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MARK PILING LONDON DAVID FIELD WASHINGTON NICK IONIDES SINGAPORE

Pilots are taking labour action across the globe to support claims for better pay and conditions, with their demands increasingly benchmarked against rates at competitors and partners around the world

It all started a year ago with the United Airlines pilots. They won a pace-setting pay deal of 45% over four years and thereby kicked off a round of claims across the US industry. Delta Air Lines followed with a similar hefty wage hike. Such "me-to" pay demands are common in the USA. What is different this time is how these demands have subsequently rippled around the world.

Spurred by the generous US settlements, pilots in Europe and Asia have followed suit in seeking hefty rises, prompting a rash of strikes and labour action. For now the situation shows little sign of abating, despite the warnings of economic slowdown.

The global nature of the unrest, it seems, is due in part to the advent of global airline grouping. These alliances have encouraged pilots to seek parity as they gain a much deeper understanding of the pay and conditions of their colleagues in partner carriers. The most advanced co-operation is unsurprisingly found among the unions of the longest established alliances - Star and oneworld - while the SkyTeam pilots are just beginning to organise themselves.

"They are working more closely than ever before," Washington labour consultant Jerrold Glass says of the main US flight deck union, the Air Line Pilots Association (ALPA), and its co-operation with overseas counterparts.

The development makes sense to Joshua Javits, a former chairman of the US National Mediation Board. "The European carriers had no-one to compete against, so there was no pattern bargaining," he says, discussing the practice of basing pay demands on raises achieved by other labour groups or counterparts at rival companies. Javits, now a Ford & Harrison attorney, adds: "The US began pattern bargaining in the airline industry, so it only makes sense for it to spread internationally."

To further its pay claims, the Vereinigung Cockpit (VC) German pilots union worked with unions at other Star carriers to benchmark the salaries of Lufthansa pilots worldwide. "You will find our fingerprints on the Lufthansa contracts and at other European carriers," says ALPA president Duane Woerth. "Our foreign pilot partners want access to ALPA's professional staff and economic analysis department to better represent their own members. Our subsidiary International Pilot Services Corporation was formed to extend our influence through consulting agreements with other foreign pilot groups."

According to Javits:"ALPA has been very aggressive in selling its services as a training organisation in bargaining tactics and strategies."

Discussing co-operation efforts between oneworld pilots' unions, the British Air Lines Pilots Association (BALPA) says: "We are exchanging [information on] contracts, pay rates and conditions of service," says Most have put forward this information, and, coupled with data from other carriers, BALPA is preparing a global benchmarking study that will help it make its case when it begins pay negotiations with British Airways managment later this year.

Initially, it was the Lufthansa pilots, followed closely by those from Iberia, that flexed their muscles in Europe. Both the German and Spanish disputes were forced into arbitration, as the two sides failed to reach agreement. There has also been labour action by pilots in Poland and Italy, and there are rumblings of discord from the Czech Republic.

The deal struck by the VC and Lufthansa has set the tone as pilots seek as a minimum to regain pay cuts made during the 1990s. According to Dennis Dolan, vice-president of the International Federation of Air Line Pilots Association: "After a decade in which pilot salaries were flat or fairly depressed on a world-wide basis, pent-up demand for pay increases and recovered profit has laid the ground work for the Lufthansa pact, [which followed] United's contract. You see with Lufthansa a direct descendent of the United deal."

Impending discussions on new contracts for BA and Air France pilots are again likely to feature strong demands from the unions. The BA pilots' deal runs out on 31 December, with the union claim probably to be put to the airline in October. Similarly, Air France's pilot contract expires at the end of October, and talks will start by the beginning of September, says Patrick Auguin of the SNPL French pilots' union. It is conducting its own benchmarking exercise, particularly with the pilots of SkyTeam partner Delta. Then, as the VC did with Lufthansa, it will compare notes with Air France and agree on the comparisons before beginning negotiations, he says.

However, the French pilots believe their counterparts in Germany secured a good package and will pitch for something similar. "All airlines are increasing wages and Air France will have to do the same," said Auguin.

