US Airways affiliates held hostage by ‘Jets for Jobs’

 - January 9, 2008, 5:02 AM

The so-called “Jets for Jobs” program agreed upon by US Airways as part of the labor contract ratified by its ALPA-represented pilots over the summer has produced neither jobs nor jets for anyone so far. The deal, negotiated by the Air Line Pilots Association as a partial offset for the package of wage and work rule concessions from US Airways pilots, has instead driven a new wedge between mainline and regional pilots and raised the prospect of more stagnation at US Airways’ independent regional affiliates.

Jets for Jobs, a concept proposed by ALPA’s US Airways unit after the Arlington, Va.-based airline furloughed 1,073 pilots following 9/11, not only requires the airline to staff any new jet positions created by its wholly owned MidAtlantic Airways subsidiary with out-of-work mainline pilots, it also grants the furloughed crewmembers the right to staff half of all new flying slots created by new RJs at the independent Express affiliates. So while US Airways tries to execute a plan to add regional jets at Mesa Air Group, for example, Mesa’s pilots have flatly refused to sign off on Jets for Jobs, leaving the sides at a stalemate and threatening Mesa’s US Airways Express growth plans.

Meanwhile, the pilots of Indianapolis-based Chautauqua Airlines and St. Louis-based Trans States have voted not to par- ticipate in the program either, meaning that, until all of US Airways’ mainline pilots return from furlough, none of the airline’s independent RJ operators can add more jets within the US Airways network. The development has proven particularly frustrating because a new, more liberal scope clause signed over the summer hangs like a carrot on a string over the heads of management from the regionals and the mainline alike.

Originally restricted to 35 regional jets systemwide, US Airways managed to negotiate a series of scope-clause amendments over the past three years that culminated in August with a deal to allow for 465 regional jets throughout the system, but not without a variety of conditions designed for long-term protection of mainline jobs. Under the contract, all flying jobs created by the still idle MidAtlantic Airways regional unit must go to furloughed US Airways pilots, as must half of any RJ positions created at wholly owned subsidiaries PSA, Allegheny and Piedmont. Although the pilots of the three active subsidiaries agreed to Jets for Jobs in separate contract negotiations, US Airways has yet to place any jets with those entities and likely won’t until it emerges from Chapter 11 bankruptcy.

Similarly, if plans for MidAtlantic come to pass as now written, the new division won’t begin flying until this year’s third quarter. Originally scheduled to start in October,
MidAtlantic began recruiting management after it opened offices within US Airways’ existing facilities at RIDC Park West, near Pittsburgh International Airport, during the first week of June. After US Airways filed for bankruptcy in August, however, it became apparent the airline stood in no position to finance airplanes for MidAtlantic or any of its wholly owned subsidiaries, rendering any plans for RJ expansion moot until it emerges from bankruptcy.

For the time being fully dependent on affiliates to finance new airplanes, US Airways has turned to Mesa Air Group for large-scale RJ expansion during the first half of this year. But regardless of the letters of intent signed by the airlines that call for the addition of 70 regional jets in the US Airways Express system, none of those plans will bear fruit unless Mesa’s pilots agree to allow mainline crewmembers in their cockpits. Of course, the issue has become overshadowed by the larger case of Freedom Airlines, a new nonunionized unit of Mesa whose existence has sparked what could prove a landmark court case between the union and Mesa management. A Phoenix district court judge planned to begin hearing arguments in the case last month.

Simultaneously embroiled in a campaign of charges and countercharges since the Mesa pilot contract became amendable on Dec. 2, 2001, the sides planned to enter a new round of negotiations last month, during which time the Jets for Jobs issue would undoubtedly surface again. But, as a Mesa spokesperson told AIN, Jets for Jobs remains a matter for the local Mesa union council and ALPA national to settle. After a similar rift developed earlier last year between the pilots of Piedmont and Allegheny Airlines and ALPA, the union called for “sacrifices from pilots of all the US Airways units” in the interest of the company as a whole. But while such appeals appeared to carry some weight with pilots of wholly owned subsidiaries, those flying for independent affiliates have not shown the same sympathy.

For its part, US Airways has returned to all its employee groups with appeals for further cost cuts after drawing some $850 million in wage and work rule concessions last year. Now seeking another $400 million in annual payroll-related savings over six-and-a-half years, management promised not to ask for more pay cuts during the first round of talks. However, once it became clear that the original cuts would not satisfy the government’s conditions for a $900 million federal loan guarantee, the airline asked for further cost savings in the form of more worker “productivity.”

The airline and ALPA on December 11 reached an agreement to shave another $100 million in annual costs through a combination of productivity improvements, pension relief and temporary wage concessions. The company proposed a package consisting entirely of productivity gains, but ALPA essentially traded wage cuts for a plan to cut payroll size through attrition. In return, the company raised the minimum size of the mainline fleet from 245 to its current level of 279.

US Airways remained somewhat vague about how it wanted to achieve its productivity goals, but US Airways ALPA master executive council official Roy Freundlich told AIN that work rule changes designed to reduce employee rosters stood at the top of management’s list of priorities. “Basically they [were] looking to lay off more employees through productivity concessions,” said Freundlich. As for the status of the Jets for Jobs program, he said the airline negotiated “reduced benefits” to furloughed pilots who transfer to a regional subsidiary, but it has not asked to amend the fundamental structure of the agreement.

Now counting 1,351 pilots on its furlough roster, US Airways has announced plans to furlough another 471 pilots through April. Of course, none of the furloughees have found work with a regional subsidiary under the Jets for Jobs program, and the most promising near-term prospect lay with another bankrupt carrier–Midway Airlines.

Grounded since last July, the Morrisville, N.C.-based airline planned to begin code-sharing flights to three Northeast cities in October. Although Midway succeeded in negotiating new labor contracts with its pilots and flight attendants, it failed to secure leases on 18 regional jets and a $5 million loan for working capital. As an alternative, US Airways has agreed to a $9.4 million deal to help Midway start flying at least one CRJ by January 1.

At press time still subject to approval by the bankruptcy courts, the contract calls for US Airways to fund Midway’s aircraft lease security deposits for up to $7 million and provide another $2.4 million in startup costs.

In return, US Airways would get an equity position in a reorganized Midway. Early last month Midway asked for court approval to lease six regional jets from Bombardier Services. Under the deal with US Airways, Midway has agreed to place up to 18 regional jets into service by the middle of the year.

Meanwhile, the new agreement between US Airways and ALPA appears to have
resurrected the company’s commitment to MidAtlantic, after the union agreed to “competitive” regional airline rates and benefits for furloughed mainline pilots willing to transfer to the new unit.

Under the new agreement, instead of creating a separate subsidiary, US Airways will make MidAtlantic a division of the mainline, allowing the transferred pilots to maintain their seniority numbers. A MidAtlantic spokesman said that the company would likely announce an aircraft choice by the end of last month, although he conceded no firm contract would be signed until the company emerges from bankruptcy.