Union contracts in the airline industry are different from most others in that they never expire. Instead, at a certain point they become amendable. This is supposed to avoid disruption in service, but in reality, it’s just an awful process that draws out contracts negotiations over several years. It’s only when the stars align that things get done in a timely manner. But a timely manner would be soon after the contract is amendable, not the 6 months beforehand that we see here. So what’s the story?

There was a unique opportunity on the table for Delta to get a hold of AirTran’s fleet of 717s that Southwest has decided it no longer wants as part of its acquisition. But for Delta to get those airplanes, it had to get the pilots to agree to fly them for a rate that would make this move a smart idea. So there was some urgency for Delta to come to an agreement sooner rather than later to make this work out. Sure enough, the pilots were interested and the deal came together. Let’s talk about what this means for everyone.

Delta Pilots Fly the 717
If this is ratified, Delta will take the 88 717s in the AirTran fleet today. I don’t know the terms, but you know that they’re getting a smoking deal on these aircraft. The Delta pilots will fly the 717s at the same rate they’re paid to fly the DC-9s today. In the last quarterly report, Delta still had 21 DC-9-50 aircraft in the fleet, but those are on their way out to be retired soon. The 717s, which are just a bit shorter, will take over for those DC-9-50s with 110 seats split between First, Economy Comfort, and coach.

50-Seat Regional Jets Slashed by 65 Percent
But that’s not a one for one replacement; there are still an extra 67 airplanes if we do the math. Delta says it wants to keep capacity flat, so what else will happen? The airline will slash and burn the 50 seat regionals. Here’s how Delta lines up with 50 seaters as of the last quarter:

That’s 353 of those 50-seaters buzzing around. And you know what the new contract would allow? No more than 125.

Holy cow, that’s a massive decrease. Delta is happy about this because with oil where it is, those 50-seaters are completely uneconomical. The pilots are happy because they get rid of a ton of outsourcing. But wait, we’re still out of balance. Let’s do some math. The DC-9s have 120 passengers, so multiplied by 21 airplanes and you have 2,520 seats. The 717s have 110 seats, so multiplied by 88 airplanes and that adds 9,680 seats. The RJs have 50 seats, so multiply that by 228 airplanes that are going away and you have 11,400. So right now, we’re removing 13,920 seats and adding back only 9,680. What about the rest?

70 More Big Regional Jets
It’s the bigger regional jets that balance this out. At last check, Delta had contracted for 102 aircraft in the 65 to 70 seat range. Those are a mix of CRJ-700s and Embraer 170s. In addition, Delta had contracted for 153 of the 76-seat jets, which are a mix of CRJ-900s and Embraer 175s. As part of this deal, the pilots will allow them to contract for up to 70 more of those 76-seat jets as long as Delta adds new mainline aircraft at a rate of 1.25 to 1. It’s pretty convenient that 1.25 times 70 is … 88 (if we round up), the number of 717s that the airline would acquire.

The Final Tally = Better Customer Experience
That means Delta adds another 5,320 seats, or about a total of 1,000 more seats than it will remove from the fleet. In the end, Delta gets rid of 228 money-losing 50-seaters and the terrible, cramped, single class experience that comes with them. It gains 158 bigger jets with First Class, wifi, and just a bigger more comfortable cabin. This will give Delta a more consistent offering for customers, and it’s going to come at a pretty nice price as well. I’m sure Delta is getting a great deal on the 717s, and all Southwest has to do is push them to the other side of the Atlanta airport.

The Losers
That’s great news for both sides. Who loses? Small cities may potentially lose out. The lucky ones will see fewer flights on bigger airplanes. The unlucky might lose out, but hopefully those 125 50-seaters that remain will be able to keep service to most of those cities, if not all. The other losers here are some of the regionals. I say “some” because some stand to gain 76-seat flying while others will lose. The biggest loser in my opinion is likely to be Delta’s wholly-owned subsidiary Comair. The airline has been shrinking for years, and now it will likely lose half its fleet. (It is the only operator of the older CRJ-100 so those are most likely going away.) This could be the end of that airline entirely, with the remaining big airplanes merged into Pinnacle?

The Rest
So is that everything here? Not quite. The pilots are also getting big pay raises out of this. Over the three-year term, rates will increase by 20 percent, sometime more depending upon the aircraft. Is Delta insane? How the heck is going to pay for that?

Well, buried in the contract somewhere are productivity gains. I don’t know the details on exactly what Delta gets, because those rules are pretty tough to get through. But Delta is going to get better production out of its pilots, and that will help to offset the hourly rate increase. Another offset is a reduction in profit-sharing. As we’ve seen many times before, variable compensation starts to shrink as unions fight for more in base pay.

Wrap Up
In the end, I like this deal as a passenger because the customer experience will dramatically improve. And I like this as someone who watches the industry as well. While I start to hyperventilate when I see such big pay increases, Delta is really getting a lot out of this deal in return. It helps when both sides have goals that align and are motivated to strike a deal. It sure paints a stark contrast to what’s been happening over at United lately. Now, we just have to wait to see if the pilots vote to take it or not.

[If you'd like to read the entire mind-numbing 400+ pages of the agreement, I've got it right here thanks to Holly Hegeman over at PlaneBusiness.]

Admittedly, American hasn’t shared all the details of its plan. That wouldn’t be very smart at this point, I suppose. But it’s shared enough at a high level so that it can make its case for massive cost reductions. You can read CEO Tom Horton’s letter to the troops with the high level plan to “not just to compete, but to win.” There’s the “win” phrase again. Ugh.

In short, Tom outlines a strategy of increasing revenue by $1 billion a year while cutting costs $2 billion a year, more than half of which ($1.25 billion) will come from employees. This is the magic plan. Let’s take this one side at a time.

Plan to increase revenue by $1 billion a year
The revenue plan has three parts to it. The $1 billion a year is expected to come from “network scale, fleet optimization, and product improvements.”