One of the long-term intentions of the unions that are clubbing together along alliance lines is to bring the wages and working conditions of each carrier up to the level of the best paid. When alliances were first mooted, the unions voiced worries about carriers transferring operations to partners with lower costs and "cheaper" pilots to maximise profits.

There has been no evidence of this so far. "Their fear is an illusory one," believes Richard Stirland, director general of the Association of Asia Pacific Airlines. "You cannot imagine BA, American Airlines and Iberia, for example, sitting down and letting Iberia operate all trans-Pacific routes because it has got the lowest costs." In practice, such interchangability would be extremely difficult to achieve, he believes.

In the USA, it is the international co-ordination of scope limits that has caught the attention of management. Douglas Steenland, the new president of Northwest Airlines, says carriers can live with increased international labour relations "as long as the scope clauses aren't overly expansive".

While there could be more trouble ahead for European carriers this year, the prospects for more disruption in the Asia-Pacific region depends more on local circumstances than on any attempt by pilots to keep up with the pay increases seen elsewhere. Says ALPA's Woerth: "We're farther along in Europe than in Asia, but that's only because the alliances are farther along."

In Asia, Hong Kong's Cathay Pacific Airways has been the worst affected by a labour dispute with pilots over pay and duty planning issues. Labour action began at Cathay on 3 July when members of the Hong Kong Aircrew Officers' Association (HKAOA) launched a "work-to-rule" campaign in which they started abiding strictly with company operating manuals, including arriving for duty not a minute before required.

As the HKAOA said it would carry out its campaign "indefinitely", forcing widespread flight delays, Cathay quickly began playing hardball. It cut its network by 20%, sacked dozens of pilots, and wet-leased aircraft from other carriers to operate on its behalf. The airline also unilaterally imposed a new contract with pay rises on 10 July. Despite this, the union is not buckling and will continue its action.

Another damaging pilots strike was at Korean Air in June, with limited action also occurring in Japan. Japanese transport workers typically strike ahead of the summer operating season to demand higher summer bonuses.

Job actions that fall into grey areas, such as the unauthorised overtime protest by United pilots last year, are as much locally inspired as anything else, insist the unions. "It would surprise me if ALPA were advocating any job actions in such areas as slowdowns," says Glass.

Reverberating strife

Whether official action or not, executives at other carriers are worried that labour strife could continue to reverberate around the Asia-Pacific, explains the AAPA's Stirland. This would be unfortunate, coming at a time when carriers are coming under increasing economic pressure. One potential hotspot could be New Zealand and Australia, where the outcome of the future of Air New Zealand, and the proposed increase in ownership by Singapore Airlines, will play a key role.

But airline concerns that an economic slowdown, coupled with large wage bill increases, could jeopardise their performance seem to be falling on deaf ears. Auguin of France's SNPL recognises the economic climate is worsening. "But we have had five to six years of good results [at Air France]," he says, and the pilots want their share of this success.

The question of whether the airlines will be able to pay for the wage hikes is answered more directly by others. Adam Pilarski of Avitas says: "The answer is simple: they won't be able to pay. The cycles of industry profitability and union contracts are out of syncronisation with each other. Contracts are open for renegotiation just as airline profits dip. But the airlines are not going to tell the unions 'you should have come to us two years ago and we would have given you big raises'. I don't think so."

Selected recent pilots union action and settlements
Carrier	Union		Date	Demands	Action	Settlement
United Airlines	ALPHA		Spring 2000	40% rise	Refused overtime	45% over 4 yrs
Alitalia	Various		March 2001	See notes	Series of strikes	tba
Delta	ALPHA		April 2001	24-34% rise	Strike threat	24-39% over 5yrs
Iberia	SEPLA		April 2001	Claw back 12.5% pay cut agreed in 1995	Series of strikes	28% rise over four years
Lufthansa	VC		June 2001	Up to 30% rise	Several strikes	14.8% rise
Cathay Pacific	HKAOA		July 2001	10-15% pay claw back, improve duty planning	Work-to-rule	tba
Note: tba = to be agreed. Alitalia pilots action over deteriorating relationship with management and alleged contract violations Source: Airline Business research

 

 

Source: Airline Business