Pilots looking for payback

Amy Scott Jan 30, 2007

KAI RYSSDAL: Even a peek at the business pages the past couple of weeks will have told you the airline industry appears to be on the mend. Most major carriers have posted their first annual profits in six years. Today JetBlue and US Airways each turned in strong fourth quarters, thanks to rising passenger demand. Marketplace’s Amy Scott reports some airline employees have demands of their own.

AMY SCOTT: Mind the seatbelt sign, the airline business is in for some bumpy contract negotiations. Industry analyst Darryl Jenkins:

DARRYL JENKINS: We’re gonna see some of the really worst labor relations we’ve ever had. And it’s not like we’ve ever had any good ones.

Billions of dollars in cuts to pay and benefits helped fuel the industry turnaround. Today officials from various pilots unions gathered in Washington to work on getting some of it back. John Prater is a Continental Airlines pilot and president of the Air Line Pilots Association.

JOHN PRATER: The companies will not continue to make money without the full support of their pilot teams. And the only way to get that full support is to restore the concessions that we gave up for our companies to be able to survive to this day.

It’s not just pilots looking for payback. American Airlines ground workers say they plan to fight for their share of the recent gains in talks this fall. But airline economist Mark Kiefer says unions may be asking too soon. The recovery is just taking off. And the major carriers are still saddled with billions of dollars in debt.

MARK KIEFFER: They simply don’t have the money at this point. So I think at least part of the answer is incentive-based pay that allows the workers to share in the profitability of the company as it increases.

Pilots at bankrupt Delta Airlines have negotiated such a deal. Pay raises will be tied to airline performance. The Federal Aviation Administration offered some extra help today. Officials proposed raising the retirement age for pilots from 60 to 65. That could help those who lost pension benefits in the last few years bridge the gap.

In New York, I’m Amy Scott for Marketplace.

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