Network Scale
American has laid out an ambitious (and quite likely overly aggressive) plan to increase departures by 20 percent over five years from its cornerstone markets of LA, New York, Chicago, Miami, and Dallas/Ft Worth. That’s right. TWENTY percent. For the relatively mature industry we have here in the US, this seems to be very aggressive. I was going to guess that much of this would be from smaller airplanes with fewer seats, but then I saw Tom tell Terry Maxon that the increase would be more in the international arena than domestic. That makes me think that it’s less about regional jets and more about larger aircraft growth. That could mean some serious capacity growth. It’s starting to sound like the days of old when airlines mistakenly chased market share only to hurt themselves and everyone else in the process.

This isn’t just about the 20 percent increase under the American brand, however. This is also about increasing codesharing. Right now, it can’t grow its domestic codesharing business but it has proposed eliminating those shackles. Hello, JetBlue.

Fleet optimization
At first, this seems like a cost savings and not a revenue savings, right? I mean, the airline keeps talking about adding newer, more fuel efficient airplanes and retiring older ones. That has nothing to do with revenue. But that’s not what I think the airline is talking about here. This is really American talking about growing its regional fleet. Today, there is a very tight cap on outsourcing of flying on aircraft with more than 50 seats. American has maxed it out with 47 CRJ-700s, and that’s the only aircraft American has between 50 and 136 seats.

That’s a huge disadvantage for American versus Delta and United, both of which operate about 200 to 250 regional aircraft with more than 50 seats. American is getting aggressive, shooting for the right to outsource a boatload of flying on airplanes all the way up to 88 seats. In a minor bright spot for American’s own employees, American has also ordered Airbus A319s that will give it an option below 136 seats (maybe in the 120 seat range). That’s what American means by fleet optimization, having more aircraft in between the 50 and 136 seat range that it can use to better match seat supply with demand.

Product improvements
This is something that really has nothing to do with bankruptcy. American has already suggested it would improve the onboard product, but what can it do to actually goose revenues? Well, the new flat beds that it’s putting in business class on the 777-300ER aircraft are a good start. Hopefully that expands to the rest of the international fleet, because people aren’t willing to pay a premium for the inferior product in business class today. The new premium economy section could help as well, though that also reduces the number of seats so it relies on American being able to generate a good premium to make it worthwhile.

So that’s what we see on the revenue side. Bankruptcy should allow for more liberal codesharing and regional flying contracts. That’s really it. Now let’s look at the flip side.

Plan to decrease costs by $2 billion a year
Of the $2 billion in annual savings that American wants to see, $1.25 billion will come from employees. The rest will come from a variety of things that allow American to reduce costs – get out of expensive contracts, reduce rates for suppliers, ditch assets it no longer needs, etc. But as expected, American rests the bulk of the weight on employees.

The basic proposal (and it’s only a proposal at this point) is for every work group to give up 20 percent of compensation. That doesn’t mean salaries get cut by 20 percent, but it’s a combination of all types of compensation from benefits to productivity. The cuts vary by each group, and you can read all the union term sheets here.

Some will see pay reductions, all will see pensions terminated, and benefits will cost more for the employee if American has its way. There will also be major increases in productivity. For example, for flight attendants, American wants to increase the maximum monthly hours from 77 (domestically) to 100 which will result in an average of 80 to 90 hours scheduled per person month. I won’t get into the details of each workgroup’s proposed changes, but you should definitely take a look.

In return, what will employees get? There will be company-wide profit sharing that starts with the first dollar of income. Of course, that’s for the employees that don’t get a pink slip. American will be laying off 13,000 employees, about 15 percent of the airline’s total today, and it will come from all groups. We’ll see 1,400 management positions gone, 2,300 flight attendants, and 400 pilots.

But the biggest cut comes to mechanics and fleet service workers – more than 4,000 each. Those deep cuts will come thanks to more outsourcing. American will shut one maintenance base (Alliance, in Ft Worth) and it will start to outsource a lot of work so that it doesn’t need all these employees anymore. The TWU represents both these groups and leadership sounded downright sad in its conference call discussing the proposed cuts. The pilots and flight attendants, on the other hand, sound more angry. At least the pilots don’t sound surprised. The flight attendants strangely acted like they didn’t see this coming.

Let’s back up for a second. Twenty percent more departures in five years but 15 percent fewer employees? Seems strange to think about it, but it really is all about outsourcing.

We do need to keep in mind that these are not final. There will be negotiations and the ultimate resolution will undoubtedly be less dramatic than what we’re seeing here. Regardless, the employees that remain will need to be more productive and they won’t be compensated as well for the work they do. There will need to be more flexibility with work rules, including codesharing and regional flying.

In the end, this doesn’t sound much like a turnaround plan at all. It sounds like an airline continuing to push forward with its same old strategy, just with a new fancy lower cost structure to help it stumble into profitability. I find it hard to really become a believer in this plan, since it’s nothing really new at all. If anything, US Airways, Delta, and other potential buyers should be thrilled to see the current team not really proposing anything game-changing. It gives them a bigger opening to walk through.

The new rules don’t go into effect for a couple of years, but the impacts will likely start being felt sooner than that. After all, when pilots are given more rest, that means the airlines need more pilots to fly their schedules. So the airlines will need to start ramping up before the rule becomes law just to make sure that they’re in compliance. How many more pilots will an airline need? It’s hard to know since every airline is different. It’s not like they’re going to need to double the number of pilots they have or anything, but there will need to be more. Combine that with the end of the retirement holiday we’ve been living under for the last 5 years, and there are going to be a lot of job opportunities for pilots. (When the retirement age for pilots was raised from 60 to 65, that meant 5 years where no pilot would be forced to retire, and we’re getting to the end of those five years.)

