MIAMI – History has shown that airline mergers, interline agreements and alliances have always adversely affected the employees; specifically, the pilots that fly for said airlines. But let’s not forget that the single only way any airline can possibly operate is because of those pilots.
What may seem like a great service for an airline’s loyal passengers, is often a giant headache behind the scenes. For instance, alliances such as that of American Airlines (AA) and JetBlue Airways’ (B6) merger will provide seemingly seamless service between two (or more) airlines at many airports.
However, let’s talk about what happens in the process and who, in fact, maybe the most affected. Pilot union mergers are never amicable. Eventually, the pilots ‘get used to’ the new situation but there was always a struggle.
Alliances are great for the airlines and great for the customers. Even credit card companies benefit from these multi-billion dollar business deals with their loyalty programs. However, it is those who actually do the hard work that end up being affected most.
For US and Canadian pilots, possibly the second most important thing in their careers, besides safety, is their seniority at the airline they are employed at. How does this seniority thing work, you ask? Simple: last one in, first one out.
Imagine for a second that a pilot was hired at an airline in December 2019. Who knew about COVID-19 back then? Sure, we heard about some nasty flu virus that had popped up in China. NOBODY could have predicted what would really ensue, but that’s water under the bridge now.
Going back to this young gun, super cool pilot who moved to another city where he/she was now based, bought a nice car, signed a year’s apartment lease with a bright future in mind, committed to gym memberships, made friends, etc.
Then POOF! COVID-19 happened and the airline sends an email that he/she has been furloughed, with a valid reason why (force majeure), but no specific return date. Being furloughed does not mean you’re fired. Instead, you’re put on hold with no obligation to return.
What now? Find another job? Try to be hired by another airline? There are so many other pilots in the same boat that the hiring market is saturated. Then it becomes a matter of connections. ‘Who do I know at what airline that is in a position to offer me a job? I’m willing to move (again). Whatever it takes for me to take to the skies again…!’
Let’s get back to this seniority thing. The longer pilots work for an airline, the more senior they become. If they quit at one company and are lucky enough to be hired by another, they start from scratch, at the bottom of the seniority list.
The more senior they are, the better the chances of an upgrade to Captain (read: more responsibility, also more money) and also the chance of flying larger aircraft (read: more money; the hourly pay rate goes by weight of the aircraft). Clearly, it’s much more beneficial to stay put. This actually also counts for the airline that invested in them.
Mergers and Pilots
How can this coveted seniority also be affected? Well, let’s get to the crux of the story. Say airline X thinks it’s a great idea to purchase or merge with airline Y. What happens with those two pilot seniority lists? Logical you say? Nope. Some might think, well, the seniority list of the purchasing airline stays on top and the list of the purchased airline is tagged onto the bottom. No, no, no. That’s much too simple.
In interviewing both an AA and a B6 pilot, I got their point of view (for their personal reasons, they will remain undisclosed) in a summarized manner.
This is where the pilot unions step in. The Air Line Pilots Association (ALPA) is the largest union in the industry and represents the pilots of most US and Canadian airlines. AA pilots have their own union – Allied Pilots Association (APA). ALPA has more clout with their approximately 59,000 members than APA has with their approximately 15,000 members.
There was a situation in the Spring of 1993, where the APA pilots went on strike but were sent back to work by none other than the President of the United States at the time, and within an hour! Then there was the NorthWest Airlines (NW) pilots’ strike in the Summer of 1998 (whose pilots were represented by ALPA) that lasted 14 days.
Northwest walked away from the negotiating table that year, locked out its pilots and shut down the airline for more than two weeks. As a consequence, the airline suffered heavy losses and ended up in the red in 1998 after being profitable since 1993.
For those two weeks, the airline was operating only a few flights per day, flown by only 21 pilots, known as scabs, who opted to break from the union. Ten years later NW would be purchased by Delta Air Lines (DL), with its ensuing pilot and flight attendant lists’ complicated mergers.
In the end, the agreement reached with ALPA included measures to protect pilot jobs and a 12 percent pay increase for pilots over the four-year life of the contract. Northwest pilots received an average annual salary of US$120,000. NW also agreed to make a lump-sum US$56m payment to its pilots, share profits, and grant 2.5 million stock options.
