At American, the nation’s largest carrier, pilots and ground workers voted April 15 to accept their part of $1.8 billion in cuts in annual wages and benefits. It was a close call. Flight attendants at first rejected the proposal by a narrow margin. Afterwards American’s chief executive, Donald Carty, growled, "If we fail to secure flight attendant ratification by tomorrow, we are--regrettably--left with no alternative but to immediately file for bankruptcy."

The next day the flight attendants voted again, this time accepting the six-year concession package.

In the deal, American’s 12,000 pilots are taking a 23 percent pay cut in the first year, and a 17 percent cut in subsequent years. The 34,000 mechanics and baggage handlers face 16 percent pay reductions and other unspecified concessions that will save the company $620 million. The pay scales of the 24,000 flight attendants will be 16 percent lower. In addition, the company will eliminate up to 7,500 jobs.

The agreement was called into question almost immediately after the company’s delayed disclosure of a trust fund it had set up to protect the pensions of 45 top executives if American went into bankruptcy, and plans to pay millions of dollars in bonuses to the company’s top seven executives.

Facing workers’ outrage at the revelations, Carty canceled the bonuses and publicly apologized. Also feeling the heat, union officials refused to sign off on the accord.

The company then offered to sweeten the concession package, shortening the contract to five years from six, and putting bonuses for union workers on the same terms as management.

After Carty’s forced resignation, this package was voted up by the pilots, ground workers, and flight attendants.

Over the last two years airline workers have faced repeated attacks on their wages, benefits, and working conditions. But the threats of even greater cuts, or even liquidation of the company, which management used to justify its proposals, convinced the majority to vote for concessions.

Federal bankruptcy judges in the past have voided labor contracts and unilaterally slashed wages and benefits to satisfy banks and other creditors. Since last September, the management at United Airlines has successfully used this threat to force the unions to vote for concessions three times.  
 
United union tops capitulate to bosses
In November 2002, American claimed that over $1 billion per year in wage and benefits concessions would be needed to convince the Air Transportation Stabilization Board to grant a government-secured loan the company needed to satisfy creditors. Unions representing the pilots, baggage handlers, customer service workers, and flight attendants voted to accept company demands, while the mechanics rejected the plan.

Deeming the cuts insufficient, however, the federal board rejected the airline’s loan request. On Dec. 9, 2002, United filed for bankruptcy protection. Two weeks later, the company called on the unions to approve temporary takebacks it claimed were necessary to maintain operations until a final agreement was reached.

Concessions in that interim period would be more than double the levels demanded in November, or $2.4 billion a year. Wage cuts amounted to 29 percent for pilots, 9 percent for flight attendants, and 13 percent for flight dispatchers and meteorologists. Members of these four unions voted to approve the cuts.

The International Association of Machinists (IAM), however, which organizes the mechanics, cabin cleaners, baggage handlers, and customer service, rejected the offer and refused to put it to a vote by its members. By mid-January, U.S. bankruptcy judge Eugene Wedoff imposed a 14 percent pay cut on the IAM membership retroactive to New Year’s Day.

In the latest round of negotiations, United is once again using the club of bankruptcy to its advantage in the negotiations. It had an April 14 court date set to hear its motion requesting the judge nullify all union contracts. The $2.54 billion annual wage and benefit reductions in the six-year contracts are to come from the approximately 8,000 pilots, 40 meteorologists, 180 flight controllers, 13,000 mechanics, 24,000 ramp and customer service workers, and 22,000 flight attendants working for United. After the leaderships of all the unions involved approved the cutbacks by April 11, United announced it would withdraw its motion to annul the contracts.

In addition to wage cuts, the tentative agreements include increased employee payments to health-care costs, changes in work rules, significant outsourcing of maintenance and cabin cleaning jobs, and an expansion of part-time work. Workers at United in Chicago and Miami report to the Militant that a 10-year wage progression has been added for cabin service workers and new hires on the ramp.

Now the union ranks will decide on ratifying the concessions. Voting is to be completed by April 29. The pilots have already given their nod of approval.  
 
IAM at United faces decertification
IAM union officials argue that this capitulation to the bosses is preferable to the liquidation of the company and loss of tens of thousands of jobs. This will be an issue in the decertification election scheduled for this summer, in which mechanics at United will decide if they want to remain in the IAM or be represented by the Aircraft Mechanics Fraternal Association (AMFA), which has split mechanics from the IAM at Northwest and smaller carriers. AMFA claims it has never agreed to any concessions.

The IAM won an out-of-court settlement against United over its furloughing of 1,110 mechanics at the Indianapolis maintenance base in violation of the terms of the union contract. United agreed to relocate the mechanics at company expense. However, the company still plans to close the base and lay off more than 1,100 mechanics and 2,300 flight attendants.

Since United, the second-largest airline, entered bankruptcy protection last December, nearly all its competitors have reopened contracts to extract greater concessions from their workers. Under this relentless onslaught, also called "preemptive bargaining," the airline unions have lost many of the gains of the last decades.

At the end of March, US Airways emerged from bankruptcy after winning $1 billion in wage cuts and other concessions. It announced further layoffs of 890 flight attendants by June.

Leo Mullin, chief executive of the third-largest carrier, Delta Air Lines, described "productive" talks with its pilots union about lowering wages and benefits that will be "moving forward with a sense of urgency."

The same week, Northwest Airlines, the fourth-ranked carrier, reported cuts of 4,900 additional jobs. Continental, the fifth-largest airline, is laying off 1,200 workers.

Airline business executives blame diminishing profit margins on a two-year slide in business travel, competition from discount carriers, fewer passengers due to the war, and empty planes on Asian flights resulting from travelers’ fear of the pneumonia-like disease known as SARS.

Aiming to reverse these losses, the bosses will continue to use the "bankruptcy" club they have been wielding, with the help of the government and bankruptcy courts, to try to keep their wallets fat while slashing the living standards of airline workers.  
 
 
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