Our View: Airlines Slowly Returning to Profitability Thanks to PSP

Our View: Airlines Slowly Returning to Profitability Thanks to PSP

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Our View: Airlines Slowly Returning to Profitability Thanks to PSP

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Airlines are rebounding. This is due to many factors, not least of which is the taxpayer-funded Payroll Support Program. This legislation covered the wages for airline workers so carriers could keep them on standby for a quick recovery after the pandemic subsides. 

American Airlines reported a net profit of $19 million for the Second Quarter, becoming the second of the “Big Three” airlines to do so. Delta has announced earnings of $652 million in Q2. 

American, Delta, and United all received taxpayer aid intended to preserve their workforces during the pandemic in amounts that exceeded their posted profits.

United Airlines reported a net loss of $400k, falling short of returning to profitability in the second quarter, for a net loss of $1.3 billion. However, United expects to return to profitability sometime during the summer travel season. United has launched aggressive programs intended to dramatically grow the airline, including hiring 25,000 new employees by 2026. 

Delta’s profits of $652 million seem impressive but are almost entirely due to one-off events to raise cash and a taxpayer infusion of $1.5 billion. Without these revenue-boosting efforts, Delta would have posted a net loss in the second quarter of $678 million. Delta is struggling to attract new customers, with passenger counts stuck at around half of pre-pandemic levels.

Delta has shed workers in large numbers despite the massive taxpayer assistance intended to preserve the hard-to-replace airline workforce. 

All of the Big Three airlines accepted billions in taxpayer aid through the Payroll Support Program (PSP), a part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act approved by Congress in March 2020. The funding was renewed in two subsequent COVID relief bills in December 2020 and March 2021. The PSP was designed to keep well-trained airline workers on standby during the pandemic so they do not find other jobs and slow a future economic recovery. All of the Big Three airlines seem to have reduced their workforces and saved those taxpayer-funded wages instead, which they have used to boost cash flow and profits. 

However, Delta is unique because the airline relies more heavily on low-wage, non-union contractors to perform many functions of its operations. These workers have been slow to return to these employers, opting instead for better-paying union jobs at other airlines or in other industries. This slow pace in rehiring is stalling Delta’s financial health. 

American Airlines’ revenue in the second quarter topped $7.5 billion, representing an 87% increase over the previous quarter. As with the other airlines, American was pushed “into the black” by way of PSP assistance. 

Without the PSP support, American would have posted a loss of over $1 billion in Q2. 

Passengers are indeed returning to American Airlines; the carrier has attracted back 70% of pre-pandemic flight loads, accounting for $6.4 billion of the overall $7.7 billion in total revenue accumulated. 

Final Thoughts:
An alliance of unions and airlines backed the Payroll Support Program, arguing that airline workers are difficult to hire and train quickly. A staffing shortage in the airlines would slow any post-pandemic economic recovery, and so these workers needed to be maintained at taxpayer cost until the companies could restart normal operations. Since none of the airlines have returned to 2019 passenger levels, it begs the question as to why chronic staffing shortages are hitting airlines so hard. It seems that the misuse of this assistance is one of the principal driving forces behind airline profits and near-profits in the second quarter of 2021. Lawmakers did not intend for this aid to simply be converted into taxpayer-funded profits. Lawmakers expected this funding to prevent post-pandemic staffing shortages and speed the recovery of commercial aviation and the larger economy, while preventing mass layoffs in the industry. 

The Machinists and Aerospace Union called out airlines for misusing PSP funding and solicited the help of dozens of lawmakers to redirect this critical assistance to the workers it was meant to help. Together, we successfully prevented involuntary layoffs and furloughs, including the involuntary demotion of full-time workers to part-time shifts. The fact that airlines could successfully reduce their staffing levels after accepting PSP funding should not be seen as a failure of our efforts as a union. Instead, it is evidence of how determined they were to take PSP funding for themselves. Our strength and solidarity undoubtedly created the success that we enjoy today. 

