Airline Labor Relations
Information on Trends and Impact of Labor Actions
Gao ID: GAO-03-652 June 13, 2003
Labor negotiations in the airline industry fall under the Railway Labor Act. Under this act, airline labor contracts do not expire, but instead, become amendable. To help labor and management reach agreement before a strike occurs, the act also provides a process--including possible intervention by the President--that is designed to reduce the incidence of strikes. Despite these provisions, negotiations between airlines and their unions have sometimes been contentious, and strikes have occurred. Because air transportation is such a vital link in the nation's economic infrastructure, a strike at a major U.S. airline may exert a significant economic impact on affected communities. Additionally, if an airline's labor and management were to engage in contentious and prolonged negotiations, the airline's operations--and customer service--could suffer. GAO was asked to examine trends in airline labor negotiations in the 25 years since the industry was deregulated in 1978, the impact of airline strikes on communities, and the impact of lengthy contract negotiations and nonstrike work actions (such as "sickouts") on passengers.
Since the airline industry was deregulated in 1978, the average length of negotiations has increased, strikes have declined, and nonstrike work actions (e.g., sickouts) have increased. After 1990, the median length of time needed for labor and management at U.S. major airlines to reach agreement on contracts increased from 9 to 15 months. Of the 16 strikes that occurred at those airlines since 1978, 12 occurred prior to 1990, and 4 occurred subsequently. All ten court-recognized, nonstrike work actions and all six presidential interventions occurred since 1993. Airline strikes have had obvious negative impacts on communities, including lost income for striking and laid off workers, disrupted travel plans, and decreased spending by travelers and the struck airline. However, such impacts have yet to be thoroughly and systematically analyzed. The potential net impacts of a strike on a community would depend on a number of factors, such as availability of service from competing (nonstriking) airlines and the length of the strike. For example, of two recent strikes, one lasted 15 days and one lasted 24 minutes. GAO's analysis indicates that passenger service has been affected more adversely by nonstrike work actions than by an increase in the length of negotiations. Generally, but not always, as negotiation periods increased, there has been a slight decline in on-time flights. However, the impact of these negotiations has been unclear because the decline may also have been affected by other factors such as poor weather. By comparison, the 10 court-recognized, nonstrike work actions more clearly resulted in negative impacts on passengers, as shown through such measures as a decrease in the number of on-time flights, an increase in the number of flight problem complaints, and a decrease in passenger traffic.
GAO-03-652, Airline Labor Relations: Information on Trends and Impact of Labor Actions
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Chairman, Committee on Commerce, Science, and Transportation, U.S.
Senate:
United States General Accounting Office:
GAO:
June 2003:
Airline Labor Relations:
Information on Trends and Impact of Labor Actions:
GAO-03-652:
GAO Highlights:
Highlights of GAO-03-652, a report to the Chairman, Committee on
Commerce, Science, and Transportation, U.S. Senate
Why GAO Did This Study:
Labor negotiations in the airline industry fall under the Railway
Labor Act. Under this act, airline labor contracts do not expire, but
instead, become amendable. To help labor and management reach
agreement before a strike occurs, the act also provides a process”
including possible intervention by the President”that is designed to
reduce the incidence of strikes. Despite these provisions,
negotiations between airlines and their unions have sometimes been
contentious, and strikes have occurred.
Because air transportation is such a vital link in the nation‘s
economic infrastructure, a strike at a major U.S. airline may exert a
significant economic impact on affected communities. Additionally, if
an airline‘s labor and management were to engage in contentious and
prolonged negotiations, the airline‘s operations”and customer service”
could suffer.
GAO was asked to examine trends in airline labor negotiations in the
25 years since the industry was deregulated in 1978, the impact of
airline strikes on communities, and the impact of lengthy contract
negotiations and nonstrike work actions (such as ’sickouts“) on
passengers.
What GAO Found:
Since the airline industry was deregulated in 1978, the average length
of negotiations has increased, strikes have declined, and nonstrike
work actions (e.g., sickouts) have increased. After 1990, the median
length of time needed for labor and management at U.S. major airlines
to reach agreement on contracts increased from 9 to 15 months. Of the
16 strikes that occurred at those airlines since 1978, 12 occurred
prior to 1990, and 4 occurred subsequently. All ten court-recognized,
nonstrike work actions and all six presidential interventions occurred
since 1993.
Summary of Negotiation Trends Since Deregulation
[See PDF for image]
[End of figure]
Airline strikes have had obvious negative impacts on communities,
including lost income for striking and laid off workers, disrupted
travel plans, and decreased spending by travelers and the struck
airline. However, such impacts have yet to be thoroughly and
systematically analyzed. The potential net impacts of a strike on a
community would depend on a number of factors, such as availability of
service from competing (nonstriking) airlines and the length of the
strike. For example, of two recent strikes, one lasted 15 days and one
lasted 24 minutes.
GAO‘s analysis indicates that passenger service has been affected more
adversely by nonstrike work actions than by an increase in the length
of negotiations. Generally, but not always, as negotiation periods
increased, there has been a slight decline in on-time flights.
However, the impact of these negotiations has been unclear because the
decline may also have been affected by other factors such as poor
weather. By comparison, the 10 court-recognized, nonstrike work
actions more clearly resulted in negative impacts on passengers, as
shown through such measures as a decrease in the number of on-time
flights, an increase in the number of flight problem complaints, and a
decrease in passenger traffic.
www.gao.gov/cgi-bin/getrpt?GAO-03-652.
