"We Want A Piece Of The Action": Unprecedented Airline Profits Create Expectations In All Stakeholders

Shareholders have been the main beneficiaries of the outstanding profits of the past two years. Pilots and other staff have also participated in the upside. How that occurs varies from airline to airline; some deliver bonuses, others prefer salary increases. But whatever the delivery mode, there is a rising tide of belief that a new phase has been reached, and that the privations of the past decade of bankruptcies and wage declines now need to be redressed. This can create issues for management, well aware of how capricious the external environment can be. Raising benchmark salaries in good times has arguably led to vicious downward cycles in past decades. But management through these times has frequently been lacking in long term direction. Today’s unions are increasingly well educated in the need for cooperative action. Can the current tide be effectively navigated, while satisfying increasingly voracious investors/analysts?

• Some US pilot contracts have been rejected in the past two years due to unhappiness with profit sharing and work rules, rather than pay rates. It is hard to discern patterns in voting on different issues. Where are we headed in the coming cycle of negotiations?
• Metamorphosis of Pilot relations: Is it, simply the passage of time, or is it company size – as you get bigger people lose personal contact? How much is the result of internal union ambitions?
• Is there a “fair” distribution of benefits between employees and shareholders?