Of course, when airlines need to hire more pilots to fly the same schedule, that means costs go up. Again, I’m not saying this is a bad thing. It’s just the way it is. So why do I say that small cities will be hurt most here? It has to do with the Flight Duty Period (FDP).

Today, pilots can be on duty up to 16 hours straight, and that’s called the Flight Duty Period. During that time, they can actually fly up to 8 hours (or more if there are unforeseen circumstances). Now, those numbers are changing depending upon when they fly and how many flights they have. So if a pilot comes on duty between midnight and 4a, then he can’t be on duty for more than 9 hours no matter what. If he comes on duty between 7a and noon, then he can max out at 14 hours on duty because that’s more normal for the body’s clock. (There are adjustments required depending upon how long the pilot has been in that time zone.)

But even if the pilot comes on duty at 8a, he can only be on duty for 14 hours if he has no more than 2 flights during that time. It slowly decreases the amount of time he can be on duty until you hit 7 flights. At that point, he can be on duty no more than 11.5 hours.

See how this is coming together? Small cities are the ones served by short hops, and regional pilots have the grueling task of flying many short hops during the day. That kind of flying is exhausting, and that’s why it’s those pilots who are going to see the biggest gains in terms of rest. Costs will go up most as a percentage for the regional airlines, it would seem to me, and that again puts pressure on costs to small cities that are already in trouble.

The rest of the rules impact pilots more broadly. While pilots could actually fly only 8 hours in a duty period before, it’s now up to 9 hours only if reporting between 5a and 8p. Overnight operations are still capped at 8 hours, but it’s important to note that there is no exception anymore. These times are hard cut-offs now. This changes when you have additional pilots on board for longer haul flights, but the framework is roughly the same.

When it comes to rest in between duty periods, that’s changing as well. Today, rest can be as little as 8 hours between the time a pilots is released from duty until the time he’s back on again. That hardly gives the opportunity for adequate rest in many cases. The new rule is 10 hours between periods, and that’s designed so that pilots can get 8 hours of sleep. That won’t always happen of course, but it is an improvement in the rule. And pilot are supposed to tell the company if they haven’t had enough sleep during that rest period. (I imagine that sounds better in theory that what will actually take place.)

There are other rules as well but we don’t need to get into the weeds here. The point is that this will help pilots to be more rested, and that’s a good thing . . . at least, most pilots.

There is a crazy carve-out here that exempts cargo carriers from the new rules, as I mentioned up top. Apparently, the cargo lobbying group earned its money, because this seems impossible to justify in any normal situation. Last time I checked, cargo pilots had the same value to their lives as commercial pilots, so if a certain amount of rest is deemed necessary for commercial pilots, then it should be the same for cargo. It’s probably even more important for cargo since they do much more of their flying overnight, against their natural body rhythm.

So are these rules good? I’m not a sleep scientist, so I can’t comment on if this change is enough, but the method that they settled on – trying to adjust to the body’s clock – seems smart to me. Yes, there will be a cost increase, but at least pilots will be better rested. It does, however, mean there’s even more pressure on the already-struggling small cities.

In Alan’s mind, he’s saving the airline from ruin.

There has been an ongoing dispute with labor for years at Qantas. This issue in particular centered around the pilots, mechanics, and baggage handlers. Most of the problems stem from a couple things. Qantas employees believe they deserve all the compensation in the world while Qantas management disagrees. Qantas is actively trying to go around them by setting up subsidiaries elsewhere, most notably with low cost carrier Jetstar which has employees with different work rules and pay rates.

This move has had the Qantas employees steaming for years, and it only got worse when Qantas announced it would set up a new premium airline in Asia as well. The assumption is that Qantas employees are not going to be a part of that enterprise because the pay and work rules for the Australian airline just don’t work in the world today.

Labor likes to point to the continued profitability of Qantas and how the airline can’t just push them aside in favor of cheap labor just to goose profits further. But Qantas is quick to respond that profits don’t come from the core international airline operation. That has been a money-loser and there needs to be changes in pay/work rules to get closer to what other airlines pay. That point is certainly up for debate in my mind.

The reality is that like in everything else, a compromise is necessary, but just as we see in the US political scene these days, none is at hand. There has been increasing industrial action from the labor groups with little strikes here and there. The mechanics have been working to rule and Qantas has seen performance suffer significantly.

Alan Joyce is Crazy … Like a Fox?
So what can Qantas do? It could keep negotiating in a situation where no deal will ever be made, or it could do something drastic. Alan chose Option B; he went scorched earth and shut down the airline.

Now why the heck would someone do that? It’s actually a clever move. (Don’t read that as me supporting it, but it is clever.) First, it shows the labor groups that Qantas is not screwing around. Alan is willing to shut the place down if the unions won’t come to the table and get serious about an agreement that works. Note that Jetstar, Qantaslink and JetConnect subsidiaries all kept running – it’s just Qantas itself that shut down. Qantas wants the unions to think that this will be a permanent solution if things don’t get resolved.

But more importantly, it pushes the government to get involved. The expectation had to be that by doing this on Saturday, the government would have acted swiftly and had the airline up and running again by the end of the weekend. That’s exactly what’s happening, though cancellations are likely to persist into the week as operations ramp back up. I think it probably took a little longer for the government to act than Qantas thought.

Qantas spent the weekend shut down but now, with the government’s urging, Fair Work Australia made the airline start flying again. The airline was deemed to be too vital to the economy to let it stay shut down, and that’s exactly what Alan was banking on. The airline was forced to re-start operations and labor has to stop all industrial action. Labor and management will enter into intensive negotiations over a 21 day period. if that doesn’t work, they go to binding arbitration.

And that’s probably what needs to happen here, because both sides seem completely loony to me with their thoughts about what’s right. If someone rational gets in the middle and strikes something fair, both sides will be unhappy but at least this will all be over.