To view the full product, including the scope and methodology, click
on the link above. For more information, contact JayEtta Z. Hecker at
(202) 512-2834 or HeckerJ@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Length of Negotiations and Number of Nonstrike Work Actions Have
Increased, While Number of Strikes Has Declined:
Airline Strikes Adversely Affect Communities, but Impacts Have Not Been
Fully Analyzed and Vary from Place to Place:
Nonstrike Work Actions Have Greater Impacts on Passengers than Lengthy
Negotiations:
Agency Comments:
Appendix I: Additional Questions:
Appendix II: Objectives, Scope, and Methodology:
Appendix III: Additional Background Information on the Railway Labor
Act:
Key Provisions of the RLA:
Collective Bargaining Process under the RLA:
Appendix IV: Contracts Negotiated and Ratified or Settled by the
Amendable Date:
Appendix V: Airline Strikes That Have Occurred Since Deregulation:
Appendix VI: Court-recognized, Nonstrike Work Actions Since
Deregulation:
Appendix VII: Number of Presidential Interventions Since Deregulation:
Appendix VIII: Comments from the National Mediation Board:
Appendix IX: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
Staff Acknowledgments:
Tables:
Table 1: Unions Representing Selected Crafts or Classes at Major
Passenger Airlines as of February 1, 2003:
Table 2: States That Include Binding Arbitration or Last, Best Offer
Arbitration as a Dispute Resolution Option:
Table 3: Congressional Interventions in Railroad Negotiations:
Figures:
Figure 1: Summary of Negotiation Trends Since Deregulation:
Figure 2: Collective Bargaining Process under the Railway Labor Act:
Figure 3: Length of Time Taken to Negotiate Contracts, 1978 to 2002:
Figure 4: Median Negotiation Lengths by Carrier:
Figure 5: Frequency of Strikes, Presidential Interventions, and Court-
recognized, Nonstrike Work Actions by Year:
Figure 6: 2001 Market Shares for Major Airlines at Their Hubs:
Figure 7: Spoke Communities Served from Cincinnati and Minneapolis-St.
Paul Retain Service from Competing Airlines:
Figure 8: On-Time Flight Statistics for American and Delta at Dallas/
Fort Worth International Airport, August 1998 to December 1999:
Figure 9: Flight Problem Complaints for American and Delta from August
1998 to December 1999:
Figure 10: Passengers Carried on American and Delta at Dallas/Fort
Worth International Airport, February 1998 and 1999:
Figure 11: On-Time Flight Statistics for Delta and Continental at
Atlanta Hartsfield International Airport, August 2000 to August 2001:
Figure 12: Flight Problem Complaints for Delta and Continental, August
2000 to August 2001:
Figure 13: Change in Passenger Traffic on Delta and Continental at
Atlanta Hartsfield International Airport in December 1999 and 1 Year
Later during the Nonstrike Work Action in December 2000:
Abbreviations:
AFA: Association of Flight Attendants:
AIRCon: Airline Industrial Relations Conference:
ALPA: Air Line Pilots Association:
AMFA: Aircraft Mechanics Fraternal Association:
APA: Allied Pilots Association:
ATA: Air Transport Association:
CAPA: Coalition of Airline Pilots Associations:
CESTA: Communities for Economic Strength Through Aviation:
CWA: Communications Workers of America:
DOT: Department of Transportation:
IAM: International Association of Machinists and Aerospace Workers:
IBT: International Brotherhood of Teamsters:
NMB: National Mediation Board:
PAFCA: Professional Airline Flight Control Association:
PEB: Presidential Emergency Board:
RLA: Railway Labor Act:
SAEA: Southwest Airlines Employee Association:
SWAPA: Southwest Airlines Pilots Association:
TWA: Trans World Airlines:
TWU: Transport Workers Unions:
UFA: Union of Flight Attendants:
United States General Accounting Office:
Washington, DC 20548:
June 13, 2003:
The Honorable John McCain
Chairman,
Committee on Commerce, Science, and Transportation
United States Senate:
Dear Senator McCain:
Observers of the interactions between airline management and labor have
long characterized these labor relations as contentious and
adversarial. Negotiations between unions and airlines, for example,
have taken up to 4 years to complete. Unions and airlines have each
prolonged negotiations for their financial benefit. The importance of
labor relations has recently been magnified by the financial crisis
facing many airlines. Since September 11, 2001, US Airways, United
Airlines, and Hawaiian Airlines have entered Chapter 11 bankruptcy, and
American Airlines is fighting to avoid bankruptcy. US Airways, United,
and American have all had to obtain the consent of their unions for
contract concessions to substantially cut labor costs. At stake,
according to industry observers and financial officials, has been the
continued existence of at least two airlines.
The process under which labor negotiations in the airline industry take
place is substantially different than the process of most other
industries. Airline labor contracts do not expire, and their
negotiations can include a series of steps--including mediation,
arbitration, and presidential interventions--specifically designed to
avoid an impasse that would interrupt the flow of essential commerce.
Since 1936, airline labor negotiations have been conducted in
accordance with the requirements of the Railway Labor Act, which
contains an established framework to reduce the incidence of strikes.
Although the act is designed to bring about settlements without unions
resorting to a strike, negotiations between the airlines and their
unions have sometimes been contentious, and strikes have occurred.
Recently, negotiations have at times been marked by nonstrike work
actions, such as sickouts and work slowdowns. These actions are
designed to place economic pressure on an airline.
