{"id":14109,"date":"2012-05-08T17:07:35","date_gmt":"2012-05-08T21:07:35","guid":{"rendered":"http:\/\/cfif.org\/v\/freedom_line_blog\/?p=14109"},"modified":"2012-05-08T17:07:35","modified_gmt":"2012-05-08T21:07:35","slug":"big-labor-attempts-to-commandeer-american-airlines","status":"publish","type":"post","link":"https:\/\/cfif.org\/v\/freedom_line_blog\/14109\/big-labor-attempts-to-commandeer-american-airlines\/","title":{"rendered":"Big Labor Attempts to Commandeer American Airlines"},"content":{"rendered":"

Big Labor is at it again.\u00a0 This time in the airline industry.<\/p>\n

As you\u2019ve probably heard, US Airways has proposed a merger with American Airlines<\/a>, and the latter\u2019s labor unions have eagerly pursued contract agreements with their potential new employer.\u00a0 A benevolent effort meant to expedite the process?\u00a0 Hardly.\u00a0 Rather, it is a hasty, thinly-veiled act of desperation. \u00a0Instead of allowing American\u2019s bankruptcy restructuring process to run its natural course, and a stronger airline to emerge, American\u2019s unions have acted in a manner that can only serve to muddle and complicate the situation.<\/p>\n

Here\u2019s the critical fact to keep in mind: American Airlines reached its current predicament due primarily to its onerous labor costs<\/a>. \u00a0Its industry-high labor costs, representing fully 28% of its revenue, led to bankruptcy.\u00a0 Now, however, its unions seek to repeat that futile process by pursuing similar deals with US Airways.\u00a0 It defies history and economic reality to believe that a new merger under similar conditions would create such a magical synergy allowing the new contracts to be sustained for a lasting amount of time.<\/p>\n

On top of that, successfully integrating two separate workforces into one can be a logistical nightmare.\u00a0 After all, US Airways itself has yet to fully integrate the new employees it acquired with its 2005 takeover of America West Airlines.\u00a0 Pilots from both carriers have engaged in an ongoing dispute<\/a> over seniority and pay scales, and to this day US Airways and America West essentially operate as two separate entities, with US Airways pilots only flying US Airways planes and vice-versa.\u00a0 How could repeating that scenario be expected to create sudden synergies or cost savings? \u00a0What evidence is there that this union-proposed takeover might play out differently?<\/p>\n

Make no mistake \u2013 we at CFIF don\u2019t maintain any inherent antipathy toward mergers.\u00a0 We do, however, recognize the pitfalls and dangers of mergers suspiciously pursued and negotiated by union bosses.\u00a0 The unfortunate reality is that this appears to be yet another example of Big Labor pursuing its own interests at the expense of the rank-and-file employees it claims to represent.<\/p>\n

By way of historical background, the airline industry has changed rapidly over the years due to rising fuel costs and other market forces.\u00a0 Countless carriers have restructured union contracts or merged with competitors to reduce costs and remain in the market.<\/p>\n

American Airlines stands as the lone exception.<\/p>\n

American has never merged with another airline, and until this year it had never filed for bankruptcy.\u00a0 As a result, its unionized employees have enjoyed arguably the best salaries and benefits packages in the industry.\u00a0 And in an ironic bit of history, US Airways has itself gone through several bankruptcies over the years, and even frozen or terminated pensions and many of the types of benefits they\u2019re apparently ceding to American\u2019s labor unions in hopes of a quick deal.<\/p>\n

We live in economically uncertain times, in which the cushy union contracts of old have become outdated and fiscally unsustainable.\u00a0 The fact that American, once the nation\u2019s model airline, is bankrupt is itself evidence of how challenging it has become to operate in the industry.\u00a0 Big Labor knows this well.\u00a0 After all, it represents a significant percentage of the industry workforce.\u00a0 Sadly, however, it refuses to learn the straightforward lessons of recent history, and instead continues to demand unreasonable contracts that will put the longevity and viability of airlines at risk. \u00a0In so doing, shortsighted union leaders place their own survival above that of their members.\u00a0 They concern themselves primarily with replenishing their coffers and pursuing political victories financed by union dues.<\/p>\n

That imprudent approach may benefit the union leadership in the near term.\u00a0 But in the end, it proves to the detriment of average unionized American Airlines employees, as well as customers due to the reduced long-term viability of a bloated, union-controlled airline.\u00a0 The alternative is to allow American the opportunity to right the ship and carve out a new, mutually-beneficial agreement with its employees.\u00a0 Concessions will need to be made by both management and labor, and it will necessary for American Airlines\u2019 bankruptcy proceedings to run its course.<\/p>\n

The Big Labor alternative to repeat the unsustainable cycle will merely prolong the misery at the expense of employees and consumers.<\/p>\n","protected":false},"excerpt":{"rendered":"

Big Labor is at it again.\u00a0 This time in the airline industry. As you\u2019ve probably heard, US Airways has proposed a merger with American Airlines, and the latter\u2019s labor unions have eagerly pursued contract agreements with their potential new employer.\u00a0 A benevolent effort meant to expedite the process?\u00a0 Hardly.\u00a0 Rather, it is a hasty, thinly-veiled […]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[3524,932,3223,1051,3525],"class_list":["post-14109","post","type-post","status-publish","format-standard","hentry","category-posts","tag-american-airlines","tag-bankruptcy","tag-merger","tag-union","tag-us-air"],"_links":{"self":[{"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/posts\/14109","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/comments?post=14109"}],"version-history":[{"count":2,"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/posts\/14109\/revisions"}],"predecessor-version":[{"id":14111,"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/posts\/14109\/revisions\/14111"}],"wp:attachment":[{"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/media?parent=14109"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/categories?post=14109"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cfif.org\/v\/freedom_line_blog\/wp-json\/wp\/v2\/tags?post=14109"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}