U.S. airline union takes aim at regionals, not JetBlue
NEW YORK (Reuters) - At the end of a week that saw the top U.S. airline pilots' union win a ringing victory at JetBlue Airways (JBLU.O), the union's head showed his willingness to offer both a carrot and a stick in future dealings with the industry.
Air Line Pilots Association President Lee Moak sounded a conciliatory note at discount carrier JetBlue, saying the union will be focused on maintaining relations with management and advocating for better airline industry policy in Washington rather than pushing for pay hikes.
But he signaled a tougher approach toward regional airlines, which he said pay starting pilots as little as $16,500 a year, saying that there would have to be a "market-based solution" at such carriers, which feed passengers from smaller cities to larger hubs.
Coming amid relatively strong U.S. airline earnings, the yes vote by 71 percent of eligible JetBlue pilots had raised questions about whether airline unions were positioning to win back wage and benefits concessions they made over the last decade.
JetBlue shares are down 9.6 percent since Monday in a week that also saw the airline post weak quarterly earnings and a Reuters report that its flight attendants would seek to follow suit in holding a vote to unionize.
But Moak signaled that a pay increase was not his primary goal.
"JetBlue is the same company today as it was on Monday," Moak said, "Now that the pilots are organized, we're going to engage with the company to ensure that it continues to be a great company and that the culture continues."
That's not to say there won't be upward pressure on wages. Airline unions have already made gains in recent years and that pressure is likely to persist, particularly at the regional carriers, which have been suffering from a pilot shortage.
Low pay is driving recently trained pilots away from those jobs. Many are going to foreign carriers that pay more, he said.
A pilot who incurs $100,000 in debt in flight school "can't be expected to go to work for $16,500 to $23,000 a year," he said.
"Especially when Middle Eastern airlines are in the U.S. recruiting our best and brightest," he said.
"There is a market-based solution here."
Moak also said ALPA had a good track record in recent contracts with Delta Air Lines (DAL.N) and United Airlines (UAL.N). United declined to comment. Delta did not immediately return a phone call seeking comment.
But the ALPA chief said he is also concerned about airlines staying profitable as fuel prices rise and that government taxes on the industry are at least as good targets as contract wins.
"We are identifying the issues that are going to affect the profession for the next 20 years," he said, citing rising global competition.
Since deregulation in 1978, the U.S. airline industry has transformed through competition, bankruptcy and consolidation. The field of major U.S. carriers has narrowed to just four, and airlines have learned to control costs and capacity to stay profitable even as fuel prices rose. That has put downward pressure on wages and costs, and reduced ALPA membership.
In contrast with ALPA, some airline unions say it is time to recoup those gains.
"When you have stability, that lends itself to profitability and profitability lends itself to growth and security and stable careers that the pilots will hopefully reap the benefit of in both salaries and progression," Keith Wilson, president of Allied Pilots Association, said in a phone interview.
"We think we have a little more leverage now because we are all on the same page."
But Moak said the industry has not totally recovered and that staying profitable in an era of increased taxation and high fuel costs remains a big challenge for the industry.
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