Because of ongoing concerns about the scope and impact of airline labor
negotiations, you asked us to examine a number of issues concerning
airline negotiations, strikes, and nonstrike work actions. As agreed
with your staff, we examined the following three questions:
* What have been the major trends of labor negotiations in the airline
industry since the industry was deregulated in 1978, including the
number and length of negotiations and the number of strikes,
presidential interventions to avoid or end strikes, and nonstrike work
actions?
* What has been the impact of airline strikes on communities?
* What have been the impacts of the length of negotiations and the
occurrence of nonstrike work actions on passengers?
In addition to these questions, you also requested information on
states using binding and last offer arbitration[Footnote 1] for
essential employees and the number of times Congress has intervened in
railroad labor negotiations in the last 25 years. See appendix I for
data on states using binding arbitration and congressional
interventions in railroad negotiations.
To determine the trends of labor negotiations, we analyzed data on
negotiations, strikes, and nonstrike work actions from airlines, labor
unions, the National Mediation Board (NMB), industry groups, and
academic experts. We also interviewed officials with major U.S.
airlines, labor unions, the NMB, industry groups, and academic experts.
To determine the impact of strikes on communities, we reviewed
available published studies from academics and other experts, and we
analyzed data on airline schedules. To determine the impact of
nonstrike work actions, we defined such actions as those in which
airlines obtained either temporary restraining orders or injunctions
against unions to prevent various actions. We then analyzed data from
the U.S. Department of Transportation (DOT) on airline operational
performance and passenger service. Except where noted, all data
collected were current as of December 2002. Because of various data
limitations, our analyses are restricted to major U.S. passenger
airlines.[Footnote 2] We did not evaluate the efficacy or effectiveness
of the Railway Labor Act or the impact of any possible changes to the
act. Appendix II contains a more complete description of our scope and
methodology.
Results in Brief:
Since the airline industry was deregulated in 1978, labor negotiations
have taken increasing amounts of time and have been marked less by
strikes and more by nonstrike work actions. For the contracts we
reviewed that had been negotiated between major carriers and labor
unions since deregulation, the overall median length for contracts
negotiated between 1978 and 1989 was 9 months, while the median
negotiation time from 1990 to 2002 increased to 15 months. (See fig.
1.) However, some carriers such as Continental Airlines, Southwest
Airlines, Alaska Airlines, and United Airlines have been more
successful than others at reaching agreement with their labor unions in
much less time. Of the 16 strikes that occurred, 12 took place from
1978 to 1989, and 4 took place since 1990. Various presidential
interventions that have prevented or halted 6 strikes have all occurred
since 1990, and all 10 court-recognized, nonstrike work actions have
also taken place since 1990. Although the complete number of nonstrike
work actions is not known because they are difficult to document, our
evidence suggests that their use has increased in the past 12 years.
Figure 1: Summary of Negotiation Trends Since Deregulation:
[See PDF for image]
[End of figure]
While strikes cause obvious negative impacts on affected communities,
we could identify no published studies that comprehensively analyzed
the full impacts of a past strike. Negative impacts of strikes include
the lost income of striking and laid off workers, disrupted travel
plans due to cancelled flights, decreased spending by the struck
airline, and less spending by travelers. However, the overall economic
impact of any past strike, including direct and indirect effects (and
the offsetting effect of various mitigating factors such as the
presence of service from competing airlines) has not been quantified.
Our analysis of past strikes and other information indicates, however,
that a strike's potential impacts could vary greatly from community to
community. For example, a community with substantial amounts of service
provided by competing airlines is less likely to be affected than a
community that is heavily or entirely dependent on the service provided
by the striking airline, because passengers have continued access to
air service. As a result, a thorough assessment of a strike's impact on
one community would be difficult to generalize to other locations.
Our analysis indicates that passenger service has been affected more
adversely by nonstrike work actions than by an increase in the length
of negotiations. Generally, but not always, as negotiation periods
increased, there has been a decline in on-time flights.[Footnote 3]
However, the impact of these negotiations has been unclear, because the
decline may also have been affected by other factors such as poor
weather, aircraft maintenance, runway closures, air traffic control
system decisions, or equipment failures. By comparison, the 10 court-
recognized, nonstrike work actions more clearly resulted in negative
impacts on passengers, as shown through such measures as a decrease in
the number of on-time flights, an increase in the number of flight
problem complaints, and a decrease in passenger traffic. For example,
during an American pilot slowdown in 1999, the percentage of flights
that arrived or departed on time declined by 11.6 percentage points.
Also, customer flight complaints with DOT about American nearly
quadrupled during the period of the nonstrike work action, rising from
53 to 203 complaints, while passenger traffic fell by 15 percent as
compared to the year before.
Background:
All the major airlines have some union representation of at least part
of their labor force. The various crafts or classes[Footnote 4] that
unions typically represent include pilots, flight attendants,
mechanics, and dispatchers. Sometimes unions also represent customer
service agents and clerical workers, aircraft and baggage handling
personnel, and flight instructors. The extent of unionization among the
major carriers varies significantly. At Delta, unions represent the
pilots and two small employee groups; at Southwest, on the other hand,
unions represent 10 different employee groups. Different unions may
represent a given employee craft or class at different airlines. For
example, the Air Line Pilots Association (ALPA) represents pilots at
United, but the Allied Pilots Association represents American pilots.
Table 1 summarizes the representation of different crafts or classes at
the major airlines.
