiday is always difficult, but this year the odds of getting home on time grew much longer. Labor unions are pressing for big raises on a number of fronts, and passengers are getting caught in the middle. Mechanics at Northwest and United, as well as the pilots at Delta Air Lines, have been applying their leverage by causing an unusually large number of delays and cancellations of flights in the last two weeks. Rarely has the labor tension been so widespread. "This industry has been marked by single-missile hits of labor-management tension, but here we have a multiple-warhead missile," says Joseph Blasi, a professor of labor relations at Rutgers University.
The airlines are sending off some pre-emptive strikes of their own. Fearing a nightmare holiday weekend, United and Northwest unveiled a potent legal tactic recently. Both made unusual trips to court to obtain orders blocking the unions from disrupting flights through work slowdowns. "We will do what it takes to protect our customers from actions that hurt them," said Andy Studdert, United's chief operating officer, articulating the industry's new get-tough stance. Delta Air Lines just fired off a letter to its pilots union, saying that it had learned of "substantial discussion of a potential job action'' among pilots, and warned that actions like widespread refusal to fly overtime and sick calls would be considered illegal. Turning to the law to enforce work rules does little to put a smile back on the face of customer-service employees, but airlines have found such steps necessary to counter the formidable leverage of its labor groups. With union saber-rattling escalating, additional trips to the courthouse are likely in the coming months.
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At the root of this bitter new air war is a serious case of envy. United's pilots won an eye-popping new contract in August that provides an immediate raise of more than 20 percent, plus annual 4 percent raises through 2004. The sharp jump helped make up for lost time. United's pilots had taken a 15.7 percent pay cut in 1994 in exchange for stock as part of the employee buyout of the airline. But the stock has sagged of late and the pilots wanted cash this time round. They pressured the airline this summer by refusing to fly overtime, leading to the cancellation of about 20,000 flights. The tactic proved a highly effective negotiating tool: a new pilot at United can expect to earn about $12 million in total compensation over a 30-year career, according to Kit Darby, a United captain who runs a pilot career-counseling service on the side.
Other unions are now striving to grab their share of the industry's record profits. United's flight attendants, as well as its mechanics, are agitating for a raise. Delta's pilots are following suit. Northwest's mechanics are seeking to more than double their pay, and have made other demands that Northwest executives call "wildly unrealistic.'' Everyone is trying to hurdle the high bar set by the pilots who fly the friendly skies. "United has gotten everybody's attention,'' says Gregg Overman, a spokesman for American's pilots.
It's no coincidence that pilots kicked off this round of big raise demands--they have long set the pace and tone for the industry's labor negotiations. Pilot unions have from their earliest years negotiated carrier by carrier, raising the bar each time in a strategy informally known as jacking up the house one corner at a time. But this strategy was hit by turbulence with the arrival of deregulation in 1978, and airlines turned to their flyboys for concessions to help stem heavy losses. They are now seeking payback. At Delta, for example, the pilots recently calculated their concessions were worth about $1 billion over four years. They now want a contract that is worth about 8 percent more than the United pilots' deal. In addition, pilots generally feel they're more important to a successful airline than management, and that they should be compensated accordingly. "Without the pilots, there would be no seats flying around,'' says Chuck Giambusso, head of the Delta pilots union. They also have another bargaining chip. There is a general shortage of aviators in the industry, partly because the military is training fewer of them. Says George Hopkins, a professor of history at Western Illinois University who's written three books about pilots: "Pilots are right now in the best position they have ever been in the history of the industry, and they're in a race to the top."
But there are few win-win situations in the airline industry. In the early 1990s the major carriers were pummeling each other in a bruising battle for a bigger share of the market. With too many seats chasing too few customers, travelers made out like bandits, zipping around the country with dirt-cheap fares and free companion tickets. The airlines put an end to their strategic blunders, though, and have been able to steadily raise fares and profits. Now unions feel like it's their turn to enjoy the good times. In coming months, travelers will likely be reminded who's really in the driver's seat in this industry.
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