Fellow Pilot,
On September 6, you received a letter from your former MEC Chairman on his final day in office as the EGL MEC Chairman. His letter expressed many concerns, but focused most on recent negotiations at PSA and on ALPA’s response to your company requests for concessions.
I will not respond to his letter point-by-point; however, I feel that it is important for you to understand the Association’s perspective with regards to the future of the regional industry.
It is my belief that our approach should be to always deliberately discuss and understand the world we live in, carefully weigh all the facts and alternatives, and respond thoughtfully and without emotion to ensure that we protect existing work and build career paths for the future of our members.
Today, the Fee-For-Departure (FFD) pilots and their companies are facing intense industry pressure similar to that faced by legacy pilots in the last decade following 9/11. The external factors present during that period resulted in downward modification to collective bargaining agreements. Mainline contracts are returning more closely to an appropriate standard for pay, benefits, work rules and job security provisions.
Prolonged economic downturn, consolidation, high fuel prices, and an increased focus on capacity discipline has led mainlines to constrain affiliate capacity, focus on larger more fuel efficient jets, and reduce the overall costs they pay to FFD carriers. This includes an increased focus on FFD pilot block hour costs. With stagnation in the industry increasing longevity costs at some carriers, there is a wide disparity in pilot block hour costs.
The economic factors listed above, along with an increase to the regulated retirement age, have limited career growth opportunities as well as slowed hiring. This resulted in increased longevity among FFD pilots during the past 10 years. At some airlines — Eagle and Endeavor (formerly Pinnacle), for example — higher average longevity has been one of the biggest cost drivers in those contracts. Pilot longevity also played a huge role in making Comair financially uncompetitive.
While actual Year 15 rates between two carriers may only be as little as 2% apart, one carrier will have much higher average longevity than the other and this longevity component can raise pilot block hour costs from approximately $275 to $350 per hour.
Consider these current realities:
· Mainline carriers are now re-equipping their FFD affiliates where large capital expenditures are needed.
· We are in a bargaining cycle where overcapacity exists and mainline airlines have choices over where to allocate this flying.
· Mainline carriers don't need our help to achieve lower block hour costs; they can achieve this simply by using existing lower cost partners to do the flying.
I’m confident that consolidation at FFD carriers, an improving economic picture, and more fuel efficient and larger jets will improve our negotiating leverage in the next few years. We will again be in a stronger bargaining position in the near future, just like at mainline carriers and like the robust and favorable bargaining during FFD negotiations between 1999 and 2004.
Normal turnover, increased hiring at mainline carriers as a result of increased number of retirements, and new hiring at the regional level, will eventually lower longevity costs. But what do we do in the meantime? We have tough choices to make about how to protect our members’ work at existing carriers, and where necessary, to provide soft landings for pilots at FFD carriers that may not survive rather than force fellow pilots to start over at the bottom of someone else’s seniority list. We also need to continue to pressure the brands to take more responsibility for their affiliates as well.
ALPA pilots have never been afraid of tough choices or hard work to protect our profession. We discuss the issues, weigh the pros and cons, and make decisions that are deliberate and thoughtful rather than emotional.
FFD carrier representatives gathered a few weeks ago and again last week to discuss these issues, and they'll meet again in November to make collective decisions. As always, they will have the support of my office and the Association’s resources to carry out their mission.
Fraternally,
Capt. Lee Moak, President