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AMERICAN AIRLINES PILOTS' STRIKE OF 1999.   Term Paper ID:26570 Click to get this paper

Essay Subject: Examines reasons for sick-out, legalities, issues at stake, management responses, assessment of settlement, court fine against union.... More...

10 Pages / 2250 Words 7 sources, 9 Citations, TURABIAN Format $40.00 Return to List of Papers

Paper Abstract: Examines reasons for sick-out, legalities, issues at stake, management responses, assessment of settlement, court fine against union. Paper Introduction: THE PILOTS STRIKE AGAINST AMERICAN AIRLINES-FEBRUARY 1999 Introduction This research examines the Allied Pilots Association strike against American Airlines in February 1999. Technically, the labor action by the Allied Pilots Association was not a formally called strike, as the services of pilots were denied to American Airlines by individual pilots in the hundreds calling in as sick and unable to work. Legally, however, the federal court system treated the actions of the pilots against American Airlines as a strike. Presentation of the Findings The findings of this examination are presented in three major discussions. The topical foci of these discussions are (1) the issues precipitating the strike, together with the posi Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. Assessment of the Strike Outcome One outcome of the strike was that American Airlines was required tocancel approximately one-third of the carrier's flights over the durationof the strike. AmericanAirlines cancelled an average of 73 flights on each day of the strike, ora total of approximately 7,3 cancellations. The strike began on Saturday 6 February 1999 and a fullschedule of flights did not resume at American Airlines until Tuesday 16February 1999. [ii]American Airlines, Inc., Plaintiff, vs. A second likely outcome from the strike for American airlines is thelikely lasting enmity from its pilots that likely will translate into muchmore difficult negotiations when the current contract with the AlliedPilots Association expires. Over the short-term, American Airlines was the winner over the AlliedPilots Association in the strike of February 1999. The Settlement of the Strike American Airlines and the Allied Pilots Union, on 9 April 1999,entered into negotiations to end the labor dispute. Without directlychallenging the assertion by American Airlines that it had no legal rightto strike under the provisions of the contract, the Allied PilotsAssociation did not overtly call a strike, but, rather, relied on a sick-out strategy by the pilots. The consumerclass action suits, however, are not likely to result in any additionalcosts to either the Allied Pilots Association or individual pilots employedby American Airlines. [ix]"Southwest Airlines' Herb Kelleher: Unorthodoxy at Work,"Management Review 84 (January 1995): 9. This statement reflected thestance of American Airlines that the management did not intend tonegotiate. Continental Airlineshas been in and out of bankruptcy over the last three decades and hasseldom enjoyed good relations with its employees. In the wake of the February 1999 strike by the Allied PilotsAssociation against American Airlines and the cancellation of thousand offlights, consumer class action suits have been filed against AmericanAirlines. Thus, if the fine is allowed tostand, the strike will have broken the pilots union at American Airlines,and the carrier's top management can toast one another on their greatvictory. 7:99-CV- 25-X, 1 February 1999.James, E. No employee group at American Airlines and no laborassociation representing employees at American Airlines is going to haveany trust in the top management at American Airlines ever again. 7:99-CV- 25-X, 13 February 1999.American Airlines, Inc., Plaintiff, vs. A temporary restraining order was issued by the UnitedStates District Court for the Northern district of Texas, Wichita FallsDivision on 1 February 1999.[ii] The temporary restraining order directedthe Allied Pilots Association to direct its members to return to work atAmerican Airlines. Over the longer-term,however, the probability is that American Airlines will be the big loser inthis strike. As stated above, AmericanAirlines senior management may believe that the corporation has establisheda precedent that will serve the company well in future negotiations. Subsequent to theacquisition of Reno Air by American Airlines, American Airlines continuedto pay Reno Air pilots at the lower salary levels; thereby creating a two-tiered salary structure for pilots in the post-merger American Airlines.Pilots at American Airlines were paid at salary levels that wereapproximately double the salary levels paid at Reno Air. Allied PilotsAssociation, et al., Defendants, Order of Contempt, United States DistrictCourt for the Northern District of Texas, Wichita Falls Division, Case No.7:99-CV- 25-X, 13 February 1999; American Airlines, Inc., Plaintiff, vs.Allied Pilots