Union issues at the fractionals

 - August 4, 2008, 7:42 AM

Increasing size provides economies of scale for any business, but for fractional operators attaining “critical mass” in terms of fleet size and flight crews is essential to the model working at all. Profitability then depends on the details of pricing and cost control.

But as the number of employees increases, so too does the pressure to organize. NetJets is noteworthy for being the only fractional provider with its pilots in a union, Local 284 of the International Brotherhood of Teamsters (IBT) Airline Division. NetJets aircraft technicians are also organized in Local 284. The flight attendants voted to join the same union in July 2001, after voting against joining in a previous election more than a year earlier that was preceded by what union officials called “as dirty and dishonest a union-busting campaign as airline industry observers had ever seen.”

Unions have not yet formed at other fractional providers. However, pilots at Raytheon Travel Air, just before its merger with Flight Options last year, voted not to join the Teamsters. In the wake of Raytheon’s takeover of Flight Options LLC in June, Teamsters’ organizers say they will again try to garner enough responses from pilots to authorize another vote. IBT represents 1.4 million workers in the U.S., 50,000 of whom are in aviation; about 5,500 are pilots, most of whom work for regional and cargo airlines. Ironically, the Teamsters union, like aviation itself, is celebrating its centennial anniversary this year.

At NetJets, pilots have been working under a 1998 agreement that became “amendable” in October 2001. Under the Railway Labor Act, which applies to aviation employees, most contracts do not expire at their end dates under the logic that a work stoppage by railroad employees–and now by extension airline employees–would create havoc with the national economy. “Pay is a big part of our negotiations,” said Peter Britt of the NetJets pilots’ master executive council, “but we will be negotiating all terms and conditions of the contract. We are comparing our contract with those of different airlines.” He said the union would be presenting its demands for a new two-year contract to NetJets this month.

Don Treichler, director of IBT’s airline division, said, “The NetJets negotiations have progressed very slowly, much more slowly than we would like. Normally, we’d like the local union to sign the new contract the day the previous contract ends. I think NetJets management is trying to use the economy as an excuse not to move forward. Right now there are too many sticking points. In bargaining, you must resolve the routine issues first then get down to the key points.” Kevin Russell, NetJets executive vice president, told AIN the company does not comment on ongoing union contract negotiations.

Regarding Flight Options, Treichler said the organizing effort conducted right after the merger to collect sufficient representation cards to authorize a vote was not successful. (The National Mediation Board requires that a minimum of 35 percent of eligible employees return cards before a union is permitted to apply for an election, but IBT’s airline division requires 65 percent before it will request an election.) When it became evident that Raytheon would be taking over the company, the organizing efforts “went fallow for a while.” Treichler added, “We’re waiting for things to settle down and then we’ll do another card drive.”

John Nahill, chairman and CEO of Flight Options, told AIN that he has seen little union-organizing activity at Flight Options during his tenure, which began in December last year. “Most of the feedback I’m getting from the pilots is positive,” he added. He said the new pilot seniority system he directed be implemented following Raytheon’s takeover is considered by most pilots to be more equitable to all the pilots than the previous system.

Separately, the lawsuit filed against Flight Options LLC by five former RTA pilots, alleging that they were improperly fired by Flight Options for their union-organizing activities at RTA before the merger, is “in the midst of the discovery phase,” according to Bill Wilder of Washington, D.C. law firm Baptiste and Wilder, which does legal work for IBT. “Flight Options took plaintiff depositions in May,” he said, “and we are scheduled to take depositions of company founder [and former CEO] Kenn Ricci in July.” He said the firm has served subpoenas on Raytheon to obtain documents and may also depose some Raytheon officials. “There may be evidence that Raytheon officials were complicit with Flight Options in the firing of the pilots,” Wilder said.

The deadline for summary judgment motions is September 15, and Wilder said he expects Flight Options to file for dismissal based on there being no facts in dispute, “although obviously there are,” he added. The plaintiffs would then have until mid-October to file their rebuttal. The trial date is scheduled for the beginning of December.