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Airline Bankruptcies, Mergers, and Profits Provoke Unions
E ntering bankruptcy protection is as common for airlines the last few years as entering drug rehab is for contemporary pop stars. The only difference is that airline owners leave the “treatment center” flying higher than ever. After all, experience demonstrates bankruptcy provides ample opportunity to dump pensions, rewrite collective bargaining agreements, and renegotiate debts.
The results of these concessions are undeniable. The airline industry reported a 534 percent profit increase from 2005, soaring to $2$3 billion in profits for 2006. The employer-controlled Air Transport Association expects 2007 to be “even more promising, with a projected profit of approximately $4 billion….”
Of course, the employees are left to “bottom out” on their own. Prominent union financial analyst Dan Akins estimates workers have suffered reductions in wages and benefits totaling $11 billion from 2002 to 2005.
So while workers are in the dumps, the airlines are on Cloud 9. Statistics confirm that the enormous concessions imposed by bankruptcy courts were based on deceptive business plans with inflated labor costs and underestimated assets.
T he Association of Flight Attendants (AFA) at Northwest Airlines understands this. It recently filed a brief challenging Northwest’s reorganization plan, arguing that it was “now obsolete.” In its brief the union demonstrated that the pre-tax 6.5 percent profit margin originally anticipated by the bankruptcy court for 2010 is now expected in 2007. The AFA-CWA also documented that most other economic projections submitted to the bankruptcy court last year by Northwest are already being exceeded. The same criticism could be made of U.S. Airways and United Airlines, both of whom walked out of the bankruptcy court with deep pockets.
In addition to dramatically lowered labor costs, increased fares, and a record number of passengers stuffed into each aircraft also account for these profits. Now Wall Street is circling the skies looking for wounded quarry. It smells big money from more mergers and acquisitions or from the old staple of pumping up ticket prices. Prey or predator, United Airlines, American, Continental, Delta, Northwest, and U.S. Airways have all been the subject of speculation by ravenous investors.
After receiving a steroid dose of new capital when recently acquired by America West, for example, U.S. Airways has made two unsuccessful offers for Delta in the last months. They even upped their most recent offer in February by 20 percent. Delta’s creditors committee rejected both offers, largely because they believe they can profit better flying solo after their planned bankruptcy exit in April 2007.
U.S. Airways is also in hot water with five senators. The senators recently sent a letter to the Pension Benefit Guaranty Corporation asking them to invoke their statutory authority and “explore the possibility of restoring the terminated employee pension plans at U.S. Airways, in light of the airline’s substantially improved financial circumstances.”
The senators objected to U.S. Airways bidding $10.2 billion to purchase Delta, including $5 billion in cash, after previously defaulting on their employee pension plan, under-funded as it was by $4.8 billion.
The persistent stalking of Delta by U.S. Airways put the spotlight on the grotesque irony of an airline going on a Rodeo Drive-style buying spree only a short time after burying the pensions, benefits, and wages of thousands of employees. Other carriers are subject to the same criticism.
Delta management is also the target of some controversy. Ground employees recently formed a union organizing committee right in the heart of the staunchly anti-union carrier’s main Atlanta hub. It’s not surprising as Delta’s non-union ground workers have fared far worse than their union counterparts at other bankrupt airlines, dropping to “second or third from the bottom in pay” among over 20 U.S. carriers, according to the organizing committee’s Deltaramp.blogspot. com website.
Historically non-union, Delta urges workers to “Keep Delta My Delta.” But what does that mean when Delta’s “reorganization plan” calls for eliminating 7,000 to 9,000 jobs by the end of this year. The carrier’s pro-IAM ramp workers have a better idea: “Make Delta Our Delta.”
Experts still believe mergers and acquisitions will take off. But with increased public scrutiny and worker discontent on the rise, don’t expect the flight to be as smooth as originally expected.
Carl Finamore is president of the IAMAW Air Transport Local Lodge 1781.
Z Magazine Archive
HUMAN RIGHTS - The U.S. Human Rights Network will celebrate its 10th anniversary with the Advancing Human Rights 2013 Conference, December 6-8, in Atlanta, GA.
Contact: 250 Georgia Avenue SE, Suite 330, Atlanta, GA 30312; firstname.lastname@example.org; http:// www.ushrnetwork.org/.
AFRICAN/SOCIALIST - The Sixth Congress of the African People’s Socialist Party USA will be held December 7-11, in St. Petersburg, FL.
Contact: 1245 18th Avenue South, St. Petersburg, FL 33705; 727- 821-6620; info@aps puhuru.org; http://asiuhuru.org/.
SCHOOLS - The Dignity in Schools Campaign (DSC) will host a workshop on the DSC “Model Code on Education and Dignity: Presenting A Human Rights Framework for Schools” at the Mid-Hudson Region NY State Leadership Summit on School Justice Partnerships, December 11 in White Plains, NY.
Contact: http://www.dignityin schools.org/.