Association, et al., Defendants, Findings of Fact andConclusions of Law, United States District Court for the Northern Districtof Texas, Wichita Falls Division, Case No. First, are the lost revenues during the strikeperiod approximating $87.6 million. United States District Court for the Northern District of Texas, Wichita Falls Division, Case No. The Allied Pilots Association contends, however, that the pilotsunion is a $1.2 billion per year target for American Airlines. Temporary Restraining Order. American Airlines simply cannot run anoperations of its size on non-union labor. The Pilots Strike Against American Airlines-February 1999 Introduction This research examines the Allied Pilots Association strike againstAmerican Airlines in February 1999. Southwest Airlines hasdemonstrated that success is possible against potentially overwhelmingodds. The pilots atAmerican Airlines were well aware of the penchant of top management atAmerican Airlines to shift flights from American Airlines to lower costcommuter airlines in an effort to earn ever more bloated profits for thecarrier. Order of Contempt. The pilots at AmericanAirlines, however, can get jobs at other airlines. American Airlines, while not directly challenging this claim,asserted that the corporation had the right under the contract to graduallyassimilate the former Reno air pilots into the salary structure providedfor under the contract between American Airlines and the Allied PilotsAssociation, and that during this period of assimilation, the Allied PilotsAssociation had not right under the contract to strike. United States District Court for the Northern District of Texas, Wichita Falls Division, Case No. 7:99-CV- 25-X,13 February 1999. [vi]American Airlines, Inc., Plaintiff, vs. 7:99-CV- 25-X, 13 February 1999. By paying former Reno Air pilots salaries that approximated one-halfthe level of salaries paid to American Airlines pilots and then resortingto the federal courts to enforce this static, American Airlines tradedshort-term gains in the form of lower salaries for a temporary period toapproximately 3 former Reno Air pilots for substantial short-term andlong-term disadvantages. By contrast, the top management at American Airlines appears to beshunning the stellar role model of the top management at SouthwestAirlines, a carrier that not only consistently tops all airlines incustomer satisfaction, but also is considered by all employee classes tohave an exceptionally enlightened top management. The topical foci of these discussions are (1) the issuesprecipitating the strike, together with the positions of the parties on theissues, (2) the settlement of the strike, and (3) an assessment of thestrike outcome. Accordingto the Allied Pilots Association, the underlying motive of AmericanAirlines in this action is to use the former Reno Air pilots as leverage toreduce the salary levels of American Airlines pilots when the contractbetween American Airlines and the Allied Pilots Association is renegotiatedupon expiration of the current contract.[v] Within the context of thisassertion by the Allied Pilots Association, the approximately $33 millionin lost salaries by the pilots plus the minimum $1 million fine leviedagainst the Allied Pilots Association for contempt of the federal courtorder for the pilots to return to work[vi] may be considered by the pilotsas an investment in their future, as a means of foiling the intentions ofthe top management of American Airlines. Technically, the labor action by theAllied Pilots Association was not a formally called strike, as the servicesof pilots were denied to American Airlines by individual pilots in thehundreds calling in as sick and unable to work. Reno Air, therefore, represented animportant challenge to the pilots at American Airlines. Management at American Airlines appears to havebecome too far removed from the business of the company. Allied Pilots Association, et al., Defendants. Fort Worth, Texas: Allied Pilots Association, 15 March 1999.American Airlines, Inc., Plaintiff, vs. When the new contract between American Airlinesand the Allied Pilots Association is negotiated, the federal court in northTexas will not be able to play on the side of the corporation, as occurredin the February 1999 strike. Rather, negotiate to American Airlines meant our way or no wayin the spirit of Secretary of State Albright's negotiation stance towardYugoslavia. Southwest has created these niches by offering lowprices, inexpensive operations, outstanding customer service and treatingits employees in an altogether different way than that which occurs atAmerican Airlines.