So does that make this a smart move? It’s certainly a creative way to force the government into action, but it is also highly destructive of the relationship with every single employee as well as with the traveling public. Sure, it will end the industrial action but at what cost?

Some employees may have supported Qantas management before; not the unions, perhaps, but others. Now with this reckless grounding, employees have to be livid and somewhat nervous. I would start looking for a new job if this is how my senior management behaved. I certainly would have lost a great deal of respect for management.

If you pull a stunt like this and inconvenience thousands of travelers, you run the risk of pushing them off permanently. In the past, Qantas really didn’t have much competition within Australia or even to and from the country, but that has changed dramatically. Internationally, there are more flights every day from Asian/Middle Eastern carriers, and Qantas management isn’t shy to talk about it. That’s why it wants concessions from the union.

Virgin Australia Must Be Smiling
The biggest winner, however, is Virgin Australia. Even though Qantas wasn’t putting people on other airlines, Virgin responded quickly by offering discounted fares to Qantas fliers, lounge access for Qantas elites, and a bulked up schedule to accommodate the stranded folks. It also saw partners step in to help. Etihad offered to start flying routes on the airline’s behalf to pick up the slack.

For Virgin, it’s exactly what it needs. The airline has changed itself to focus on business travelers over the last year or so, and this is the perfect way to show Qantas loyalists what it can do. Those who have been burned by Qantas may not go back, or so Virgin Australia hopes. But Alan Joyce thinks that he’s found the way to success and he’s making that gamble.

Will people, employees and travelers alike, leave Qantas over this and look for better options? Qantas is betting that won’t happen, but I wouldn’t be so sure. Qantas has probably done serious harm to itself here. I would expect calls for Alan Joyce’s head to get louder and louder. But maybe that’s what the airline wants? Maybe, as the unions think, Qantas wants to shut down the old airline and start anew with cheaper labor and lower costs.

Now there’s a scary tale that you can tell at your Halloween party tonight.

And I thought I’d throw in a bonus topic this week for its insanity. Not sure how much readers know about Stelios Haji-Ioannou, but he is the man behind the “easy” name. The best known easy brand is easyJet, one of the largest airlines in Europe. While Stelios is still the largest shareholder, he doesn’t run the company. He has, however, inserted himself at times and made life difficult for all involved. Now, it appears he’s fed up and wants to start a rival airline, Fastjet or E-jet, to compete with, um, the airline he owns a big chunk of? Riiight. This one is just downright silly.

According to USAPA’s website, here’s what happened that day:

• When pushing back from the gate, the auxiliary power unit (a backup source of electrical power) and the Hot Battery Bus (a critical source of primary electrical power) both failed – in other words, the plane had no electrical power and no radio communications. None.
• After opening a window to verbally call down to the ground crew (the Captain’s only option), US Airways maintenance was able to restart the power unit, but offered no explanation as to why it failed or any reasonable assurance that it wouldn’t fail again.

So we have a couple issues here. US Airways did a thorough review to see what happened. According to the letter from the US Airways VP of Flight Ops that I’ve obtained, the airline tried to meet with the captain in person to discuss the review but she was unwilling. So they put the results in writing to her.

On the issue of the APU failing, no problem was ever found. The APU (auxiliary power unit) is like a mini-engine which provides power when the engines aren’t running. This is actually used to start the engines on the ground, but it’s not necessarily required for flight. If you’ve ever seen an engine started while you’re at the gate with a big generator nearby, then that’s probably a case where the engines needed an external start because the APU wasn’t working.

Back to this incident, the first entry in the logbook from the captain said “APU failed at gate, unable to restart.” According to US Airways, the mechanics did a test that found no fault with the APU and then proceeded to restart it at the gate without any trouble at all. The captain said she wouldn’t accept the aircraft unless the APU was fixed, but since the mechanics couldn’t actually find any problems that needed fixing, they deferred the issue as permitted by the maintenance program.

That was followed by a second entry from the captain saying:

After APU Auto Shutdown on gate with no external power connected, battery power lasted 3-4 minutes. Unable to restart APU or communicate on VHF [radio] #1.

So the APU failed and wouldn’t restart. US Airways pulled the Electronic Control Box (ECB), which the airline describes as the “brains of the APU.” The ECB records any abnormal events to help with maintenance. So the airline sent the ECB to Diehl Aerospace, which is described as “the repair subcontractor for Honeywell (the manufacturer of the APU).”

Upon review, no auto shutdown nor any failed attempt to restart the APU was recorded. Could the ECB have failed to record the incident? Unlikely. It recorded minor issues before and after the event so it was functioning properly. Diehl sent the ECB back saying no problems were found, and that ECB went back into service with no further issues. The APU apparently was working just fine.

But what about the radio not working? Was there an issue preventing that from functioning properly? Well, that assumes that the APU did shutdown. All we know for sure is that the APU didn’t automatically shut down. But as US Airways notes in the letter, “the ECB does not record a ‘commanded’ shutdown.” So maybe there was a commanded shutdown by someone on the aircraft? I have no clue because it’s not spelled out, but let’s assume that the APU was in fact shut down for one reason or another. What about those other issues that followed?

Apparently the airplane worked as designed. When on the ground, if the engines aren’t on, the APU isn’t on, and there is no ground power (basically, when the airplane is plugged in to a source at the airport), then the batteries will power many of the electronics. But there’s a catch.

To avoid completely draining the batteries while on the ground, the system will cut battery power when voltage drops below 23V for 16 seconds and the airplane is on the ground. When that happens, that VHF radio #1 won’t work. So that’s probably what happened here, and it worked as designed. Was the battery draining too quickly? Not according to US Airways. The airline says “the two main batteries were . . . tested by an outside source and have also been returned to the Company with no faults found.”

