State of the Unions
Unions Gird for Smaller Airline Industry
- Sara Nelson, president of the Association of Flight Attendants, spoke online with Skift founder Rafat Ali last week. She said 2020 was supposed to be the year that airline crews recaptured concessions they gave in earlier rounds of contract negotiations. But while acknowledging that the current crisis makes that difficult in the short-term, the union and its members will not accept another long-term “ratcheting down” of pay, work rules, and benefits. Job cuts, she concedes, might be necessary given the inevitable fact that airlines will be smaller post-crisis.
But Nelson wants to ensure that most of these job losses are voluntary, accepted by workers nearing their retirement, for example, or uncomfortable about flying while the virus is still a threat. She accused Delta (whose flight attendants have long refused to a join a union) of violating the federal CARES Act by cutting work hours involuntarily. Nelson was a key player in supporting passage of the CARES Act, which she said saved the U.S. airline industry from collapse. She wants Washington to provide additional aid going forward, to avoid mass layoffs after CARES Act job protections expire this fall.
- A dispute over furloughs is threatening to get more contentions as British Airways moves ahead with plans to lay off as many as 12,000 employees. Under British labor law, the company has to meet with union representatives in order to make the cuts, but the Unite and GMB unions have said these meetings are impossible due to the ban on large groups during the country’s shelter-in-place order.
The unions say they may take the airline to court to force a “meaningful consultation.” In a scathing letter to IAG’s board, Unite General Secretary Len McCluskey wrote, “BA’s plan to use the worst health crisis in a century to strip loyal workers of their terms and conditions is a betrayal of workers and of Britain.”
- Delta is planning for a smaller future, one that CEO Ed Bastian warned about several weeks ago. The carrier is offering voluntary early outs to employees close to retirement age or who have 25 years or more of service. A second voluntary separation package would be available to all employees. The carrier has begun talks with its pilots — who are unionized, unlike the majority of Delta’s employees — for concessions and separation packages. The voluntary opt-out packages would include cash severance, healthcare, and flight benefits. Employees can apply for the programs on June 1, with retirements beginning Aug. 10.
- In his letter to employees, Bastian applauded the U.S. government for stepping in with state aid to airlines, noting that Latam declared bankruptcy because of the absence of aid from the countries where it operates. The CARES Act prevented that in the U.S., but Bastian warned that without voluntary separation, the carrier may have to resort to involuntary furloughs. “While we never dreamed just a few months ago that we would be talking about a smaller Delta — this was expected to be a year of growth, after all — this is the reality we are facing,” Bastian said.
- American is also planning for a smaller future. In a letter to employees, Elise Eberwein, executive vice president of people, said cost-cutting measures so far have not gone far enough. Although 39,000 American employees have taken voluntary leave or early retirement, the company says that management and corporate staff will be reduced by 30%. The carrier is asking for voluntary separation before it begins restructuring “all levels” of the company, and before it starts to restructure front-line workgroups. If not enough employees take voluntary separation, the company will begin layoffs, which would go into effect on Oct. 1, after the CARES Act funding (and its stipulation to maintain staffing levels) expires. “We must plan for operating a smaller airline for the foreseeable future,” Eberwein wrote.