[ix] Conclusion The United States circuit judge levied a final fine against the PilotsAssociation in the amount of $45 million. Issues Precipitating the Strike, Together with the Positions of the Parties on the Issues One of the most important issues precipitating the strikes by theAllied Pilots Association against American Airlines involved the salaryschedules for pilots flying for Reno Air. Don Carty, Chairman ofAMR, the parent corporation of American Airlines, stated, however, that hewould consider seeking federal court action to force the pilots back towork even as negotiations are in progress. Letter to the APA Board of Directors, 26 March 1999."Southwest Airlines' Herb Kelleher: Unorthodoxy at Work." Management Review 84 (January 1995): 9-12.----------------------- [i]American Airlines, Inc., Plaintiff, vs. Allied Pilots Association,et al., Defendants, Temporary Restraining Order, United States DistrictCourt for the Northern District of Texas, Wichita Falls Division, Case No.7:99-CV- 25-X, 1 February 1999. Special Report to the Membership. The Allied Pilots Association contended that American Airlines wasviolating the labor agreement between American Airlines and the AlliedPilots Association by using lower-paid pilots to fly former Reno Airroutes. 7:99-CV- 25-X, 13 February 1999.American Airlines, Inc., Plaintiff, vs. The top management at American Airlines appears to be using the topmanagement at Continental Airlines as a role model. Legally, however, thefederal court system treated the actions of the pilots against AmericanAirlines as a strike.[i] Presentation of the Findings The findings of this examination are presented in three majordiscussions. Endnotes BibliographyAllied Pilots Association, "Instruction to Comply with Judge Joe Kendall's February 1 , 1999 Order," (11 February 1999): 1-2. Good, strong, and trustful human resources skills, as opposed tolawyers and numbers crunchers, are a more important requirement for runningan airline. Why the top management at American Airlines would want toemulate any other characteristic of Continental Airlines, however, isdifficult to fathom. If this group ofpilots were to be allowed to be brought into the American Airlines systemat substantially lower salary levels than those paid to American Airlinespilots, the position of the pilots at American Airlines would be injeopardy. If American Airlines is able to deferfor a period of one year the integration of former Reno air pilots at thefull salary scale of American Airlines pilots, the corporation will havesaved $18 million. Such a trade-off appears to be quite short-sighted onthe part of top management at American Airlines. This ruse did not fly, either with AmericanAirlines or the United States federal court. Allied Pilots Association, et al., Defendants. The Allied Pilots Association also contends that, through subduing thepilots through the Reno Air tactic on salaries, the corporation not onlybelieve that it will be able to secure salary concessions from the pilotsbut will be able to use such concessions as a tool to wring concessionsfrom the unions representing the other employee classes at AmericanAirlines.[vii] If American Airlines were successful in such a strategy,the net short-term costs to the corporation of the strike by the pilotsmight be justified. 7:99-CV- 25-X, 13 February 1999. As stated above, however, an important outcome of thisstrike likely will be a lasting enmity from its pilots that likely willtranslate into much more difficult negotiations when the current contractwith the Allied Pilots Association expires. Allied Pilots Association,et al., Defendants, Findings of Fact and Conclusions of Law, United StatesDistrict Court for the Northern District of Texas, Wichita Falls Division,Case No. This amount is greater than thetotal assets of the Pilots Association. Thus, the estimate is thatthe strike cost American Airlines approximately $87.6 million in revenuesover the 1 days of the strike. http://www.alliedpilots.org/pub/info/tro. [vii]Allied Pilots Association, 5. The secret of Southwest's initial and continuing success was thecreation of market niches that were not being filled by any of theairline's competitors. One might believe that the pilots will never recoup these lostsalaries. United States District Court for the Northern District of Texas, Wichita Falls Division, Case No. [viii]Edgar James, General Counsel, Allied Pilots Association, Letterto the APA Board of Directors, 26 March 1999. [iii]American Airlines, Inc., Plaintiff, vs. Labornegotiations at the carrier in the future likely will be highly adversarialwith no give on either side. Allied Pilots Association,et al., Defendants, Order of Contempt, United States District Court for theNorthern District of Texas, Wichita Falls Division, Case No. American Airlines senior management maybelieve that the corporation has established a precedent that will servethe company well in future acquisitions. As a consequence, the vice President of Flight at thecorporation notified individual pilots that attendance records for theperiod of the strike were subject to subpoena by attorneys representingconsumers. The pilots who went on strike against American Airlines lostcollectively approximately $33 million over the 1 -day period of thestrike. 