United To Keep U.S. Planes Flying
Wednesday - May 18, 2005
The popular cowboy philosopher Will Rogers once said, “Nothin’s like it used to be and probably never was!”
Well, that’s certainly true with America’s airline industry, and it was brought even closer to home when the “rock” of our airline industry, United Airlines, defaulted on the once sacrosanct pensions of 120,000 employees, nearly half of whom are already retired, with some being our own friends, family and neighbors right here in Hawaii.
United is about $9.8 billion short of its pension obligation, but has been able to negotiate some help from the government- sponsored Pension Benefit Guarantee Corporation to the tune of $6.6 billion. The PBGC is already operating at more than a $23 billion deficit, and the United deal could open the floodgates for other desperate airlines in bankruptcy. The PBGC, of course, is funded from your and my taxes.
Last week, United convinced Judge Eugene Wedoff, who approved the pension cutbacks, that this is the only way the airline can exit from Chapter 11 bankruptcy this year and still keep flying, maintaining an income and preserving jobs. The PBGC considers the settlement a “matter of last resort”, and Wedoff calls it the “least bad” of available choices.
As calamitous as this may seem for United’s retirees and prospective retirees, let’s look at the whole issue in perspective. Granted, even before the events of 9-11-01, our major airlines could have been operating much more efficiently, and labor agreements concluded less generously. But in great part, because the terrorists used commercial airliners as weapons, our major airlines took the brunt of the economic body blow absorbed by our nation that day, and have never really recovered.
Recall that all commercial aircraft were grounded for several days. Then the public remained reluctant to fly for several months. Security costs soared and, even with government subsidies, continue to erode the bottom line. There have been “fare wars” and increased competition, and, most recently spiraling fuel costs. Even with canceled aircraft purchases, renegotiated labor agreements, consolidated schedules, and pared down in-flight amenities, the industry — with only a couple of exceptions such as Southwest and Jet Blue — has continued to struggle. But how many United employees would have been satisfied with Southwest’s or Jet Blue’s salary and benefits package all these years?
Historically, airline pilots’ work schedule, pay and benefits (including free family travel) have been notoriously generous, frequently allowing a pilot to pursue two moneymaking careers simultaneously. Interestingly, United had already renegotiated its pilot’s compensation package. A Denver-based ramp serviceman of 30 years said, “I had expected to retire at age 55 with about $3,000 a month, but now it will be closer to $1,700, and I’ll probably work until at least age 62.”
A 16-year customer service agent was more philosophical: “At least United will continue to be a viable company as I approach retirement.”
Yes, continued sacrifices are likely to be required of all major airline employees across the board. We’ve already seen it with our own airlines, Aloha and Hawaiian. And that must include commensurate cutbacks and sacrifices by senior airline executives in their own salaries, benefits and bonuses. Our commercial airline system is so vital to the health of our economy that the alternative is simply untenable. No one knows that better than we here in Hawaii. In non-stop service from Hawaii, United provides 100 percent of flights to Denver, 50 percent to Chicago, 33 percent to Los Angeles and 27 percent to San Francisco.
Perhaps most importantly, we must cut through the emotional rhetoric of fixing blame for the situation — not airline executives or employee unions, not government policy or corporate greed. The blame goes squarely on the Islamic fundamentalist terrorists who, on 9-11-01, thrust this war upon us; a necessary war costing billions of dollars which could have otherwise gone to domestic priorities and programs.
The point is, similar sacrifices being made today by millions of Americans in various ways — especially our military men and women— must be seen in the context of the war that necessitated them. And in this case, just as the name of the airline implies, we must all stand “united” in our sharing of sacrifice and support for one another.
So the next time you fly United — or any airline for that matter — you could at least say to the employees you encounter, “I truly appreciate the sacrifices you are making to keep us all flying. Thank you!”
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