Table 1: Unions Representing Selected Crafts or Classes at Major
Passenger Airlines as of February 1, 2003:
Airline: Alaska; Pilots: ALPA; Flight attendants: AFA; Mechanics
and related: AMFA; Dispatchers: TWU; Fleet service/ramp: IAM.
Airline: America West; Pilots: ALPA; Flight attendants: AFA;
Mechanics and related: IBT; Dispatchers: TWU; Fleet service/ramp: TWU.
Airline: American; Pilots: APA; Flight attendants: APFA; Mechanics
and related: TWU; Dispatchers: TWU; Fleet service/ramp: TWU.
Airline: Continental; Pilots: ALPA; Flight attendants: IAM;
Mechanics and related: IBT; Dispatchers: TWU; Fleet service/ramp:
(none).
Airline: Delta; Pilots: ALPA; Flight attendants: (none); Mechanics
and related: (none); Dispatchers: PAFCA; Fleet service/ramp: (none).
Airline: Northwest; Pilots: ALPA; Flight attendants: IBT; Mechanics
and related: AMFA; Dispatchers: TWU; Fleet service/ramp: IAM.
Airline: Southwest; Pilots: SWAPA; Flight attendants: TWU;
Mechanics and related: AMFA; Dispatchers: SAEA; Fleet service/ramp:
TWU.
Airline: United; Pilots: ALPA; Flight attendants: AFA; Mechanics
and related: IAM; Dispatchers: PAFCA; Fleet service/ramp: IAM.
Airline: US Airways; Pilots: ALPA; Flight attendants: AFA;
Mechanics and related: IAM; Dispatchers: TWU; Fleet service/ramp: IAM.
Legend:
AFA = Association of Flight Attendants:
ALPA = Air Line Pilots Association:
AMFA = Aircraft Mechanics Fraternal Association:
APA = Allied Pilots Association:
APFA = Association of Professional Flight Attendants:
IAM = International Association of Machinists and Aerospace Workers:
IBT = International Brotherhood of Teamsters:
PAFCA = Professional Airline Flight Control Association:
SAEA = Southwest Airlines Employee Association:
SWAPA = Southwest Airlines Pilot Association:
TWU = Transport Workers Unions:
Source: International Association of Machinists and Aerospace Workers.
Note: American completed its purchase of Trans World Airlines (TWA) in
April 2001, and this table lists union representation as of February 1,
2003; hence TWA is not included in this table.
[End of table]
In general, airline labor contracts include three major elements:
wages, benefits, and work rules. Work rules generally refer to those
sections of a contract that define issues such as hours to be worked
and what work is to be done by what employees.
Negotiations between airlines and their labor unions on these contracts
are conducted in accordance with the requirements of the Railway Labor
Act (RLA). This act was passed in 1926 after the railroads and their
unions agreed to set in place a legal framework that would avoid
disruptions in rail service. The act was amended in 1936, after
discussions with airline labor and management, to include the airline
industry and its labor unions. See appendix III for a summary of the
history and key provisions of the RLA.
Airline labor contracts do not expire; rather, they reach an amendable
date--the first day that the parties can be required to negotiate the
terms of a new contract. Labor negotiations may begin before or after
the amendable date, however. While a new contract is being negotiated,
the terms of the existing contract remain in effect.
Under the RLA, labor negotiations undergo a specific process that must
be followed before a union can engage in any kind of work action,
including a strike, or before a carrier can change work rules, wages,
and benefits.[Footnote 5] After exchanging proposed changes to contract
provisions, the airline and the union engage in direct bargaining. If
they cannot come to an agreement, the parties must request mediation
assistance from the NMB. By statute, if the NMB receives a properly
completed application for mediation, it must make its best effort to
mediate an amicable settlement. If negotiations are deadlocked after
mediation, the NMB must then offer arbitration to both parties. If
either party declines arbitration, the NMB releases the parties into a
30-day cooling-off period. While this process is set by law, the
decision about when the negotiations are deadlocked is left to the NMB.
If the NMB concludes that a labor dispute threatens to interrupt
essential transportation service to any part of the country, the act
directs the NMB to notify the President of this possibility. The
President then can, at his discretion, convene a Presidential Emergency
Board (PEB), which issues a nonbinding, fact-finding report.[Footnote
6] If the President does not call a PEB, after the 30-day cooling-off
period ends the union is allowed to strike, and the airline is allowed
to alter working conditions unilaterally. These actions are known as
self-help. If the President does convene a PEB, it is given 30 days to
hold hearings and recommend contract terms for a settlement to the
parties. The union and the airline then have an additional 30-day
cooling-off period, after the PEB makes its recommendations to the
President, before either can engage in self-help. After a PEB, Congress
may also intervene in the contract dispute by legislating terms of a
contract between a carrier and a union. Congress, however, has never
intervened in airline negotiations since deregulation. Figure 2
summarizes the key steps in the negotiation process under the RLA.
Figure 2: Collective Bargaining Process under the Railway Labor Act:
[See PDF for image]
[End of figure]
Besides negotiations on contracts that are nearing or have passed the
amendable dates, airline management and labor may also engage in other
negotiations. For example, if an airline introduces a new type of
aircraft into its fleet, management and labor will negotiate "side
agreements" to the contract that set pay rates and work rules governing
the operation of that aircraft. An example of this situation was when
Delta and its pilots settled on pay rates for flying Delta's newly
introduced Boeing 777s in 1999. This agreement was an amendment to a
contract that was ratified in 1996. Conversely, during financially
difficult times, an airline's management and labor may negotiate
concessionary agreements before contracts reach the amendable date. For
example, since 2001, several airlines have requested pay cuts from
their unions due to the precarious financial condition of the airlines.
