Dark Thoughts

March 1, 2005
The airline shakeout

It's not been a happy time in our business of late. I work with some retired US AIRWAYS (nee Piedmont Airlines) folks. Although retired, they are bleeding as they watch their old company self-destruct just as I did after I left Eastern Air Lines. They will now join me in getting their pension from a government agency as their pension plan too was "underfunded." So the Ruminations are a little darker than usual. I feel like an old crow squawking in a tree.

I have now been working in the airline industry for some 51 years. In that time I have never seen so much internal turmoil and such a significant split between the workers who toil on the ramps, in the hangars, stockrooms and shops with the companies that employ them.

It is sad to see for, although there are certainly different motives driving the two groups, ultimately, the welfare of the employees depends on the well-being of their employer. Or as one of the good old boys I worked with said, "You don't get much milk from a skinny cow." The sight of unions belaboring companies losing billions in a year would almost be funny were it not so tragic.

Compounding the problem of course is the unmitigated greed of some of the modern mold of managers who wildly expanded and inflated expectations while systematically pillaging the company's assets and employee's pension plans. To boot they took care of themselves. This destroyed all the credibility of the companies when they later came to the employees and asked for sacrifices. It gave ammunition to some short-sighted leaders in the labor unions who used it to inflame their members to resist any changes.

There was never doubt in anyone's mind where the old-time airline founders stood. Many were pirates but they were competing against each other for routes and business. Captain Eddie Rickenbacker of Eastern may have been a tight fisted, cantankerous SOB but everyone knew he was out to grow the airline for the long term and make it profitable and those that could contribute to it would stay for the ride knowing that their payoff was an assured pension. The other mighty moguls of the industry were the same giving their all to building an industry we now see collapsing around us. They may have gotten rich but we, the employees reveled in our pass privileges, vacations, sick leave and other bennies. And let us be honest too, there were some really cushy jobs that resulted from some work rules that unions had wheedled out of soft-headed management folks.

I saw many a gray-beard filling those jobs by virtue of seniority. They had entered a different type of early retirement. And why not you say? After years of working the ramp putting chains on tractors outside in the middle of a blizzard, baking in an engine nacelle in the hot sun or being rained on and blown around in a storm we felt we deserved a chance to get into an air-conditioned shop and drink coffee while we complained about how the company was screwing us. At least it seemed okay until the company started competing against the new spawn of a deregulation that were lean and mean and staffed with young, eager types who had not been through the mill. Unfortunately, the dinosaur "legacy" carriers are struggling hoping they can learn to compete before they run through all their cash, assets and loans. Their employees are bewildered and feel robbed of their "legacy" of job security and benefits.

Once upon a time I was laid off from a major repair station where I had worked for almost ten years. They had lost some major contracts and, although it certainly wasn't my fault, out I went. But lo, I got a mechanic's position with a major airline and knew that, unless I was a total screw-up, I was secure for my working life. Well, that was in 1964 and it seemed like that then. What could go wrong? I left in 1986 having worked myself up to a directors position when I saw what the new breed of owners were going to be. Since then I have hopped, skipped and jumped faring better than many and now sit in an air-conditioned office writing tech procedures and manuals. But I don't complain about how the company is screwing me. I look at the regular paycheck, note the company name printed on it and give thanks I can still contribute.

How all this will shake out is unclear. I remember attending an ATA conference some years back where American's Bob Crandall was the keynote speaker. He was foretelling a brutal future where the industry was expecting there would be only five major carriers surviving. He was holding up his hand but only three fingers were up. I am not sure what he would say now.