Airline deregulation forces concessions

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under deregulation?

Are the skies safe under deregulation? This question is being posed with increasing frequency as the airlines push their cost-cutting campaign. Harold F. Marthinsen, accident investigator for the Air Line Pilots Association (ALPA), warns: 'There's going to be a deregulation accident. It's just a matter of time, and maybe we already have had it." Marthinsen referred to the crash of an Air Illinois plane on Oct. 11, 1983, that killed 10 people. The Federal Aviation Administration grounded the airline after a pattern of unsafe maintenance proThe ALPA cites seven safety incidents involving the "new" Continental Airlines. In January, Continental flew a damaged 727 for three days before mechanics for another airline reported its cracked fuselage.

American Airlines and other carriers have eliminated a last minute walkaround check of an aircraft by a mechanic. This is now done by a crew member. The ALPA considers this a lowering of safety standards.

Last fall, air traffic controllers described before Congress an air traffic control system "strained near the breaking point." John O'Hara, an investigator for the House Public Works and Transportation Committee, stated that morale among controllers "is the lowest since August, 1981. There are near accidents happening constantly that are not reported and not being investigated."

The Federal Aviation Administration is notorious, as Newsweek points out (Jan. 30,1984), for its "glacial slowness in mandating safety changes." The rea son? Promoting airline profits and regulating safety "are absolutely at loggerheads," according to San Francisco aviation lawyer Gerald Sterns. Newsweek reports, "after an outside consultant placed the value of a human life at $430,000 in 1979 dollars the FAA started considering a ruling that maintaining crash-fire trucks at small airports is not cost-effective. "In the old days the FAA used to say, "If it saves one life, it's worth it," says Wayne Williams, founder of The National Transportation Safety Association, a watchdog group. "I haven't Do profits come before human life in this society? A future may well provide tragic affirmation to this question.-M.H.

Striking Continental at McDonnell Douglas, Long Beach, Calif., last Feb. 7.

Continental Airlines' decision last September to declare bankruptcy-and then reopen two days later after firing two-thirds of its employees and rehiring the rest at half their former wages— delivered a stunning blow to airline workers. The reverberations from this move will be felt far and wide for some time to come. As the Nov. 28, 1983, issue of Business Week magazine noted, "Continental's use of the bankruptcy law to abrogate its labor contracts escalates the struggle to a new level."

The struggle Business Week refers to is an accelerating effort by the airlines to cut back workers' wages and benefits, eliminate jobs, and impose new work rules. Increased competition and heavy losses in recent years have prompted every airline to seek a greater competitive Are skies safe cedures was reported.

heard that phrase in a long, long time."

Socialist Action April 1984 BUT me SCAB FLOWN BY SCABS Socialist Action/Marc Rich Airlines workers show solidarity with workers on strike edge within the industry by reducing the one real variable in their total operating expense-the cost of labor.

The passage of the Airline Deregulation Act in 1978 touched off a major shake-up in the airline industry. Prior to 1978 the Civil Aeronautics Board saw to it that competition among airlines was kept to a minimum-to the advantage of the major carriers. Increased labor costs were simply passed on to the consumer by raising fares via the mechanism of government regulation.

Deregulation led to new fare wars, however, with average fares dropping 12% since 1977. The entry of 14 new nofrills carriers onto the scene, dramatic fuel price rises in 1978-79, and declining passenger business in a recessionwracked economy have hit the airlines hard. In 1982 the airline industry incurred losses of $800 million. common: high labor costs." Labor expenses at the major carriers, Business Week states, are between 33% and 37% of total operating costs while the nofrills, nonunion carriers allot only 19% to 27% for labor costs.

Airlines impose concessions

Business Week then gets to the heart of the matter: "Several more years of financial blood-letting may be in stores.. until the major carriers reduce their own labor costs to nonunion levels."

The "non-union" levels at the no-frills airlines such as People Express, Midway, and others include ticket agents who double as flight attendants or baggage handlers, often for as little as $4.50 an hour, and mechanics whose duties include cleaning aircraft interiors.

A brief survey of some of the major carriers reveals the extent that managements "blood-letting" strategy has progressed. Pan Am started the ball rolling in 1980 when it won $350 million in concessions. The "incentive" for acceptance of this deal was Pan Am's offer to give employees 13% in company stock and a seat on the board of directors.

Western and Eastern airlines have followed a similar formula. Western negotiated a "partnership plan" in 1983 that cut workers' pay 10% for one year in exchange for 32% in company stock. Within 48 hours after Continental declared bankruptcy, Eastern's chairman, Frank Borman threatened a similar move if workers did not accept drastic pay cuts. Heavily-indebted Eastern owed $240 million in interest alone to the banks last year. At the behest of its creditors, Eastern imposed an 18% pay cut and, in return, offered employees 25% in stock and a "voice" on the board of directors.

Republic Airlines won $73 million in givebacks from its workers in 1982 and last fall imposed a 15% pay cut that will mean an additional $100 million for the company. At TWA management is currently pressing for a 15% pay cut and benefits reduction that would represent a $200 million savings for the company.

Delta and United airlines have deferred scheduled pay increases for The response of union leaders to this offensive has been dismal. Striking Continental workers have, for the most part, been left to fend for themselves, as was the case with the air traffic controllers in 1981. Writer Stanley Aronowitz, echoing the "what else can we do" thinking of many labor officials, explains in The Nation (Dec. 17, 1983) that the "reciprocal" bargaining formula of the Pan Am, Eastern, and Western agreements is a preferable alternative to the out-and-out union-busting a la Continental. Aronowitz argues that these deals, which offer workers stock and a representation on management boards in return for pay cuts, reflect a necessary shift from "a strategy aimed at militant wage bargaining...to one aimed at winning a larger voice in the management of the various transportation industries."

Both of these "alternatives," however, only weaken the ability of the labor movement to protect job rights and resist layoffs. Did Douglas Fraser's seat representing the United Auto Workers on Chrysler's board of directors lessen the employers' assault on Chrysler workers or save jobs? The answer is no.

The employers, for their part, understand what "reciprocal" bargaining is all about. Andre C. Dimitriadis, Western Airlines' senior vice president for finance doesn't mince words. "We've got to continue the pay cuts. That's why we put in the partnership plan," he said The choice is not between an Eastern or Continental-type deal-between jobs with pay cuts or no jobs at all. Airline unions can continue to accept the premise that hard times mean hard deals-and passively acquiesce in the face of a steady drive to impose takebacks—or the labor movement can begin to mobilize their members to stand firm against concessions and initiate a drive to organize the new nonunion outfits. This is the only way airline workers will achieve the type of "larger voice" that can send management one clear message-that the "cost of labor" is not a variable item in the corporate account books.