Negotiations Come As Industry Reels In Declining Economy

An economic recession which has brought 75,000 layoffs at US airlines is providing a tough environment for airline union negotiators. USA Today reports many unions are currently engaged in their first contract negotiations since the troubled post-9/11 days, and had hoped to regain wages and benefits lost during that troubled time.

Talks have already begun -- or are about to get underway -- at United, Continental, US Airways, AirTran, Southwest and Alaska Airlines.

American Airlines has failed to reach agreements with its unions in talks dating to last year. American's pilots union has threatened disruption of the schedule, and the union representing mechanics and baggage handlers have run ads calling out airline executives for their stock bonuses.

Over at United, talks with its pilots will soon resume for the first time after a contentious November 2008 court ruling, that said members of the Air Line Pilots Association broke the law by organizing a sickout of their own. United claims the sick-out cost the carrier $8 million in lost revenue, and $3.9 million in operating profit

"United's executives rewarded their shareholders, their banks and themselves," says Captain Steve Wallach, chairman of United chapter at ALPA, regarding the latest round of talks. "Pilots' expectations are high."

One analyst suggests that one way for airlines to tie employee compensation more closely to the performance of the companies would be a compensation plan featuring modest base pay, plus bonuses when a company prospers.

Despite its faint resemblance to recently-controversial executive compensation plans at financial institutions, Washington-based consultant and former airline exec Jerry Glass tells the paper both sides would be better served.

"In an industry like this that's always under pressure, it's a common-sense approach," Glass said.

FMI: www.alpa.org, www.aa.com, www.united.com