So the APU worked, the batteries worked, and the airplane in general seemed to work as advertised. The only thing I don’t see mentioned is anything about the “Hot Battery Bus” not working. The only mention of the hot battery bus in the letter is this:

. . . The [automatic battery shut off on the ground] will not disconnect the batteries when either one is discharged below 23V while in the air; they will continue to power the hot battery buses, DC BAT bus, DC ESSENTIAL bus, and the AC ESSENTIAL bus as long as possible.

So that seems to say that the bus (or buses), which provides continuous power to vital systems, was working. But no further mention is made beyond that. In short, US Airways says “this aircraft performed exactly as it was designed.”

Does that mean the captain fabricated what happened? I wasn’t there, so I don’t know. The only clue we have is from the US Airways letter which says “there is no discipline contemplated” after reviewing this incident. US Airways says it just wants to “put closure on the incident.”

It seems to me that if a pilot fabricated a maintenance problem, and it was proven conclusively, then that would be grounds for discipline of some sort, right? So since there is no disciplinary action here, maybe they’re chalking it up to a misunderstanding or confusion about the situation. Either way, it puts a serious hole in USAPA’s ongoing campaign to question the airline’s safety procedures.

[777 (not an A330) APU exhaust photo via Flickr user Robbie 1/CC 2.0]

But let’s start with what’s important. If you’re flying, should you be concerned about a slowdown? It’s important to note that the slowdown is only being effected by “East” pilots from the pre-merger US Airways. That means that the Phoenix hub is running as usual. In fact, that’s one of the things that makes the evidence so compelling. The West operation is running just as it always has while the East has gotten much worse since May 1.

The epicenter of these problems is Charlotte, where USAPA has its strongest pilot support. If you’re flying through Charlotte, you may have had some problems during the last three months, and that could continue until (if) an injunction is issued. On time performance has suffered and there have been a few more cancellations each day, but it’s not a disastrous slowdown at this point. Still, it’s enough to get the airline to act.

So, should you stop flying US Airways on the east cost until it’s fixed? I say no; not unless you want to support illegal job action as a tactic for negotiations. If you stop flying US Airways, then those slowing things down will have achieved their goal. And remember, the West operation isn’t impacted, nor is the large Express operation. Hopefully this will all end quickly anyway now that the courts are involved.

How Bad is the Slowdown?
How bad is it? It’s not United summer of 2000 bad, but the actions seem pretty awful. Here is the motion. Take a look at this supporting brief for the juicy details. Also, here’s a report from an independent expert Darin Lee who performed statistical analysis to show how the changes are highly unlikely to be simply due to chance. (Take note, UNITE HERE. This is how to do analysis.)

There are really two parts to this. First, has there been a pilot slowdown? The statistics seem to conclusively point to “yes” as the answer. But there also has to be proof that the union is behind it, supporting it, or not doing anything to stop it. Let’s start with point one. Here’s what’s happened:

• The rate of the number of maintenance issues written up by pilots as a percent of total flights has usually been just below 25 percent. Since May 1, that has increased by half and stayed there. Here’s a chart:
  
• The percentage of East flights delayed due to pilot action has increased from a norm of 1.31 percent up to 2.85 percent since May 1.
• Previously there was an average of fewer than 7 fatigue calls per month. That’s more than doubled since May.
• Taxi times for mainline aircraft on the East were statistically about a quarter minute longer than Express. Since May, that has spiked to over 1 minute. Taxi times themselves have lengthened as well.

The end result here is that on-time performance in the East has dropped by 11 points and an additional 9 to 10 flights have been canceled each day due to pilot action. Once again, this is ONLY the EAST PILOTS. The West pilots and Express operations have seen no change, and that makes the evidence even more damning.

So, it seems pretty clear that there is a slowdown here, but the harder part is proving that the union is behind it. See, the union knows that it’s illegal to have any sort of job action unless the National Mediation Board releases the two sides from negotiation and the cooling off period has passed. That hasn’t happened here, so this kind of job action would be illegal.

Of course, that means the union, if involved, will do what it can to cover its tracks. It is, of course, already denying that it has anything to do with this, but it has left plenty of clues according to the evidence submitted by US Airways. Though there have been issues before this year including a flawed safety culture survey and incorrect information about what is considered safe to fly, the rhetoric ramped up this year.

Get On Board for Safety
The whole effort seems to be disguised as a safety campaign, something that has been used before as a tactic for disrupting operations at other airlines. US Airways strings together a picture of a campaign linked by a central campaign for being “On Board” the slowdown effort.

All of the information below comes from the US Airways supporting information. Though many of the actions came from anonymous email addresses and prepaid cell phones, there were plenty of mentions of this in union communications as well.

The union even started handing out lanyards with “Safety First” and “I’m on Board” on them. When a West pilot asked about them, the union’s communications chair said:

The lanyards are not however just a ‘party gift’ handed to everyone; they are handed to those, from any domicile, who have first demonstrated that they are onboard with the idea that safety comes before everything else . . . there are pilots roaming the system giving them out to those who demonstrate they are on board. If you’re flying, demonstrate in some fashion that you’re on board and have one of these pilots in the back, I would imagine you’ll get one.

Distance Learning Delays Not Safety-Related
So where else did this campaign show up? For example, calls were made to pilots encouraging them not to complete their FAA-mandated distance learning courses until the day they were due, May 31. These calls again referenced being “On Board” and clearly had nothing to do with safety.

Three days before the deadline, 897 pilots had failed to finish the learning, and only 1 of those was from the West group. That’s about 900 out of 2,600 active East pilots, or about a third. What’s worse? Sixty percent of those pilots had completed 94 percent of the learning, so they were just waiting for the deadline. Had US Airways not been able to get a waiver from the FAA for a couple of days, it would have had to cancel flights because the pilots weren’t going to be legal to be scheduled for multi-day trips that extended beyond May 31.

