NetJets pilot talks stall, again

 - October 19, 2006, 12:05 PM

Contract talks between NetJets management and pilots broke down once again on September 12, three days shy of a scheduled 30-day marathon bargaining session. The pilots’ union negotiation committee said it walked out of the talks “because the company has continuously failed to respond to the union’s position regarding the pilot group’s bargaining thresholds,” namely salary expectations.

According to the pilots’ union, International Brotherhood of Teamsters (IBT) Local 1108, NetJets put forth a proposal that “offered less than a $300 per month increase for a five-year captain.” Figures released by the union show the divide that exists between labor and management; the union seeks an annual salary of $114,156 for a fifth-year captain and $74,202 for a fifth-year first officer, equating to the 90th percentile of the NBAA Compensation and Benchmark Survey. The company’s latest proposal is $71,752 and $44,200, respectively, putting the pay in the 10th percentile of the NBAA salary survey.

The disparity between retroactive pay is even wider, with the union wanting slightly more than one year’s pay and NetJets offering a 9.5-percent “bonus.” NetJets pilots argue that they are essentially working for 1998 wages, since their last ratified contract went into effect that year. That contract became amendable four years ago this month, and the pilots want the company to pay for the protracted negotiations, which they blame on management.

Non-salary Talking Points

While pay is one of the main sticking points, scheduling, gateways and scope are other bones of contention. Regarding scheduling, the union wants a majority of the pilots on a seven-on and seven-off schedule, with the remainder on a 17-day “flex” schedule. According to the union, the company has proposed a six-on and five-off schedule, which would require NetJets pilots to work an extra 16.5 days a year. As for gateways, the union prefers “home basing,” while NetJets management would like to pare the gateways to five.

But of the three non-salary issues, scope is the largest hurdle. IBT 1108 pilot representatives want NetJets International–the non-union fractional arm that flies Gulfstreams–to “be brought back to its rightful place,” meaning a merger of the two divisions. This would unionize the pilot workforce at NetJets International. Obviously, NetJets opposes any such action.

One huge remaining question is whether the company can afford to meet the pilots’ demands. Of course, the union workers believe NetJets can pay the wages they seek and still make a profit, citing increased productivity under their proposal and the minimum annual 3.75-percent rise in monthly management fees for shareowners. Meanwhile, the union said NetJets management claims the company would bleed red ink under the union’s proposal.

Adding further fuel to the fire is the union’s contention that the company has said it can’t afford higher wages while at the same time coming up with enough funds “to wait [the union] out.” If that is true, the union asserts, NetJets management is willing to spend money to erode pilot support for the union but isn’t willing to increase pilot salaries to be more in line with NBAA-standard wages.

But if the company is expecting the pilots to capitulate to its demands, a recent Web-based survey of the unionized workforce by the Wilson Center shows otherwise. “The possibility of a [National Mediation Board]-imposed recess of indefinite duration will have little effect on the bargaining goals of the pilot group,” according to the survey. In fact, “73.4 percent of the pilot group is prepared to wait either until management modifies its position or for as long as it takes for the NMB to declare an impasse and then engage in a strike.”

The survey also notes, “More than 90 percent feel their union will be successful in gaining the pilot group’s bargaining goals. Nearly 80 percent feel they have great or considerable bargaining power.” Additionally, “More than 90 percent are committed to striking, and intensity of sentiment is especially strong–more than 80 percent are ‘completely and firmly committed.’”

At press time, the two sides weren’t talking, and NMB-assisted negotiations remained in abeyance. According to a union spokeswoman, “We don’t want to have to deal with the NMB as this adds an extra layer of bureaucracy. What we’d like to do now is pull NetJets chairman Richard Santulli into the negotiations.” Santulli, the founder of the fractional concept, has so far steered clear of the negotiations, instead leaving this task to NetJets Aviation president Bill Boisture and other executives at the Columbus division.

The union spokeswoman said it plans to draw Santulli into the contract negotiations by continuing informational picketing. This month the pilots plan to picket Wall Street, as well as the Breeders’ Cup World Thoroughbred Championships at Belmont Park in New York on October 29. (NetJets sponsors the NetJets Breeders Cup Mile, which has a $1.5 million purse.) Next month the pilots will conduct informational picketing at the NBAA Convention in Orlando, Fla.–both at the convention center and beside the static display area.

Over the Labor Day weekend, the union conducted informational picketing at four airports, as well as outside NetJets’ Columbus offices. On September 15, NetJets pilots took their picketing campaign to Denver Centennial Airport, where NBAA was holding a regional forum.

NetJets has repeatedly told AIN that it will not comment on pilot negotiations.