A Matter of Politics
How was it possible that one pilot group was sent back to work by the POTUS, and another, not? Simple answer: Politics. With 59,000 members, you can imagine the number of membership fees ALPA collects. In comparison, APA collects fees from a mere 15,000 pilots (normally 0.5% of their salary and upward of 1% while in contract negotiations).
So when ALPA sends the AFL-CIO a hefty check to support a certain presidential candidate, they will most likely listen. Read between the lines: in the case of NW, the receiving political party did exactly what the union wanted and allowed them to strike.
APA, on the other hand, didn’t have that kind of clout, nor money, and the POTUS at that time decided to accept the much larger ‘donation’ of the AIRLINE as opposed to the union’s donation and thus ordered the pilots to go back to work.
In simple terms, the airline had donated more than the pilot union. Every single AA pilot received an official letter from the POTUS saying they had been sent back to work. All that for less than an hour in the strike. Interesting, not? But let’s not diverge too much. Back to seniority lists.
Mergers and Seniority
To give an example of pilot seniority list mergers: let’s use both AA and Reno Air (QQ) in 1997 and AA and Trans World Airlines (TW) in 2001.
In the case of the AA and QQ merger, AA was looking to expand its service on the West Coast of North America, adding destinations such as Reno (RNO), popular Las Vegas (LAS), San Jose (SJC) and Vancouver (YVR) to feed into AA’s hub in Los Angeles (LAX) and thus, the world.
Smart business move. But who were the ones that were adversely affected? The pilots, of course. Rightfully so, the Reno pilots also deserved a spot on their new and much-improved seniority list. The eventual outcome was negotiated between the two unions, which included pay guarantees and a list merge.
The Reno pilots certainly gained from this. The more junior AA pilots lost many seniority numbers and thus if there were ever furloughs, the chance of being sent home.
The second case of AA and TW that I mentioned, still baffles me. On the heels of the awful September 11, 2001 terrorism attack on US soil and followed by the almost unbelievable subsequent crash of AA’s Airbus 300’s flight 587 in a Long Island town called Belle Harbor, AA bought TW. But why then? Was that really the time to be buying an airline?
The negotiations had clearly been going on for a while but the timing was certainly off. AA did have the option to cancel the whole deal but nevertheless continued on. AA wanted to gain some of TW’s many international routes and its coveted slots at New York’s John F Kennedy International Airport (JFK).
The deal continued and, again, the seniority list drama ensued. In this case, for each six AA pilots, one TWA pilot would be inserted. In other words, if your previous seniority was seven, suddenly your seniority became eight. If it was 12, it became 14. And so on.
This, however, is not a big issue when you’re number seven on the list. You’d be pretty close to retirement at that point anyway. But, if you were number 1,000 and suddenly become for instance number 1,400, you’re potentially looking at all sorts of career issues: everything from delayed upgrades, which means salary, pensions, and even job security.
Fair or not fair? Some will say fair because those pilots deserve a spot on the coveted list as well. Others will say, nope, they would have been out of a job otherwise, so they should count themselves lucky.
American Airlines, JetBlue Partnership
Regarding the AA–B6 agreement, it was made far before anyone knew about it. Back in the summer of 2020, this so-called Northeast Alliance between the two airlines was announced. Although ALPA, the B6 pilots’ representative, knew about it, the agreement was also to be accepted by the pilots.
Although this agreement is a simple alliance, not a merger (read: no seniority list drama), there are still significant effects on both pilot groups.
The eventual reason that the AA and B6 pilot agreement was not accepted by the union is for Scope Clause reasons. It is mostly about job protection and salary increases.
Take a flight that used to be operated by B6 but will now be operated by AA as an example of job protection. The more often this happens, the fewer flights B6 pilots will be operating and perhaps B6 will not need so many pilots anymore, which means they may furlough them.
As for any salary increases in the AA-B6 deal, a small increase in salary was offered, which is equivalent to normal inflation. It was therefore not acceptable to the pilots and they voted against it.
AA and B6 will be going ahead with their alliance regardless of an agreement with the pilots. Flights are already being sold as codeshare while the negotiations continue.
The next time you board an aircraft, please remember that the ones at the pointy end have not just worked years and very hard to get to the point to be able to take you from point A to B safely, but will also constantly endure the stress of keeping their livelihood. And let’s not forget, at the pay that they deserve.
Featured image: JetBlue American Airlines. Photo: Phil Wilco/Airways