Emails and Text Messages Leave Ample Evidence
The informal communications got even bolder. One email told pilots “to engage in slow taxi, stay home if they are fatigued, and refuse aircraft with legal [Minimum Equipment Lists] with the express purpose of “prov[ing] that [the pilots] are willing to endure a summer of inconvenience in exchange for decent wages.”

Decals were placed around the system with words like “+16” and “Time to get serious about a contract BLOCK +16.” The +16 reference refers to pilots arriving at the gate 16 minutes late so it counts as late in the Department of Transportation statistics.

Another email said “[b]eing ‘ON BOARD’ means . . . do[ing] what you can to help our cause,” including being “15 MINUTES LATE EVERYWHERE.”

A note was found on an aircraft stating “Management is very upset about the deteriorating performance of our airline. It’s time to turn up the heat. Until that time, the e-mail WE WILL Prevail[.] Pass this along to another pilot that you know is “ON BOARD[.]”

As if that wasn’t enough, the pilots turned on themselves and started calling out people who weren’t willing to obey. A broadcast text message went out on July 24 of this year saying:

Seems like we have our first winner for the COMPANY SUCK UP AWARD… PINK PANTY AWARD or whatever you want to call it. This A330 CAP on Reserve, on July 15th had 1 Day Available, suddenly on July 16th he is on a FRA 3 day trip. Congratulations go to [rank and file US Airways pilot] XXXX [name deleted by Cranky] as our first winner. Keep up the good work by screwing all your fellow pilots that are trying to get a contract we deserve. If you have a good reason please let everyone know.

They then actually placed a card in his mailbox saying “CONGRATULATIONS! You’re a WINNER! Your heroic effort to help management achieve their bonus checks has earned you the Pretty Pink Panties award[.] Do you want a new contract? EARN IT[.]”

Pretty awful stuff, right? As mentioned above, the union unsurprisingly argues that it was not behind these efforts. That means that this would have been just individual pilot actions that it can’t be responsible for, but that seems less likely after reviewing the filing. But even if that’s the case, how can the union explain why it hasn’t done anything to try to put a stop to these actions? It has a responsibility to do so and appears to have not acted, or used lukewarm responses at most.

With this mountain of evidence, I imagine it’s going to be a tough ride for the union with mounting legal bills. Once again, I feel terrible for the West pilots and really even worse for the East pilots who are just doing their jobs and not participating is this. What happens next? The union has 14 days to respond and then it goes from there. It could take weeks or even months depending upon the different tactics used by each side.

In the end, we’ll see if the court agrees, but there is clearly some solid statistical analysis showing evidence of a slowdown. The question is – will the union be held accountable for these actions?

]]> http://crankyflier.com/2011/08/01/us-airways-sues-pilots-union-to-stop-illegal-slowdown-effort/feed/ 44 http://crankyflier.com/2011/07/28/us-airways-pilots-union-earns-a-long-overdue-cranky-jackass-award-for-using-safety-as-a-negotiation-tactic/ http://crankyflier.com/2011/07/28/us-airways-pilots-union-earns-a-long-overdue-cranky-jackass-award-for-using-safety-as-a-negotiation-tactic/#comments Thu, 28 Jul 2011 10:45:26 +0000 CF http://crankyflier.com/?p=7688 I’ve written many times about the US Airline Pilots Association (USAPA), and it’s never been in a good light. This week, the group which represents the pilots at US Airways has once again topped itself by taking out a full page ad in USA Today talking about how US Airways is unsafe. Though there are other groups in the running, I think USAPA has demonstrated that it is the most ineffective, poorly run union group out there. For the misguided representation it provides its pilots, USAPA gets the Cranky Jackass award. This has been a long time coming.

You may already know the story. USAPA was created when the US Airways “East” (pre-merger US Airways) pilots didn’t like the seniority agreement that was decided upon in binding arbitration (yes, “binding” is apparently a loose term) with the US Airways “West” (pre-merger America West) pilots. So they marched off and voted in a new union, casting off the arbitration result. The West pilots didn’t like that (it’s been working its way through the courts), but they didn’t have the numbers to prevent the move. You can read more of the history here. In short, USAPA has done absolutely nothing good for its members, but it wrongly likes to blame US Airways management for its failings.

And that brings us to USAPA’s current strategy . . . try to burn down the company and apparently put all of its members out of a job.

The latest shameful tactic is the taking out of a full page ad in USA Today claiming that US Airways is unsafe. Let’s see. You work for an airline that pays your salary with revenue that comes in the door, and now you’re going to turn around and try to shut off that revenue by falsely claiming your airline is unsafe? Simply pathetic. It’s such a blatant negotiating tactic, but how will the general public react? That’s unclear, though this hasn’t received much press at all considering all the more important “real” news in the aviation world in the last week.

The ad itself used a single pilot incident that happened on June 16 to show the supposed danger of flying the airline. Apparently there was a flight scheduled to cross the Atlantic from Philly that evening and there were a couple of mechanical issues. There are some mechanical issues that aren’t considered crucial to be fixed, and that appears to be the case here, but the captain refused to fly the airplane and then, according to the union, she was escorted out of the airport by corporate security. The next crew refused to fly the airplane as well. Over the next couple hours, some maintenance work was done and the airplane went on its way with a third crew.

This is why the union says US Airways is an unsafe airline. It says the airline is intimidating its pilots and pushing them to fly even if it’s not safe. Then if they refuse, it has security remove them. Sounds bad, right? Too bad it’s a crock.

Now, regarding the mechanical incident itself, I don’t know whether the captain did the right thing by refusing to fly the airplane. I do know that the FAA found US Airways did nothing wrong. Here’s the statement:

The FAA manager assigned to the US Airways certificate reviewed the June 16, 2011 incident. The APU shutdown the aircraft experienced is a failure that pilots are well aware can happen and that they are trained to recognize. The battery apparently was depleted by attempts to restart the APU. Flying an aircraft with an inoperative APU is not an unusual event and normally poses no safety issues when proper limitations are applied. The Captain simply chose to exercise her pilot-in-command authority of not accepting an aircraft. Our information indicates that US Airways followed their approved MEL procedures, and all maintenance procedures were followed in accordance with the operator’s approved maintenance program. We found no violations of Federal Aviation Regulations.

