Holiday woes signal trouble ahead for air travel

Delays and errant workers a sign of industry turmoil.

The nation's airlines are going through the most wrenching transition in their 80-year history, and this holiday season travelers are getting a taste of what the future may be like.

Besides the cold, snow, and ice which often foul up Christmas travel, this year's record number of fliers have had to contend with fewer available flights, mountains of misplaced luggage, and, in some cases, overworked and less than helpful airline staff - all symptoms of an industry in the midst of a historic downsizing. Airlines are cutting back on routes and some may fold altogether.

It's a winter of discontent for airline employees, in particular, who face deep wage cuts that may or may not protect their jobs. Labor relations have long challenged the industry, but now the internal turmoil is becoming more apparent to passengers.

This, coupled with winter snows, adds up to a perfect storm affecting travelers like Ken Nicolson this week: His usually hour-and-a-half trip from Boston to Buffalo turned into almost 24 hours this year - about three times what it would have taken to just drive. He has done this holiday circuit for seven years. And "this year is the worst," he says. By far. When he finally arrived, his baggage was no where to be found.

While unions - particularly at troubled US Airways - have denied any organized effort, the large numbers of baggage handlers and flight attendants who called in sick indicates the stress airline employees are under. As the carriers' single largest cost center, they're the ones taking the brunt of the cost cutting, seeing their salaries reduced by as much as a third or more, even as they're asked to work longer hours for fewer benefits. That combination is having an impact on morale in a once-glamorous profession. The prospect: a permanent diminution of wages and status as discount employees.

"There's a lot of frustration among the employees, they've made significant sacrifices to keep their airlines running, their wages in many cases have been continually eroded," says George Novak of the Aviation Institute at George Washington University in Washington. "At some point it becomes important for the public and the air carriers to recognize those sacrifices."

Labor relations in aviation have historically been rocky, in part, because they are subject to the Railway Labor Act (RLA). Passed back in 1933, it was designed to prevent any labor-based disruption of the nation's transportation system.

Under it labor contracts don't expire, instead they have "amendable dates" which signal when contracts are to be renegotiated. The RLA also requires a series of steps before any kind of job action be taken, such as a strike or a lockout. It can take years before new contracts are in place. A study in the Monthly Labor Review found that the average airline negotiation lasts 1.3 years, and can go on as long as six years. That leaves workers frustrated and sometimes resorting to wildcat actions like unauthorized sick-outs to remind management of their importance.

"The unions are denying any role in this weekend's [apparent sick-out]," says Mr. Novak. "But if it wasn't some type of organization, then it was one of the oddest coincidences in airline history."

Over the years, each side has taken advantage of the delaying tactics made possible by the RLA. When times are good for the airlines, management attempts to delay negotiations until an economic downturn when there are fewer profits for salary increases. Workers prefer to use the delaying tactics when things are bad, hoping to renegotiate higher raises when times are good.

This year, the cycle has been thrown off by the major airlines current economic crisis - they're predicting losses over $5 billion this year. And that has created even more frustration than usual for employees.

"Unfortunately for labor, at the moment it's between a rock and a hard place, because the legacy carriers are either in bankruptcy or near to it," says Dale Oderman, a professor of aviation management at Purdue University in West Lafayette, Ind. "Several unions have already been forced multiple times to make concessions so they can keep their jobs and their companies alive."

Some analysts contend that has bred unprecedented cooperation between management and labor, who find themselves forced to sink or swim. But it's also created a lot of anger for passengers. Fran, who didn't want her name used, describes an 18-hour "nightmare" trip from Washington to Boston on Sunday. Her US Airways flight was diverted to Manchester, N.H., after which about 100 passengers waited almost three hours in the cold, wind, and snow to find a place to sleep. "It was the inability of USAir to get people to a hotel in the wee hours of the morning," she says. "And, nobody from USAir at any point during this stressful night asked, 'May I be of help?' People are angry."

The severity of the weather problems this weekend was exacerbated by staff shortages - even without the large number of those who called in ill, according to some airline employees. They blame the airlines for not preparing properly for what they knew would be a peak travel time. The airlines deny that. But there is a general consensus that some kind of reform of the aviation labor laws is necessary in the future improve labor relations.

"Something's got to fundamentally change, and it's across the board," says Professor Oderman.

One change consumers can expect in the future is higher prices. Right now, pressure from the low-cost carriers is making it impossible for the major carriers to raise their prices to help stem their red ink. That's in part because carriers like Southwest and JetBlue were able to hedge their prices for fuel, the airlines second-largest cost. Those discount carriers are paying as little $35 or $40 a gallon for fuel. Most of the major carriers weren't financially able to hedge, and are paying closer to $50 a barrel. Eventually, low-cost carriers will pay as much for fuel as the majors. The low-cost carriers also have lower maintenance costs, in part because they're flying newer planes. That, too, will eventually change.

But in the meantime, before any reform of labor relations can take place, the major airlines have to find a way to stabilize their economic situation. "The only thing that the airlines really can work with right now that can have a big impact on savings is the cost of labor, and so that's what they're focusing on," says David Stempler, president of the Air Travelers Association in Washington. "It's a painful situation for these employees that are going through it, but that's the reality: There's only one thing worse than lower pay, it's no pay."