Nevertheless, airline profits are not the enemy of airline workers. The return of passengers and potential future profits is a good sign and evidence of the strength of commercial aviation in our nation. This strength, if sustained, promises to yield benefits in time to union members and the United States economy overall.

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Hawaiian Airlines Negotiations Update

Hawaiian Airlines Negotiations Update

Aloha Sisters and Brothers of Hawaiian Airlines,

Last month, we informed you that we were planning a high-level executive meeting between the IAMAW and Hawaiian Airlines the week of July 19, 2021, to discuss the outstanding issues that required more work. These issues included economics, benefits, job security and scope. Although the meeting took place it didn’t bring us to the tentative agreement we had hoped for at the beginning of the week. Only a tentative agreement that recognizes and honors the work you do, and the value that you deliver to this company will suffice under this limited issue, expedited negotiation process.

Although not the outcome we were looking for, we did make enough progress to schedule another session with the goal of reaching an agreement. Once we have confirmed those dates, we will be sure to communicate that to our Hawaiian Airlines members.

In closing, thank you for your support and solidarity. Together, we can secure a great contract on your behalf and avoid the need to enter into Section Six negotiations.

In solidarity,

Mike Klemm

President and Directing General Chair, District 141, International Association of Machinists and Aerospace Workers

Dave Supplee

President and Directing General Chair, District 142, International Association of Machinists and Aerospace Workers

Recording Secretaries: please print and post on all IAMAW bulletin boards

    RELATED ARTICLES

Union Jobs Are Available

Union Jobs Are Available

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Union Jobs Are Available

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According to recent studies, a majority of the 157 million active American workers would like to have a union job. According to a survey by the Pew Research Center, majorities view employee-run associations and unions favorably and see the decline of unions as a worrying trend.

It’s not surprising. Union workers are pretty much the only employees that still have access to an actual pension. Union wages are prized by all employees everywhere, and union members can only be fired for a good reason, not for “any reason or no reason” like everyone else.

But, scoring a union job with union wages, union work rules, and a union pension isn’t easy. Anti-worker laws are rampant and can be very effective in preventing union organizing. Simplifying this process is one reason millions of working people in the US support the ‘Protecting the Right to Organize Act’ (PRO Act). 

Therefore, the quickest and surest way to hold a union job is to get hired at a union workplace.

And unionized companies aren’t hiring. And union workers don’t quit; they retire. So, not a lot of job openings are out there.  

Despite the Payroll Support assistance that Congress gave to airlines to preserve their workforces through the pandemic, airlines have somehow shed so many workers that they cannot operate at 2019 levels. Hundreds of flight cancellations have plagued the industry over the spring and summer, as the virus began to recede and travelers returned to the air. Chronic shortages at major stations, notably Denver, have resulted in significant employee and passenger consternation. 

In response, United Airlines CEO Scott Kirby has announced plans to hire some 25,000 new agents over the next few years. The move will increase the number of union jobs at some of the airlines’ biggest stations, easing critical staffing shortfalls and allowing new growth, including adding about 150 new flights to the winter schedule. 

The new union positions will happen all around the country. The biggest winner is expected to be at Uniteds’ Newark, New Jersey hub, which will add a stunning 5,000 new jobs. Close behind is San Francisco, which will add 4,000. Denver, Chicago, Washington Dulles, and Los Angeles will all see 3,000 new union positions.  

The new union workers will start work under several contracts, depending on their work areas and positions. However, virtually all of them will qualify for eventual top-out wages that soar to over $30/hour. Thanks to a historic agreement between the International Association of Machinists and Aerospace Workers union and United, their jobs will be almost impossible to outsource. They will qualify for flight benefits that allow reduced-cost air travel for them and their families. Importantly, they can become beneficiaries of a true union pension – meaning that they will be getting paychecks for the rest of their lives if they end up retiring from the airline. 

