Industry braces for fallout from Comair strike settlement

 - May 21, 2008, 8:05 AM

An unsettling air of ambivalence descended on Cincinnati-Northern Kentucky Airport last month as Comair pilots ended an 89-day strike that cost Delta Air Lines at least $200 million and an untold number of non-striking employees their jobs. One might expect a feeling of relief from all involved, after fears of a complete collapse of the most financially successful regional airline in history weighed heavily on the industry for the better part of three months.

But a sense of any sort of meaningful long-term accomplishment has proved harder to encounter. Of course, flight crews can return to their daily routines as the highest-paid pilots in the regional airline industry, and the airline can start rebuilding an infrastructure that took more than a decade to construct. But who, if anyone, one may ask, emerged as the real winner?

The new five-year contract, ratified by the Comair pilots in late June, increases the minimum salary for first officers from $16,000 to $21,000 and top pay of full-seniority CRJ captains from $69,000 to $85,000. The pay offer differed little from that issued by the National Mediation Board on May 12, when Comair’s pilots voted overwhelmingly to continue the then month-and-a-half-old strike. The last offer won 733 votes in favor against 408 to reject, hardly an overwhelming majority.

The pilots also won improvements in retirement benefits, including a company-funded plan that will contribute between 2 percent and 10 percent of annual salaries, and each pilot will get an extra day off each month. In all, the new contract will add more than $20 million to Comair’s payroll costs during the first year of the agreement. The pilots had originally sought a package worth some $32 million a year.

Despite far-reaching improvements in pay and work rules, the Air Line Pilots Association failed to achieve its ultimate goal in the minds of pilots and union officials alike. Billed by ALPA president Duane Woerth as a crusade to recognize regional pilots as “real airline pilots” rather than de-facto trainees for the major airlines, the Comair negotiations were to become a “watershed event in reshaping how people think about and compensate pilots,” according to Woerth.

If, he reasoned, the costs associated with flying a regional airplane proportionately equaled those of mainline equipment, major carriers would stop transferring routes served by DC-9s and 737s to affiliates flying regional jets. Under such a scenario, ALPA could conceivably remove the need for scope clauses from its mainline contracts, thus ridding itself of persistent conflict-of-interest charges stemming from its coincidental representation of two pilot groups with opposite agendas.

After two years of negotiations and a three-month walkout, ALPA certainly took a step toward its goal of removing those conflicts, but not nearly to the extent it had hoped. In fact, its efforts raised Comair’s total cockpit crew cost per passenger from some $7.80 to $10.30–still at least $5 less than that of Delta Air Lines. Meanwhile, the Comair retirement plan still does not approach that at Delta, which pays pilots 60 percent of final average wages for life, rather than the defined-contribution plan to which Comair’s pilots finally agreed.   

Although ALPA failed to fully settle its own agenda, some regional airline executives lament that Comair “gave away the store” with its comparatively generous pay concessions, and set a precedent that will alter the cost structure of the entire industry. The settlement has set a new “high water mark” on which other regional pilot groups may now set their sights, leaving the regional industry in a predicament unprecedented in its relatively short history.

Management argues that the higher costs will act to reduce opportunities for regional flying, compromising service to small communities and further eroding the two-tier cost structure on which regionals have relied for their very existence. Pilots argue that the industry has reaped record profits through the exploitation of a system that artificially suppresses employee salaries at the regional level, and that they seek only their fair share of the wealth.

Notwithstanding the system’s fairness or lack thereof, the fact that Delta appeared willing to allow Comair to collapse rather than pay its regional pilots mainline wages speaks volumes about the importance it places on maintaining the status quo, not only for itself, but for the entire airline business. Meanwhile, Comair continues the rather onerous job of rebuilding after absorbing the brunt of this latest battle between labor and management. At press time flying some 40 of its remaining 82 airplanes, compared with 119 before the strike began, Comair estimates it will have resumed at least partial service to most of its pre-strike cities by December, by which time its 1,200 pilots will have undergone “intensive” retraining and FAA checks.