Several big airlines' contract battles heat up

DALLAS — As the rumblings of airline labor unrest and possible strikes grow louder, the average traveler wonders: Where did all this come from?

The answer is simple: It's that time.

Through the middle of the past decade, most major U.S. airlines forced their employees to accept new contracts that cut their wages, required more productivity and took away benefits, airline industry analysts say.

Now many of those contracts have come up for renegotiation, seemingly all at once. And even as airlines are trying to hold down expenses or cut deeper, employees want to get back some of what they surrendered under duress.

"What's kind of prompted this is the restructuring that occurred after (Sept. 11, 2001)," said William Swelbar, an industry analyst and consultant who sits on the board of Hawaiian Airlines' parent company. "Everyone's agreement was pretty much done at the same time."

On Wednesday, the National Mediation Board scheduled more negotiating sessions between American Airlines and two unions that want to be released from mediation, according to an American Airlines official. If the board grants the request to end mediation, it will start a 30-day clock to a possible strike. Another union has been negotiating a new contract with American for more than three years.

All three unions — the Allied Pilots Association, the Association of Professional Flight Attendants and the Transport Workers Union — agreed to concessionary contracts seven years ago. All the contracts became amendable May 1, 2008.

At United Airlines, all the union contracts became amendable Jan. 1. Negotiations began a year ago, with no agreements yet. Continental Airlines' contracts with its pilots and mechanics became amendable at the end of 2008, and with its flight attendants at the end of 2009.

"For the most part, the legacy carriers, the big guys, they all had their financial troubles at the same time," said management consultant Jerry Glass of F&H Consultants Group. "So they all did their financial restructurings about the same time, within a 12- to 24-month period."

A brief period of industry profitability in 2006 and 2007 was followed by two dreadful years in which soaring fuel costs drained airline finances, followed by a global recession and plummeting demand and revenue.

It's into that situation that airlines and their unions are attempting to hammer out new deals, with airlines saying they can't afford to raise their costs and employee groups seeking to get back what they lost, or at least some of it.