While American Airlines has yet to announce specific plans to add a similar level of new hiring, the company has begun recalling workers who had taken voluntary leave and has already started an aggressive program to attract in-flight crews. This new hiring includes calls to hire and return to work thousands of flight attendants and pilots, all of whom will be union workers. 

The new hiring will add more than $100 million in new union wages for United and American Airlines workers by 2026.

Cover Photo Credit: United Airlines / Inside Photo Credit: IAMAW District 141

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141 Report: The IAM Members Who Train Flight Crews

141 Report: The IAM Members Who Train Flight Crews

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Did you know that IAM members train United pilots and flight attendants?

This highly skilled and specialized group of 150 IAM members design programs and provide training in aircraft systems and emergency procedures for United’s flight crews.

141 Report: The IAM Members Who Train Flight Crews

Did you know that IAM members train United pilots and flight attendants?

This highly skilled and specialized group of 150 IAM members design programs and provide training in aircraft systems and emergency procedures for United’s flight crews. Most of the group is based in Denver, but they also work in facilities in San Francisco and Chicago.

Dave talks to Chip Wilson and Verne Luxemburg, two IAM members of Local 1886 in Denver, Colorado who work as Fleet Technical and Emergency Procedures Instructors. These crafts are covered by the Fleet Technical Instructors and Related Employees Agreement between United Airlines and IAMAW District 141. 

When the interview begins we find Chip Wilson as “captain” of an Airbus A320 on the approach to SFO over the Golden Gate Bridge.

Instructors are specialized in each of United’s fleets. Chip oversees the group that trains pilots on Airbus A319 and Airbus A320 aircraft, while Vern specializes in the Boeing 787. Their training covers “every button, every switch,” besides emergency systems and procedures. 

Chip Wilson, an Army veteran, began working with United in 1992 and has been an Instructor since 1996. When the IAM was elected to represent the group in 1997, he became active as a Shop Steward, and currently serves as Committee Representative.  

Verne Luxenburg has a long history with United and the IAM. Since 1977, he has worked in LAX, LGA, JFK, and Denver Stapleton Airport before he transferred to SAN. He became active in the IAM and served as Committee Chair before rising to Assistant General Chair, a post he held from 2002 to 2010. Verne later became an Emergency Procedures Instructor, training flight attendants throughout the United system, before becoming a Fleet Technical Instructor. 

Brother Verne describes his close call with COVID, after contracting the virus in March 2020. He had to be hospitalized and placed on a ventilator to save his life. Fortunately, he’s made great strides and is back at work, although he has lingering problems that sometimes require him to use oxygen. After not seeing his parents for almost 2 years, he is ready to visit them after he completes his vaccination regimen in August. 

The benefits and job security that the IAM contract provides are “incredibly important,” says Chip. He recalls the furloughs they endured after 9-11 and credits their IAM contract with preventing furloughs “to zero,” preserving positions, and more importantly, the rights to the core work.

United has announced ambitious plans for expansion as we emerge from the pandemic, which is great news for the members of the Fleet Instructors group. “United Next” calls for a historic investment in over 200 new aircraft, and the hiring of over 25,000 new employees to support the new fleet. The company has been hiring Flight Training Instructors during the past year, and brothers Verne and Chip encourage qualified IAM members to apply. 

Tell Your Senator to Pass the PRO Act

Tell Your Senator to Pass the PRO Act

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Tell Your Senator to Pass the PRO Act

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Most American workers want to join a union but can’t. The PRO Act will help fix that.

Nearly 60 percent of American workers would join a union if they had the opportunity to do so. American workers almost universally support pensions that provide a secure income after retirement. Yet, the percentage of Americans with an actual, defined benefit pension is as low as 17%. Meanwhile, according to the Bureau of Labor Statistics, fully 79% of union members do. Union wages and overall compensation for workers in the trades are on par with white-collar jobs that require a bachelor’s degree. Finally, union workers can only be fired for “Just Cause,” meaning that if they show up to work and do their jobs well – they can count on staying employed. Non-union workers, on the other hand, can be fired at any time for any reason. A majority of workers do not want to be fired capriciously.  