ANARCHIST/BOOKFAIR - The Humboldt Anarchist Book Fair will be held December 14, in Eureka, CA.
Contact: humboldtgrassroots @riseup.net; http://humbold tanarchist bookfair.wordpress. com/.
CLIMATE - The World Symposium on Sustainable Development at Universities is hosting a follow-up event to the 2012 Rio de Janeiro symposium. The gathering will be held in Qatar on January 28-30, 2014.
Contact: http://environment.tufts. edu/.
LABOR - The United Association for Labor Education (UALE) will host Organizing for Power: A New Labor Movement for the New Working Class in Los Angeles, March 26-29. Proposals are due December 15.
Contact: LAWCHA, 226 Carr Building (East Campus), Box 90719, Duke University, Durham, NC 27708-0719;lawcha @duke. edu; http://lawcha.org/.
MEDIA FELLOWSHIP - The Media Mobilizing Project is seeking applicants for the first annual Movement Media Fellowship Program. The Fellow will work with MMP to produce the spring season of Media Mobilizing Project TV. MMPTV is a news and talk show that tells the stories of local communities organizing to win human rights and build a movement to end poverty.
Contact: 4233 Chestnut St., Philadelphia, PA 19104; 215-821- 9632; milena@media mobilizing.org; http://www.media mobilizing.org/.
RACE - The 7th Facing Race: A National Conference will be held in Dallas, TX November 13-15, 2014. Organizers, educators, artists, funders and everyone interested in racial equity is invited to exchange best practices and learn about innovative models and successful organizing initiatives. Proposals must be submitted by January 24, 2014.
Contact: Race Forward, 32 Broadway, Suite 1801, New York, NY 10004; 212-513-7925; media @raceforward.org; http://race forward.org/.
VETERANS - They Were Soldiers: How the Wounded Return from America’s Wars - The Untold Story, by Ann Jones, is about the journey of veterans from the moment of being wounded in rural Afghanistan to their return home.
Contact: Haymarket Books, PO Box 180165, Chicago, IL 60618; 773-583-7884; http://www.haymarketbooks.org/.
LIBYA - Destroying Libya and World Order: The Three-Decade U.S. Campaign to Terminate the Qaddafi Revolution, by Francis A. Boyle, is a history and critique of American foreign policy from Reagan to Obama.
Contact: Clarity Press, Inc., Ste. 469, 3277 Roswell Rd. NE, Atlanta, GE 30305; 404-647-6501; email@example.com; http://www. claritypress.com/.
CHILDREN - Fannie and Freddie by Becky Z. Dernbach is about two bumbling villains who gamble away the savings of the people of Homeville.
Contact: fannieandfreddiebook @gmail.com; http://fannieand freddie.org/.
PROTEST/COMIC - Fight the Power!: A Visual History of Protest Among English Speaking Peoples, by Sean Michael Wilson and Benjamin Dickson is a graphic narrative that explains how people have fought against oppression.
Contact: Seven Stories Press, 140 Watts Street, New York, NY 10013; 212-226-8760; info@ sevenstories.com; http://www. sevenstories.com.
CHILDREN - Brave Girl by Michelle Markel and illustrated by Melissa Sweet is the true story of Clara Lemlich, a young Ukrainian immigrant who led the largest strike of women workers in U.S. history.
Contact: http://www.harpercollins childrens.com/Kids/.
FESTIVAL - The 2014 Queer Women of Color Film Festival will be held June 13-15 in San Francisco. The festival is currently accepting submissions until December 31.
Contact: QWOCMAP, 59 Cook Street, San Francisco, CA 94118-3310; 415-752-0868; firstname.lastname@example.org; http://www.qwocmap.org/.
IRAQ/REFUGEES - Ten years after the U.S.-led war in Iraq, thousands of displaced Iraqi refugees are still facing a crisis in the United States. The Lost Dream follows Nazar and Salam who had to flee Iraq in order to avoid threats by Al- Qaeda-affiliated groups and Iraqi insurgents that consider them “traitors” for supporting U.S. forces in Operation Iraqi Freedom.
Contact: Typecast Films, 888- 591-3456; info@type castfilms. com; http://type castfilms.com/.
HUMAN RIGHTS - Lyrical Revolt! III will be held December 4 in Syracuse, NY. The event will feature hip-hop musician Anhel whose album Young, Gifted, and Brown was just released. The event is sponsored by ANSWER Syracuse, Liberation News, and SyracuseHip Hop.com. Performers and artists are encouraged to send submissions.
Contact: email@example.com; http://www.answercoalition.org/syracuse/.
FOLK - Musician Painless Parker has released his album Music for miscreants, malcontents and misanthropes featuring “Fuck Yeah, the Working Class.”
Contact: firstname.lastname@example.org; http://painlessparkermusic.com/.
COMEDY - Political comedian Lee Camp’s new album Pepper Spray the Tears Away has been released.