Author: Chris Walsh
Source: Rocky Mountain News

Workers Say Emergency Cost-Cutting Wrings Cachet From Airline Careers

Grueling hours and diminishing vacation time.

Shriveling wages and evaporating job security.

Dwindling employee perks, shrinking benefits, even cutbacks in free bottled water.

So much for the excitement and allure of working in the airline industry.

The glamorous aura that's long surrounded airline jobs is fading as the nation's major carriers increasingly wring savings from their employees to combat rising expenses and mounting financial losses.

While job and wage cuts grabbed plenty of headlines in recent years, carriers are scaling back in a host of other, less-publicized ways, forcing workers to adapt to seismic financial and lifestyle changes. Several major airlines also have reduced pensions or are attempting to eliminate them altogether, a highly contentious issue that has further battered worker morale.

"In this industry there was always the promise that at the end of the hard road to becoming an airline pilot you'd have a great schedule and make good money,"said Brian Humphreys, a Denver pilot who was laid off by United Airlines in 2003 and now works for JetBlue.

"But that's not necessarily true anymore. From one month to the next, there's always something new creeping up in this industry. It's still a good job, but it's certainly not what it used to be."

Airlines, though, say they need to make aggressive cuts to survive - and that the future of their workers' jobs depends on it.

Adventure and glamour

For decades, the nation's major airlines attracted employees by offering a sense of adventure, attractive perks and job stability. Workers were lured by the prestige and the potential to travel the world, provide their families and friends with free flights and take advantage of flexible schedules and generous vacation policies.

Many airline employees also received the promise of a comfortable retirement bolstered by company-funded pensions.

"The airline industry was elite. It was all about adventure and glamour," said Gary Chaison, a labor-relations professor at Clark University in Massachusetts.

That began to change after the Sept. 11, 2001, terrorist attacks, which shook the industry to its core and triggered massive changes in how airlines operate.

While all carriers had to lower expenses to some degree, the nation's major, older airlines had to make drastic cuts to reverse massive losses. Saddled with high costs, large airlines looked to stem the flow of red ink by overhauling their bulky, cost-intensive infrastructures built up over decades.

Airlines shaved billions of dollars in expenses through layoffs and furloughs. Since December 2000, the nation's major airlines axed 136,000 jobs, or nearly a third of their combined work force.

United Airlines, the largest carrier in Denver with 6,000 workers, shed 38,870 jobs - about 40 percent of its total. American Airlines, US Airways and Delta Air Lines cut more than 53,000 positions combined.

Many large airlines also reduced wages substantially by negotiating new contracts with their unions. Some workers, in fact, had their wages reduced to early-1990s levels.

But carriers have reached far beyond job cuts and wage reductions as the industry's financial situation continues to deteriorate.

Two of the nation's biggest carriers - United Airlines and US Airways - are bankrupt. Others, such as Continental, Northwest and Delta, are bleeding red ink and could find themselves in similar situations by year's end.

Although passenger traffic is returning to pre-Sept. 11, 2001, levels, airlines still lost more than $9 billion last year - just behind 2002 for the industry's highest annual loss on record. They're expected to lose billions of dollars this year as well.

The reason: Airlines have been hammered by fuel costs that jumped roughly 60 percent in the past year. Carriers typically could offset those costs by raising ticket prices. But many airlines are trying to undercut each other until one of the large carriers fails, which would ease a capacity glut and allow the industry to raise prices more effectively.

So the name of the game has become survival, and airlines are trying to lower costs in any and every way possible.

Sharing the pain

The cuts have spread across all airline worker groups, including baggage handlers, pilots, flight attendants, dispatchers, mechanics, ramp workers, aircraft cleaners and customer service agents.

Many airlines have upped the number of hours their employees must work each day and have piled on heavier work loads to increase productivity. Some have cut the guaranteed monthly pay workers receive, while others have reduced sick leave and decreased health insurance contributions.

Workers complain that it's harder to schedule vacation time because there are fewer employees to handle rising demand. Flight attendants and pilots are spending more time away from their families for the same, or in many cases lower, pay. Free standby flights can be tough to secure because planes are packed as a result of low fares.

Major airlines also have cut back on little things, canceling paid lunch breaks for some workers and shutting down elevators and lifts to save power.

United even recently reinforced what was formerly a lax policy regarding free bottled water for pilots.

"Airlines have cut back on everything imaginable, from wages and pensions to less obvious things like sponsorship of employee clubs and donations of tickets," said Henry Harteveldt, a vice president at Forrester Research in San Francisco. "Workers have suffered so much in terms of wage givebacks, longer hours, being away from home more often, less time between meals, more aggressive production rules and lower wages."

United took biggest hit

United Airlines has made some of the deepest cuts.