In April 2003, American employees agreed to $1.8 billion in wage,
benefit, and work rules concessions to help the airline avoid
bankruptcy. In April, United employees represented by ALPA, Association
of Flight Attendants (AFA), the International Association of Machinists
and Aerospace Workers (IAM), the Transport Workers Union (TWU), and the
Professional Airline Flight Control Association (PAFCA) agreed to $2.2
billion in average yearly savings to avoid liquidation or having all
labor contracts abrogated by the bankruptcy court. Through January
2003, US Airways employees, including unionized, nonunionized, and
management personnel, agreed to over $1 billion in cuts to avoid
liquidation.
Length of Negotiations and Number of Nonstrike Work Actions Have
Increased, While Number of Strikes Has Declined:
In the 25 years since deregulation, airline contract negotiation
lengths have increased while the frequency of strikes has declined, but
the number of nonstrike work actions have increased. For the 236
contracts that the major passenger airlines negotiated since 1978,
available data suggest that the median time taken to negotiate
contracts has risen substantially since 1990, although this varies
among the different carriers. In addition, 75 percent of strikes
occurred prior to 1990. By comparison, all presidential interventions
and all identified nonstrike work actions (such as sickouts or refusals
to work overtime) occurred after 1990.
Airline Contract Negotiation Lengths Have Increased Since 1978:
The length of time to negotiate airline contracts has increased since
deregulation. From 1978 to 1989, the median contract negotiation was 9
months while the median negotiation length from 1990 to 2002 increased
to 15 months.[Footnote 7] In other words, from 1978 to 1989, half of
the contracts were negotiated in more than 9 months while from 1990 to
2002, half of the contracts took more than 15 months to reach an
agreement. However, in 1978-1989, 6 contracts were ratified or settled
by the amendable date where as from 1990-2002, 9 contracts were
ratified or settled by the amendable date.[Footnote 8] (In all, during
the two time periods from 1978-1989 and 1990-2002, the number of
negotiations that began before the amendable date were 65 and 51,
respectively.) Conversely, the number of contracts that required more
than 24 months to negotiate more than doubled between the two periods.
Figure 3 summarizes changes in the length of time taken for airline
labor negotiations from 1978 to 2002.[Footnote 9]
Figure 3: Length of Time Taken to Negotiate Contracts, 1978 to 2002:
[See PDF for image]
[End of figure]
Carriers differed in the degree to which their median negotiation
lengths increased--if they increased at all. Negotiation lengths
increased at six carriers that were measured, in some cases more than
doubling. On the other hand, negotiation lengths decreased or remained
constant at three: Continental, United, and Trans World Airlines (TWA).
Figure 4 shows the change in median negotiation lengths at the major
U.S. passenger airlines before and after 1990.
Figure 4: Median Negotiation Lengths by Carrier:
[See PDF for image]
Note: America West Airlines was excluded from the measurement because
negotiations for this airline were not listed prior to 1990.
[A] Continental had only one contract pre-1990 that had both a known
negotiation start date and ratification/settlement date.
[End of figure]
Contract complexity may play a role in lengthening negotiations. In the
1980s, for example, scope clauses (provisions in labor contracts of the
major airlines and their unions that limit the number of routes that
can be transferred to smaller, regional jets) could be very short--
sometimes only one paragraph. Now, however, such scope clauses can be
60 or more pages. Also, contracts negotiated during the 1980s tended to
consist mainly of wages and benefits, while those negotiated in the
1990s included corporate governance issues such as code
sharing,[Footnote 10] regionals,[Footnote 11] and furloughs.
Another factor in the length of negotiations is the relationship
between labor and management. According to industry experts who
examined labor relations in the industry, the quality of labor
relationships is defined by the parties' level of trust, their level of
communication, and their ability to problem solve.[Footnote 12] Those
carriers that industry officials and labor-management experts[Footnote
13] regard as having positive labor relations tended to have shorter
negotiation periods than carriers with acrimonious relationships.
Industry officials noted increased tension within labor-management
relationships during the 1990s, when the industry recovered from
economic hardship to enjoy the biggest boom in its history. An industry
official explained that during the recessionary economic period of the
early 1990s, unions tended to stall negotiations to avoid making
concessions. Conversely, during the peak economic period in the mid to
late 1990s, some airlines' management tried to further improve their
profits by prolonging negotiations.
Carriers described by industry officials and labor-management experts
as having had positive labor relationships include Continental
(following 1993) and Southwest. In the 1990s, their median negotiation
periods were 7 and 13 months, respectively. Labor-management experts
credit Continental's current CEO for creating relationships of trust,
and re-establishing Continental as a profitable carrier after its
bankruptcy in the early 1990s. Industry officials also credit
Southwest's labor relationships to 30 years of profitability while
maintaining its original leadership. Both companies have been
recognized for extended periods of low conflict in labor negotiations,
underpinned by high-trust workplace cultures.[Footnote 14]
Carriers that have been described by labor-management experts as having
had contentious relations with their unions include American, Northwest
Airlines, TWA, and US Airways. Also, all have a history of strikes and/
or court-recognized, nonstrike work actions. Furthermore, in the 1990s,
many of these airlines had negotiations that tended to take much longer
than Continental's and Southwest's. For example, the median length of
time to negotiate contracts at US Airways in the 1990s was 34 months.