So, if the pensions, pay, and job protections that unions (and only unions) can bring are so popular, why is union membership less than 11% of the workforce? Vast majorities of Americans want a pension. Vast majorities want union wages. Vast majorities want their jobs protected by a legally binding contract that they helped negotiate, could vote for, and directly enforce. And vast majorities of American workers have none of these things. What gives?

The answer is obvious. Huge majorities of workers may want to join a union, but they can’t. The PRO Act will allow those who wish to join a union workplace the opportunity to do so. 

The PRO Act will accomplish this, in part, by allowing workers to vote for a union and have their employer recognize that union through a much simpler process. Currently, employees who want to join a union must vote at least twice, and some must vote to join a union over and over again. To make matters worse, the same voters may need to vote by phone one time, by petition another. The rules are different each time, and there are no consequences for employers who illegally interfere with this already fragile process. 

Although the PRO Act applies to the National Labor Relations Act, the changes made will help workers in many industries organize. All workers  – even in the airline industry, are supporting this very important legislation.  (Airline workers fall under the Railway Labor Act which is outside the scope of the NLRA.)

The PRO Act will also protect workers who ask to join a union by bringing accountability to employers who break the law. Current laws do not provide meaningful penalties to employers that violate the rights of their workers and ignore the law.

The PRO Act will end “Right to Work” laws, which seek to bankrupt unions by forcing them to provide services, work, and marketable skills to non-paying consumers for free. The PRO Act will also prevent union members from being forced to pay for political activities they do not support.

 Put simply, existing labor laws are outdated and easily gamed. The PRO Act will modernize American labor law and allow union membership to those who want it, a large majority of workers. 

Union organizing once created the wealthiest and largest middle class that had ever existed. This middle class was union made, right here in the USA. That was no accident. Unions are people that care about the work they do and do it better than anyone else. Unfortunately, since then, anti-worker laws have been written with help from companies whose only goal was to exploit their workforces. These laws did their job and did it well. These corrupt laws have strangled the once-mighty American workforce into a complacent, disposable, and perpetually intimidated group of separated individuals. 

The PRO Act is the most critical labor legislation since the Great Depression. It is a vital part of how our nation will (or will not) rebuild following the Pandemic and nearly a century of neglect.  

The PRO Act is now in the hands of your Senator. Get in touch with them today and tell them how vital American workers are. 

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Primer on Inside Organizing Committees

Primer on Inside Organizing Committees

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Primer on Inside Organizing Committees

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Inside Organizing Committees, often referred to as “Inside Committees” are a key part of organizing a workplace. Here’s a little more information about how they work.

Got Union questions? Call or text a Union Representative at (954) 298-9138. JetBlue Ground Operations workers can authorize a union vote at the Justice at JetBlue page.

Unions do virtually all their work through committees. Typically, committees are formed by the President of the Local Lodge, following rules that are clearly laid out in the Lodge’s By-Laws. Some committees are mandatory, such as the committee that polices company efforts to violate agreements with the union, called a Grievance Committee. 

Other committees are formed to ensure that a particular goal is met. For example, most Machinists and Aerospace Lodges will maintain Retirees, Community Service, and public outreach committees, among others. The President has the authority to form a committee to tackle any task that might arise. 

Committees operate as a team of union members who can agree among themselves on every aspect of the committee. Members will determine when they will meet, how and whether to accept new members and if they will need to raise money to meet their goals. 

WHAT ARE INSIDE COMMITTEES?
This brings us to the Inside Organizing Committee. This committee is unique because it actually has to predate the formation of the union itself. It’s a case of which comes first; the chicken or the egg? Organizing Committees have to form without the structures of By-Laws, without experienced union officers among its members. Inside Organising Committees, called “Inside Committees,” must start before a Local Lodge even exists for that workplace.  

