Labor expert Ken Margolies, senior associate at The Worker Institute at Cornell University’s ILR School in New York City, explains the layoff situation with American Airlines. The airline may soon lay off as many about 800 workers at John F. Kennedy Airport, and perhaps as many as 11,000 nationally.
Margolies says:
“The current labor situation at American Airlines must be viewed in the context of deregulation of the airline industry and the changes it brought to the industry. Before deregulation the industry was very stable, the workforce was one of the most unionized in the country and labor relations were generally peaceful with some exceptions.
“Deregulation changed the economics of the airline industry eventually leading to companies demanding and getting large concessions from the unions representing their generally and/or relatively well-paid workforce.
“At American Airlines, unions were enraged by management giving themselves bonuses and salary increases following years of compensation cuts for everyone else. In negotiations, which started approximately four years ago, unions sought to recover some of the concessions in pay and work rules they agreed to in past negotiations.
“The pilots took the most militant position demanding, ‘Restore and more’ meaning they wanted all the pay cuts and other compensation concessions restored plus they wanted raises. This would mean very large increases in compensation.“Labor relations then and now are covered by the Railway Labor Act, which is designed to prevent strikes. Negotiations under the RLA traditionally take many years – and during that time American Airlines filed for bankruptcy and also began talks with USAir about a merger.
“Mergers in the airline industry are particularly complicated because of the need to merge seniority lists for pilots. Seniority is used for choice of scheduling, routes and aircraft. So pilots can have their compensation affected greatly by a change in their seniority relative to other pilots. Efforts to merge pilot seniority lists in other airlines, especially at USAir, have been notoriously difficult and acrimonious.
“Pilots are the only union on the American Airlines property that has not reached a labor agreement with management. As a result, American Airlines management has used – what it believes is its right under their bankruptcy protection – to move to impose changes to the pilots’ contract.
“A factor that may be both a cause and result of the labor strife between the pilots and the airline is the internal politics of the pilots union. The leadership of the pilots union has changed at least twice since bargaining started, most recently only weeks ago.
“Claiming that they cannot continue to operate without cutting costs the airline has announced layoffs. It is possible that this is a tactic to pressure the pilots to reach agreement on a labor contract. However, they are closing some facilities affecting other unions – more than pilots – so it is not solely a tactic.
“Layoff notices are required by the various contracts before layoffs can happen. A notice may or may not actually result in a layoff. Because workers who receive a layoff notice have rights under their contracts to take jobs of less senior employees management issues many more notices than the number of layoffs they intend to make.”
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