By contrast, the length of time to negotiate contracts at Southwest was
13 months.
Strikes Have Decreased and Nonstrike Work Actions Have Increased during
the 1990s:
The incidence of strikes in the airline industry has decreased over
time. Of the 16 strikes that occurred since 1978, 12 occurred prior to
1990, and 4 occurred subsequently.[Footnote 15] These strikes ranged
from as short as 24 minutes to more than 2 years. Figure 5 summarizes
the incidence of strikes, presidential interventions, and court-
recognized, nonstrike work actions[Footnote 16] between 1978 and 2002.
Figure 5: Frequency of Strikes, Presidential Interventions, and Court-
recognized, Nonstrike Work Actions by Year:
[See PDF for image]
Note: There was one presidential intervention and one court-recognized,
nonstrike work action in 2002.
[End of figure]
Six presidential interventions have been used to prevent strikes since
deregulation. All six occurred since 1990.[Footnote 17] Not all
presidential interventions were PEBs. In 1993, the President
recommended binding interest arbitration for American's flight
attendant negotiation. In 1998, and again in 2001, two PEB warnings
occurred; one occurred during Northwest's pilot strike and the second
for American flight attendants.[Footnote 18] Still, PEBs have been used
three times in the airline industry since 1978: during a 1994 American
pilot negotiation, a 1996 Northwest mechanic negotiation, and a 2000
United mechanic negotiation.
Compared to strikes, the pattern for nonstrike work actions has been
the opposite: their incidence has increased over time. In all, 10
court-recognized, nonstrike work actions have occurred, each since
1998. Such actions included various forms of slowdowns such as
sickouts, work-to-rule, and refusals to work overtime.[Footnote 19]
According to a labor-management expert, carriers believe there have
been many more nonstrike work actions than the 10 recognized by the
courts, but their existence is difficult to prove. Airline management
has been unable to produce the evidence needed to prove the actions are
taking place.[Footnote 20] Those nonstrike work actions that were not
identified by the court include a number of highly publicized labor
disruptions. For example, the reported, but unconfirmed, nonstrike work
action taken by United's pilots in the summer of 2000 was widely
publicized by the media,[Footnote 21] yet the airline never brought the
issue before a court of law. Additionally, it has been reported that
the reason why these actions are difficult to detect is because a
concern for safety often masks the source of such actions.
Airline Strikes Adversely Affect Communities, but Impacts Have Not Been
Fully Analyzed and Vary from Place to Place:
Airline labor strikes have exerted adverse impacts on communities, but
we identified no published studies that systematically and
comprehensively analyzed a strike's net impact at the community level.
For some strikes, we were able to identify evidence of individual
impacts, such as reduced air service to and from the community, lost
salaries or wages by striking or laid-off airline workers, or lower
airport revenues. However, no studies have yet synthesized such
information for a thorough picture of a strike's impact on a community.
Our analysis indicates that a strike's potential impacts would likely
vary greatly from community to community, because of differences in
factors such as the amount of service available from other airlines.
Thus, even if the impact of a strike were to be thoroughly studied at a
particular community, it would be difficult to generalize these results
to other locations.
Airline Strikes Have Had Negative Economic Impacts on Communities:
With the reduction of air service stemming from an airline strike,
communities have experienced economic disruptions from a number of
sources. Lost income of airline employees, fewer travelers and less
spending in travel related businesses, and less spending by the airline
are just some of the ways that local economies have been affected by a
strike. For example, canceled flights have lead to the layoff of
nonstriking employees, fewer travelers in the airport spending money in
concessions, and reduced landing fees for airports. Because passenger
traffic dropped, spending at hotels suffered.
Local reports illustrated some of a strike's economic impacts on a
community during the 2001 Comair pilot strike. Comair, a regional
carrier for Delta, has its main hub at the Cincinnati/Northern Kentucky
International Airport. Over the course of the strike, which lasted 89
days, Comair did not operate its 815 daily flights, causing the 25,000
passengers who would normally have been on those flights in an average
day to curtail their travel or make arrangements on other airlines. The
airline's 1,350 striking pilots, many of whom are based in the area,
lost an estimated $14 million in salaries, and the airline reported
laying off an additional 1,600 nonstriking employees in the greater
Cincinnati area as well. A concourse at the Cincinnati/Northern
Kentucky International Airport closed during the strike. Reports stated
that the concourse's 16 stores and restaurants lost more than $3
million in sales, and that 152 of 193 workers were laid off. The
airport also lost $1.2 million in landing fees from Comair during the
strike.
Impacts can be felt not only at hub communities like Cincinnati, but
also at smaller spoke communities that may be served only by the
striking airline. When Northwest Airlines pilots struck in 1998, for
example, Mesaba Airlines, a regional affiliate, suspended operations as
well. At least 12 of the communities served by Mesaba during the
Northwest strike had no other air service. One of these locations was
Houghton, Michigan. According to local reports, travelers to and from
Houghton had to drive as far as Green Bay (213 miles from Hancock,
Michigan, location of Houghton's airport) or Wausau, Wisconsin, (192
miles away) to find alternative flights. DOT also recognized the
possible impacts of halting all airline service. The department ordered
Mesaba to return service to 12 communities served from Minneapolis
under the terms of Mesaba's Essential Air Service contract. However,
before the order was implemented, the strike ended, and service was
restored to these communities.
