Good Plan . . . Bad Timing: Northwest vs. AMFA

Aircraft Mechanics Fraternal Association, American, America West, Continental, Delta, Federal Aviation Administration, JetBlue, National Transportation Safety Board, Northwest, Southwest, US Air Info: Stephen Prentice takes a look at the recent...


The Northwest Airlines strike by AMFA mechanics and the com-pany bankruptcy filing follows a predictable pattern from past history.

History

Back in the late ’80s the mechanics at Eastern Airlines went on strike after prolonged negotiations. Eastern filed for bankruptcy shortly afterward. Bankruptcy did not help Eastern simply because it was a poorly managed airline to begin with. It had no coherent plan for its recovery, so the whole thing went down the drain with more than 10,000 employees including of course mechanics.

Now Northwest and Delta have filed, each on the same day. They had to get this done before Oct. 17, when new rules would kick in making bankruptcy more complex. It will become difficult for company executives to collect retention pay after the new rule. The new rules also require that the bankrupt emerge from bankruptcy proceedings within 18 months. By filing early the executives at both airlines protect their money (not mechanics) and at the same time the companies can stay in bankruptcy for as long as they want. Look for more filings on or before that date.

US Air and America West, both in bankruptcy, (US Air’s second) recently completed their merger. Imagine that, two losers, weakened again by mismanagement, joining together to form one big loser. How long do you think this will last? American, Continental, and Southwest are still hanging in there, but will time tell? We’ll see. American and Continental recently announced a profit in the last quarter.

I wonder who figured that creative accounting?

Oh by the way, all the stockholder shares in a bankrupt airline like US Air become worthless. So the pension fund of the Retirement System of Alabama, which financed the company’s first bankruptcy reorganization in 2003, lost all their dough, (excuse me, their investors’ dough) some $243 million according to reports. Don’t you think that the managers of that fund should be looking for new jobs? What kind of hanky-panky was involved there? Who in their right mind would invest other people’s money in a bankrupt airline?

PSA Model

JetBlue seems to be the only one that figured out how to do it by following the Southwest model. Then again George Soros has great resources. Southwest’s model was copied from Pacific Southwest Airlines (original PSA), even down to the aircraft paint scheme). PSA’s Kenny Friedkin got the idea in the late ’40s with DC3-4’s and in the early ’50s was in business hauling passengers like a bus, as he called it, between SAN, LAX, and SFO. He continued expansion with Lockheed Electras in 1959-60 and later B727-737 and MD 80’s. In the ’60s we flew from SAN to SFO for $22 and it took only 55 minutes in Electras. Now it takes one hour and 20 minutes in Boeings and costs a fortune. Go figure. His plan was simply to sell tickets like a bus at the airport counter. Your ticket stub was your boarding pass. There were no computers in those days and your ticket came out of a familiar large cash register. What a plan, how simple. The big boys were still writing tickets by hand. So much for the history lesson.

AMFA

The mechanics at Northwest (NWA) are represented by AMFA, the Aircraft Mechanics Fraternal Association. This is no small organization. It represents the mechanics at Northwest, Alaska, American Trans Air (ATA), Horizon Air, Independence Air, Mesaba, Southwest, and United. The national director, Mr. O.V. Delle-Femine, runs a tight ship and has the total confidence of his members. Its first local was at Northwest and the rest followed because they were doing a good job for the rank and file. Many believed that the legacy unions sort of forgot who they were representing and were just too close to management.

One writer recently called the current fight … “a stubborn union against a management determined to survive … ” This guy was all wrong! It was suggested by another, more accurately that … “it is a struggle by mechanics determined to survive against a management who never really wanted to bargain.”

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