That being said, if a captain doesn’t feel comfortable flying an airplane, then it’s his or her right to deny it. The problem arises when that privilege is abused just to delay or cancel flights without good reason. I’m not saying that happened here. I don’t know, and frankly, it’s not central to my point. I have no problem in theory with her walking away from the flight.

But why would security come escort the captain from the airport? USAPA wants you to believe it’s because she refused to fly the airplane. Not quite. According to US Airways, “the Captain was escorted out of the airport by corporate security (after being released from duty) not for her refusal to fly but for her comments made to customers regarding the safety of the aircraft.” Unfortunately, I don’t know details about what she said to the passengers, but it was apparently highly inappropriate. See more in this a.net discussion. I would have had her carted off the airplane as well.

In reality, there is nothing pointing to US Airways being unsafe but rather more evidence of the airline having good safety practices. It recently passed the IATA Operational Safety Audit, for example. But that won’t stop the union from trying to sully the airline’s reputation. (Get it? Sully? I crack myself up.)

In the end, USAPA simply wants to damage US Airways as if this will somehow convince the airline to throw a ton of money at the union and solve all its problems. Unfortunately, the union needs to solve its own problems regarding seniority before it can even be ready to talk to management, and it doesn’t seem any closer to doing so. I feel really bad for those pilots who never even wanted this union to represent them in the first place. This whole thing is simply pathetic and more than worthy of the Cranky Jackass Award.

[Thanks to Johosofat for the excellent Cranky Jackass Award]

]]> http://crankyflier.com/2011/07/28/us-airways-pilots-union-earns-a-long-overdue-cranky-jackass-award-for-using-safety-as-a-negotiation-tactic/feed/ 127 http://crankyflier.com/2011/06/14/unite-here-strikes-back-tries-to-cover-bad-analysis-by-insulting-cranky-earns-the-jackass/ http://crankyflier.com/2011/06/14/unite-here-strikes-back-tries-to-cover-bad-analysis-by-insulting-cranky-earns-the-jackass/#comments Tue, 14 Jun 2011 10:45:34 +0000 CF http://crankyflier.com/?p=7460 If you decide to put out bad analysis, as UNITE HERE did last week regarding Lufthansa complaints, and someone calls you on it, what would you do? The smart answer would probably be to just let it go and stop calling attention to the work, especially since it has more holes than Swiss cheese. But fortunately for us, UNITE HERE has decided to go the opposite route.

The union is using one of oldest tricks in the book: going after my credibility to muddy the water. This is just dumb. They really shouldn’t want to bring more attention to a flawed report like this. Now I’ve just dug in deeper and found even more problems with it. While I was waffling before, now I’m not. UNITE HERE has truly earned the Cranky Jackass Award.

You can read the union’s entire response here (pdf) if you’d like, but I’ll pull out the most fun parts. Let’s start with the opening.

One of the things I appreciate about your site is you are very open about your relationship to companies in the airline industry. And just one month after Lufthansa gave you a free round-trip, business class ride on its A380 from San Francisco to Frankfurt, perhaps I should not be surprised at your dismissive response to my report.

Ah yes, the back-handed compliment. A time-honored tradition that’s used to cover bad work. If someone calls out real issues, just call his or her credibility into question but look completely pleasant while doing so. This takes the focus off your bad analysis and tries to shift the issue. (Sounds like the author may have a future in politics.) It’s true, I’m very open about these things, and I did just fly Lufthansa at the airline’s expense. That doesn’t mean I won’t gladly rip Lufthansa a new one if it’s deserved. The problem here for the union is that it’s not.

You can read the rest of the response yourself if you’re interested in more sugar-coated insults, but let’s focus on the weak defense of the report itself and break that down.

The Department of Transportation data in the report is real, and to my knowledge is the only reliable U.S. source of compiled complaint information on international
airlines. If the DOT is willing to use these numbers to “to determine the extent to which carriers are in compliance with federal aviation consumer protection regulations,” then they’re good enough for me. Even if I am just a research analyst at a union.

*sigh* The issue is not whether this is the only place to get complaint data or not but whether or not it’s statistically valid and can be used to explain a trend or not. In this case, the year-over-year change in complaints from 2009 to 2010 moved by roughly less than one-thousandth of one percent over total passengers carried by Lufthansa to and from the US (using my rough passenger estimate). Even the initial number itself is so tiny that it’s not significantly different from zero. So regardless of what the purpose of the complaint reports are in the eyes of the DOT, that doesn’t magically mean that we can consider each number valid for any kind of analysis.

You’re right, I could have used the raw numbers, but I sort of agree with you that the raw numbers themselves aren’t incredibly exciting on their own. They’re small
because, well, how many people actually go through the effort to submit their airline complaints to the U.S. government? (If you care about an answer, you can look at the DOT analysis for the new passenger rights rule, where the DOT uses the ratio that every 1 complaint submitted to the DOT represents about 61 complaints submitted to the foreign airlines.

Excellent. Let’s just forget about using raw numbers because they aren’t “exciting.” I see. So we’re not looking for statistical validity here. We’re looking for excitement. You can apply any ratio you want to these numbers, but that still doesn’t make the small change valid. And this ratio is just an estimate by the DOT anyway, so using it would make a statistically insignificant change even less valid, if that’s possible.

The result of that comparison was clear. Lufthansa complaints went up, Air France and British Airways complaints went down. Is the sample number of complaints
small? Yes. But if the increases were random, would Lufthansa have seen them in 7 out of 8 top categories from 2009 to 2010? If they were random, wouldn’t Air France and British Airways have seen more fluctuation too?