Full Impacts at the Community Level Are Largely Unknown:
While the available information indicates that airline strikes can and
do have adverse impacts on communities, we identified no published
studies that attempt to comprehensively measure these impacts at the
community level. The kinds of impacts cited above, for example, may
have mitigating factors that need to be taken into account. In the
Comair strike, for example, union strike funds replaced some of the
lost income of strikers. ALPA approved payments of $1,400 per month to
striking Comair pilots during the strike period, allowing them to spend
at a reduced rate in the community. A study that reliably estimated the
impact of a strike at the community level would need to take factors
such as these into account. No such study has been done.
Another reason for uncertainty about the full impacts of a strike on a
community is that the impact of a strike on passengers' travel
decisions is often unknown. For example, while more than 100
communities lost Comair service to and from Cincinnati during the
strike, all of these communities had service to Cincinnati from another
airline. Thus, although hotel occupancy reportedly fell by more than 18
percent in Northern Kentucky in the strike's first month, the degree to
which this drop was attributable solely to the strike is unknown.
Apart from community-level analysis of strikes, some studies have
examined the overall economic impacts of aviation on regions or states.
For example, the Campbell-Hill Aviation Group, on behalf of an industry
interest group, published a report examining the state-level impact of
a potential loss of aviation service, but this study did not evaluate
the impact of any particular strikes on local or regional
economies.[Footnote 22] For example, the study stated that, in the year
ending in March 2002, Delta had 10 percent of the passenger traffic in
Texas and projected that a 10 percent reduction in aviation benefits
would cause a daily reduction of $17.7 million in one measure of the
Texas economy, its gross domestic product (GDP).[Footnote 23]
DOT also has on occasion produced wide-ranging assessments of the
impacts of potential airline strikes, but these studies have never
addressed the impacts of strikes that actually occurred. These studies
are conducted at the request of the NMB, which uses them in evaluating
whether the labor dispute threatens to interrupt essential
transportation services in any part of the country. Once the NMB makes
this assessment, it notifies the President, who may, at his discretion,
empanel a PEB. If the NMB believes an airline strike is probable, it
may request the department to examine the possible economic
consequences of that strike. The department reports the extent of
potentially lost air service to hub and spoke cities of the affected
carrier, the number of passengers that would have no service if a
strike were to occur, possible financial impacts on the carrier,
indirect impacts on the national economy, and the mitigating and
aggravating factors on the impacts of a strike. While DOT's reviews may
examine many areas that could be affected by a strike, they examine
only potential strikes and are not conducted after actual strikes.
Community-Level Impact of Any Future Strike Would Depend Partly on
Service Available from Other Airlines:
While comprehensive studies of community-level impacts of past strikes
are not available, one thing that emerges from our analysis is that any
future strike's impact on a given community is likely to be affected by
the level of service available from other airlines. If alternative
service is greatly limited, travelers may have to take alternative--and
less direct--routes offered by other airlines, or, in extreme cases,
travel great distances to other airports in order to fly at all. Those
impacts on travelers and businesses will vary depending on whether the
community is a hub or spoke destination and even among an airline's
hubs and spoke destinations.
The impact of a future strike at an airline's hub locations would
depend in part on which airline is involved in the strike and its
market share at the hub. Some airlines dominate air traffic at their
hubs to a much greater extent than other airlines do, and a strike
involving an airline with a dominant position at most of its hubs would
likely have more impact than a strike involving an airline that is
hubbing out of locations where competition is greater. In 2001, the
airlines with the most and least dominated hubs (based on the
percentage of total available seats controlled by the hubbing airline)
were US Airways and America West. (See fig. 6.) US Airways averaged 81
percent of the seats offered at its hubs, while America West averaged
32 percent. Thus, based on the loss of seating capacity at its hubs, a
strike at US Airways that halted service would likely have
substantially more impact on its hub communities than a strike at
America West that halted service.
Figure 6: 2001 Market Shares for Major Airlines at Their Hubs:
[See PDF for image]
[End of figure]
Among a single airline's hub cities, the impact of a strike would also
likely vary depending on service available from alternate carriers at
those cities. Again, the impact of a strike at the hubbing carrier or
its regional partners would be more substantial at more highly
dominated hubs. For example, in 2001, Delta and its regional partners
accounted for 91 percent of the seats available in Cincinnati, but only
19 percent of available seats at the Dallas/Fort Worth International
Airport, which has the lowest market share among Delta's hubs.
Consequently, a strike against Delta would likely have caused much
greater disruption in Cincinnati than in Dallas. In contrast to the
differences among Delta's hubs, the impact of a strike at Northwest
would likely be felt equally at its Minneapolis/St. Paul, Detroit, and
Memphis hubs. At each of its hubs, Northwest offered between 77 and 80
percent of available seats.
As at hubs, the impacts of strikes on available air service at spoke
cities would also depend on the amount and type of available
alternative service. Those communities with air service from other
carriers have a greater opportunity to mitigate the potential impact of
a strike by enabling travelers to access the national air system using
competing airlines. For example, figure 7 shows available air service,
as of April 2003, at spoke communities served by Delta's regional
partner, Comair, from Cincinnati, and by Northwest's regional carrier,
Mesaba, from Minneapolis-St. Paul. Comair provided nonstop service to a
total of 101 U.S. communities from Cincinnati. All but one of these
communities had alternative service to Cincinnati from another airline-
-64 with nonstop service, 36 with one-stop service.[Footnote 24] Thus,
if Comair's operations were to be disrupted by a strike, passengers at
these communities would still have the opportunity for service to and
from Cincinnati. The picture at Minneapolis-St. Paul is somewhat
different. There, 10 of the 47 spoke cities served by Mesaba would have
no alternative service to Minneapolis-St. Paul.