After the Sept. 11 terrorist attacks, United immediately cut 20 percent of its work force and reached concessions with its unions to scale back wages and benefits and loosen work rules. The carrier, which filed for Chapter 11 bankruptcy protection in December 2002, also began requiring its employees to work longer shifts and take on more responsibilities as part of its drive to lower expenses.

The result, some workers say, is that employees now have to scramble just to keep up with the work load.

"Mechanics are covering multiple gates and multiple flights, so we can't fix as many of the (nonvital) things as we used to," said Brian McKeever, vice president of San Francisco Bay area branch of the Aircraft Mechanics Fraternal Association. "We're just playing catch up. United's squeezing more productivity for less wages and putting more responsibility on the mechanics at the gate."

Now United is trying to reduce salaries again as it looks to cut another $725 million this year in annual wage and benefit expenses on top of $2.5 billion in cuts in 2003.

The airline's flight attendants recently agreed to concessions that call for a 9.5 percent wage reduction and reductions in vacation pay and sick leave accrual. Among the smaller cuts: Attendants now have to pay to clean their uniforms. They also now have to pay fees to fly the airline, adding to the financial burden for many attendants who formerly could commute from their hometown to their base city on United for free.

The carrier also was able to strike new wage and benefit deals with its pilots and several smaller worker groups, but it still must cement concessions with two of its largest unions.

Further reductions in wages, work rules, benefits and perks are only part of United's solution to exit bankruptcy, though.

The nation's second-largest airline also says it needs to eliminate worker pensions. Unions - unwilling to give up their retirement funding - have vigorously fought the issue.

While acknowledging the cuts are tough on its workers, United said it has no other choice if it is to survive.

"The agreements we've reached are based on the facts of the industry today, where we have record high fuel prices and airfares at 10-year lows," said United spokeswoman Jean Medina. "We know that this is a difficult time for everybody, but we also know - and our employees know - that as the restructuring continues, our top priority has to be our customers."

Discounters hurting too

While other airlines made similar cuts in recent years, many also are going back for more.

Just this week, Northwest and Delta said they will need to reduce expenses further to combat fuel prices.

Minnesota-based Northwest already has been negotiating with its unions for a host of wage, benefit and work rule reductions that would save the airline $950 million annually. But Northwest's top executive now says the airline will need even larger concessions. Some of its proposed cutbacks include eliminating paid lunches for some workers, reducing paid holidays, tightening vacation rules and scaling back severance pay.

Northwest workers, who have had to cope with much fewer cuts and changes than some of their peers at other airlines, are bracing for the fallout.

"We've already lost about 3,500 Northwest members since 9/11," said Jeff Mathews, the Aircraft Mechanics Fraternal Organization's national coordinator for Northwest. The union represents mechanics and aircraft cleaners. "Now the airline is trying to obtain concessions on wage reductions, work rules, medical, dental, anything they can get to save money."

American, Continental and other major airlines also are looking for more cuts from their workers.

Even the low-cost carriers, largely in better financial shape than the big guys, have had to scale back.

Denver-based Frontier Airlines, which has posted losses in four consecutive quarters but grew its capacity by 40 percent last year, has changed vacation policies and the way its schedules shifts.

Some workers say the changes have made it harder for them to get vacation time and plan for time off.

Southwest, one of the few profitable airlines, has looked to boost productivity by requiring flight attendants and other employees to work more hours.

Cutbacks hammer morale

Five years of cutbacks have hammered employee morale at many airlines, tarnishing the industry's once-glowing aura.

In addition to the myriad wage, benefit and work rule changes, airline workers also have the added stress of worrying about terrorism.

"It's totally a different job now," said Sara Nelson Dela Cruz, a spokeswoman for the Association of Flight Attendants. "Now we're the last line of defense on an airplane before the cockpit. To come to work and carry that on your shoulders is huge."

Many workers who were laid off have left the industry to pursue new careers; others who remain say they are disenchanted with their jobs.

But plenty say they still enjoy working in the airline industry, especially at the low-cost carriers, many of which have been able to more or less shelter their workers from the turmoil ravaging other airlines.

Frontier, for instance, gave many of its workers raises in 2004. Discount carriers also have been hiring during the past few years.

"I don't have to worry right now," said Natalie Ordakowski, a Denver-based flight attendant who's been with Frontier for more than 10 years and previously worked for Continental. "We've never had pay cuts, we still get the company 401(k) match, we still get yearly pay increases. I feel bad for other people who are losing everything they have."

Industry watchers say the glory days of airline employment likely is a thing of the past. While pay levels, perks, work rules and benefits will improve over time, it's doubtful they will return to pre-Sept. 11 levels.

Still, despite the industry's challenges, many workers - those, as they say, with jet fuel in their blood - always will be attracted to work at airlines.

"This is an industry that historically has had a fair amount of junkies working in it, doing what they love to do," said George Hamlin, a director at Virginia-based Merge Global. "That's not going away unless conditions change much more drastically."