1999 21 .htmlAllied Pilots Association. The federal judge in thenorth Texas circuit is a management-friendly judge, and American Airlineswas able to obtain from the judge the rulings it desired in its efforts toundercut the power of the Pilots Association. When the Allied Pilots Association did not order thepilots to return to work as required by the restraining order, the courtissued a contempt order and a statement of findings of fact and conclusionsof law all on 13 February 1999.[iii] In response to the contempt order,which among other things fined the Allied Pilots Association a minimum of$1 million, the Allied Pilots Association issued an order to all pilotmembers of the association to comply with the temporary restraining orderissued by the court on 1 February 1999.[iv] While all of the pilots didnot return immediately to work at American Airlines, all pilots did returnto work in less than five days from the day the contempt citation wasissued. The business ofthe company is not mergers and acquisitions; the business of the company isnot union busting; the business of the company is transporting people andcargo. AsReno Air flies almost exclusively in the Western states, the carrier is nota minor presence in Western markets. [iv]Allied Pilots Association, "Instruction to Comply with Judge JoeKendall's February 1 , 1999 Order," (11 February 1999): 1.http://www.alliedpilots.org/pub/info/tro.1999 21 . In turn, attorneys for the Allied Pilots Association accusedAmerican Airlines of attempting to induce anxiety into the membership ofthe Association by misrepresenting any liability on the part of theindividual members of the Association.[viii] The consumer class actionsuits may, eventually, add to the costs incurred by American Airlines as aconsequence of the strike by the Allied Pilots Association. In all likelihood, however, thecorporation has assured that future contract with the Allied PilotsAssociation will preclude such a tactic on the part of the corporation.Further, all other organized employee groups at American Airlines will bemuch more hostile toward the carrier's management in the future. General Counsel, Allied Pilots Association. Further, whatevercontracts do emerge between American Airlines and the associationsrepresenting the carrier's employees in the future likely will bestructured in a way that severely limits the operational flexibility ofmanagement at the carrier. Findings of Fact and Conclusions of Law. Further, it appears to be quiteunlikely that American Airlines, in any event, would be able to parlay cut-rate salaries for 3 former Reno air pilots into concessions from 9,2 American Airlines pilots. Reno Air pilots were paid salaries that were substantially lower thanthe salaries paid to pilots at American Airlines. American Airlines top management, however, appearsdetermined to rub the collective nose of its pilots in the dirt to show whois boss. Allied Pilots Association, et al., Defendants. Thus, American Airlines was required to cancel flights on1 consecutive days. Reno Air was acquired byAmerican Airlines in late-1998 Reno Air is small carrier by AmericanAirlines standards; however, Reno Air was the 15th largest air carrier inthe United States at the time of its acquisition by American Airlines. American Airlines appears to believe that it has not reason toseek good relations with the carrier's employees. The non-union characteristic ofContinental Airlines undoubtedly appeals to the top management at AmericanAirlines. Today, ContinentalAirlines operates as a non-union carrier. Revenues, however, are different from netearnings. html [v]Allied Pilots Association, Special Report to the Membership (FortWorth, Texas: Allied Pilots Association, 15 March 1999): 4-5. Inall likelihood, however, the corporation has assured that future contractwith the Allied Pilots Association will preclude such a tactic on the partof the corporation and will preclude the ability of the corporation to useconcessions from the Allied Pilots Association to gain similar concessionsfrom the unions representing other classes of employees at AmericanAirlines. The strike by the Allied Pilots Association against American Airlineswas halted on 16 February 1999 through action on the part of the federalcourt system. The estimate is that American Airlines lost $1.2million in revenues for each 1 flights that were cancelled. In one form or another, however, a pilots union will resurface atAmerican Airlines should the $45 million fine be upheld on appeal andAmerican Airlines will be required to deal with employee associations inthe future. As the carrier was not required to pay its pilots or its flightcrews during the period of the labor dispute, and as the carrier was notrequired to pay for fuel that would have been consumed on the canceledflight, the carriers actual losses were less than the total revenue deficitthat developed as a results of the canceled flight. If this paper is not what you are looking for, you can search again: Search for: or Click here to request an essay written just for you.