This is my favorite part. I hadn’t even touched the Air France and British Airways numbers in my initial post, so I should thank the union for giving me even more firepower to show how awful the analysis is. The result is far from “clear” as proposed.

When I spoke with the research analyst, he told me that he didn’t bother looking at the monthly complaint reports. He just looked at the year-end summary and called it a day. That makes the analysis even worse because it doesn’t look for outliers. And that’s exactly why BA’s numbers are so different. In 2009, BA saw 347 complaints while dropping to a mere 120 in 2010. That’s great improvement, right? Wrong.

A look at the monthly data shows that in October 2009, BA received an incredible 244 complaints for reservations/ticketing/boarding. Why? According to the Bureau of Transportation Statistics, “The increase in the number of October complaints is attributed primarily to British Airways’ erroneous offer of $40 fares between the United States and India.” That’s an outlier and can’t be used to judge overall performance for an entire year. Guess what happens if we just substitute a more typical monthly result that month? We see an increase in complaints year-over-year approaching 20 percent. Fun with numbers, right? (Not that this is a significant change either.)

I highly recommend reading the entire response. In particular, I like the union’s effort to call into question the safety of the engines on the A380. Enjoy.

]]> http://crankyflier.com/2011/06/14/unite-here-strikes-back-tries-to-cover-bad-analysis-by-insulting-cranky-earns-the-jackass/feed/ 23 http://crankyflier.com/2011/06/09/when-statistics-attack-union-report-on-lufthansa-complaint-spike-is-simply-misleading/ http://crankyflier.com/2011/06/09/when-statistics-attack-union-report-on-lufthansa-complaint-spike-is-simply-misleading/#comments Thu, 09 Jun 2011 10:45:49 +0000 CF http://crankyflier.com/?p=7442 One thing that’s certain is that you can make statistics say pretty much whatever you want to get your point across. That’s exactly what the UNITE HERE union is doing with what appears to be a smear campaign against Lufthansa. After talking with the research analyst behind the report, I still can’t figure out why the union is bothering with this.

Earlier this week, I received an email from news@lufthansaalert.org with a report produced by the Lufthansa Traveler Alert site. That site is apparently the new campaign by the UNITE HERE union to make Lufthansa look bad. The report, titled “Customer Complaints Spike at Lufthansa, Decrease at British Airways and Air France,” was six pages of hilarity. See, the union has opted to use percentages despite the incredibly small numbers involved.

As highlighted in the email, there were four key points of the report. As I mentioned, you’ll notice that only percentages are used in all of these. That’s because the numbers are so incredibly small that it’s impossible to actually take them seriously. But when you use percentages, it looks a lot worse. Here are the four points.

Point #1 – Last year, Lufthansa’s total passenger complaints went up 70%. Meanwhile British Airways and Air France both saw decreases in total complaints.
Sounds awful, right? Well let’s use real numbers. In 2010, Lufthansa received a whopping 118 complaints via the DOT versus 68 in 2010. I did a little back of the envelope math and with around 30 flights each way per day between the US and Germany and a 75 percent load factor, Lufthansa serves around 5 million customers in the US in a year.

You think that change in the number of complaints is in any way an indication of a serious issue? I highly doubt it.

Point #2 – Lufthansa customer complaints increased in 2010 in seven of the top eight complaint categories: flight problems, baggage, rescheduling/ticketing, refunds, fares, oversales and disability access.
As you can imagine, since we’re already looking at a tiny sample size, breaking it down into categories makes it even worse. Baggage complaints were highest with 32 for the entire year. That’s up from 22. Next is a tie between Flight Problems and Reservations (not rescheduling as they suggest)/Ticketing/Boarding at 23. Everything else is single digits. Were they up? Sure. But it’s hard to consider this a trend with such a tiny sample size.

Point #3 – When 2006 data is compared with 2010 data, Lufthansa saw a 23% increase in total complaints while British Airways and Air France saw complaints drop by over 30%.
Point #4 – In each of the top four customer complaint categories – flights problems, baggage, ticketing/rescheduling/boarding, and refunds – Lufthansa trended worse than did British Airways and Air France when 2006 and 2010 data are compared.
This is rehashing the exact same thing. In 2006, Lufthansa received 87 complaints. It went down to 84 in 2007, then up to 61 and up to 68 before finally getting to 118 in 2010. What’s to say it’s not just an anomaly? The parting shot in the report tries to address that.

So far in 2011, with just January and February numbers tallied, Lufthansa has had over twice the number of total complaints filed compared to its total in Jan-Feb 2010.

Very convenient that the data was cut off in February. The March numbers have been out for well over a month and this report just came out, so March could have been included. Why wasn’t it? Well, because Lufthansa had only 8 complaints versus 21 the year before. Oops, might as well just leave out any periods that don’t help the cause, right? This is just nuts, but that brings up the biggest question.

Why the heck is the union doing this?

Normally, you would think that the union was looking to sign a better contract or get more people hired to help fix the problem, but that’s really not applicable here. UNITE HERE only represents the North American-based employees at LSG Skychefs, the catering business. So, the union has nothing to gain if Lufthansa made the strange decision to try to rectify these “problems.” None of them seem to have been about catering, so it’s not like the union can claim the airline needs to hire more of its workers to fix the problem. And even though it continues to be in ongoing negotiations with Lufthansa about a new contract, this certainly won’t impact those negotiations at all, at least not positively.

I spoke with the research analyst about the report and he really kept repeating the same two points.

1. “No comment about negotiations except that they’re ongoing.”
2. “We believe the data in the report speaks for itself.”

Unfortunately for the union, it’s the lack of data that really speaks volumes. This is just a misleading piece of propaganda that falls flat on its face.

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