Another unique aspect of Inside Committees is that they may not be made up of union members (yet!). Inside Committees are created from the employees within the organizing workplace itself. These people then work with Union Organizers who are part of a nearby Local Lodge. 

The first people who approach a union organizer are likely to participate in an Inside Committee in some capacity. Sometimes this activity is informal and just consists of offering advice to the organizers. Other Insiders will take a much more active role. These activists will become the backbone of the union at that workplace. Every Local Lodge has high-ranking officers who once served together on an Inside Committee. This is especially true at newer Local Lodges that can still recall what life was like before they were union. Veterans of organizing campaigns will be widely known at their workplaces as a trusted source of union information. Many Inside Committee members will hold elected union positions and permanent committee assignments once a Local Lodge is formed or joined. 

Union Organizers who work for other employers will want to know more about the workplace; Inside Committees are experts on such topics. 

Joining or starting an Inside Committee requires contacting an Organizer. Very often, Inside Committees conduct their operations in secret, especially at the beginning of campaigns. Therefore, an interested party might not know how to contact them directly. The Union Organizers can help get everyone connected without potentially exposing them to company retaliation. Company intimidation is unlawful but remains a concern at some workplaces that do not have experience with a union. 

WORKING WITH UNION ORGANIZERS – PHASE ONE
The first task of an Inside Committee should be to develop a close working relationship with Union Organizers. Organizers can provide you with the tools you need; handouts, union authorization cards, and training. But, they cannot do the actual work of organizing your workplace. No outsider can possibly know the intricate relationships and personal networks at your job as well as you do. As critical as Union Organizers will be, they will depend on you and your Inside Committee to be effective. They are not “in charge.” The Union Organizers are your reinforcements and sponsors and will follow your directives. Their role is to provide you with the tools that you require to run a successful organizing campaign. Remember, your Inside Committee is not a part of a Local Lodge yet. Therefore, you probably won’t have easy access to printers, meeting locations, and office supplies. Your Union Organizers can connect you to a sponsor Local Lodge and ensure that your campaign has access to its assets. 

Throughout the organizing effort, the Inside Committee will be running the show.

THE MISSION OF THE INSIDE COMMITTEE – PHASE TWO
As a member of an Inside Committee, you will discuss workplace issues and concerns with other trusted committee members. You will begin laying the groundwork for the formation of the committee itself. You will decide on meeting times and locations, develop formal points of contact with Union Organizers, and appoint a chairperson. If you have a healthy workplace culture, you may even decide that you want to create a liaison between your committee and management. 

Once you create clear lines of communication with Union Organizers and get plugged into a sponsor Local Lodge, the real work of your committee can begin. Organizing a workplace isn’t easy. As every activist knows, the first thing to do when you need to accomplish something difficult is to get help. 

The second phase of your campaign, therefore, should center around outreach. Your members should find other pro-union workers and develop plans to advance the cause. Ideally, your committee will expand to include representatives from every shift and work area at your station. 

Outreach can include:

  • Social media groups and chat rooms.
  • Casual conversations with coworkers.
  • Posting meeting information on bulletin boards.

As union power grows, you may decide to conduct formal studies of your work area, such as tracking terminations, incidents, and injuries and making this information available. You can also run regular text and email blasts and conduct polls and surveys. 

This work will provide your committee with an unparalleled view of the workforce. You will know what the priorities of your workplace are, what problems may exist, and determine how unification can advance your interests. 

PHASE THREE AND BEYOND: GETTING TO AN ELECTION
To get to a union vote, a majority of your coworkers must authorize it. This is done by petition. Workers sign specific cards called “Authorization Cards.” Once most of your coworkers have signed and return authorization cards, a formal vote will be held to determine if you have successfully organized your workgroup into a union. 

Your committee can get these cards from your Union Organizer. Once they are filled out, you can return them to your organizer, who will deliver them to the Federal Government on your behalf. Organizers will take care of all the legal work using experts who work in other union areas. 

Campaigns like the ongoing effort at JetBlue can also share online links that allow cards to be obtained away from work.  

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