Figure 7: Spoke Communities Served from Cincinnati and Minneapolis-St.
Paul Retain Service from Competing Airlines:
[See PDF for image]
Note: Data are from airline schedules for the week of April 21-25,
2003.
[End of figure]
Other Factors Also Influence the Total Impact of Airline Strikes:
Several other factors could also influence the impact of a future
strike on a community. The length of the strike is one such factor;
longer strikes are more likely to have an adverse impact. Since
deregulation, strikes have varied from 24 minutes for an American pilot
strike in 1997 to almost 2 years for a Continental mechanics strike
(1983-1985). Another likely factor is financial preparation; as already
mentioned, the local impact of the Comair strike was likely mitigated
somewhat by the union's payments to striking pilots. Similarly, the
ability of airlines to operate through a strike--whether by hiring
replacement workers or having union members cross picket lines--could
also influence a strike's impact. For example, during a strike by
Continental mechanics lasting almost 2 years, some Continental workers
crossed the picket line and continued working. This allowed Continental
to continue operation after a shutdown of only 3 days. Tactics used by
the striking union can also reduce the overall impact. Alaska flight
attendants used a technique called "CHAOS" (Creating Havoc Around Our
System) that involved intermittent walkouts of certain crews on certain
days.[Footnote 25] This tactic kept certain flights from operating, but
did not shut down the entire airline.
Nonstrike Work Actions Have Greater Impacts on Passengers than Lengthy
Negotiations:
Our analysis indicates that passenger service has been affected more
adversely by nonstrike work actions than by an increase in the length
of negotiations. Generally, but not always, as negotiation periods
increased, there has been a slight decline in on-time flights.[Footnote
26] However, the impact of these negotiations has been unclear, because
the decline may also have been affected by other factors such as poor
weather, aircraft maintenance, runway closures, air traffic control
system decisions, or equipment failures. By comparison, the 10 court-
recognized, nonstrike work actions more clearly resulted in negative
impacts on passengers, as shown through such measures as a decrease in
the number of on-time flights, an increase in the number of flight
problem complaints,[Footnote 27] and a decrease in passenger traffic.
Impact of Negotiation Lengths on Passengers Is Unclear:
Our analyses found a slight correlation between the length of
negotiations and adverse impacts on passengers.[Footnote 28] We
analyzed 23 negotiations between airlines and pilot unions from 1987 to
2002.[Footnote 29] As negotiations lengthened, the frequency of on-time
arrivals declined slightly. However, it is not clear if the change in
on-time flights is attributable solely to negotiation lengths, or if
other factors may also have contributed to the on-time performance.
DOT's data on flight arrival and departure timeliness indicate whether
a flight is delayed, but not what caused the delay. Common factors for
delays include severe weather, aircraft maintenance, runway closures,
customer service issues (e.g., baggage and accommodating passengers
with special needs, such as those in wheelchairs or youths requiring
escorts), air traffic control system decisions, and equipment failures.
Thus, despite the apparent relation between lengthening negotiations
and a deterioration of service quality, other exogenous factors may
explain the change in flight delays.
Nonstrike Work Actions Have Clearer Adverse Impacts on Passengers:
Available data indicates that nonstrike work actions have had adverse
impacts on passengers. While DOT data do not specifically identify
these actions as the causes for the delays or the reasons for the
complaints, increases in the number of late flights, passenger
complaints, and decreases in passenger traffic during the period of the
actions suggest a clearer relationship than is apparent with these same
measures and lengthy negotiations. The periods in which nonstrike work
actions occur show decreases in on-time flights, increases in passenger
complaints, and decreases in passenger traffic. Two examples of such
actions, the American pilot sickout and the Delta pilot slowdown, are
described in the next two sections.
American Pilot Sickout:
American experienced decreases in on-time flights, increases in
customer complaints, and drops in passenger traffic during a pilot
sickout. (Under FAA regulations, any airline pilot can take himself out
of the cockpit if he is sick, overly stressed, or does not feel "fit to
fly." During a sickout, pilots utilize these regulations to excuse
themselves from work in order to put economic pressure on the airline
during the negotiation.) In December 1998, AMR Corp, the parent company
of American, purchased Reno Air, whose pilots were then to be
integrated into a single workforce. In early 1999, American pilots
began a sickout over a dispute involving a side agreement that would
integrate Reno Air operations. On February 10, 1999, a federal judge
ordered the pilots to return to work. Subsequently, the number of
flights cancelled increased. On February 13, 1999, the judge found the
pilots' union in contempt of court.[Footnote 30] By February 16, the
airline reported a return to its normal schedule but, reportedly,
pilots were still refusing to work overtime and were adhering to work-
to-rule practices, meaning that they would follow every regulation
stipulated by the FAA in order to slow the airline.
Figure 8 illustrates on-time arrival and departure rates at Dallas/Fort
Worth International Airport for the period of August 1998 through
December 1999 for American and Delta, which also operates a hub at that
airport. The on-time flight statistics for the two airlines are
relatively equal prior to the sickout period. During the next several
months, American's on-time record fell below that of Delta. Both
carrier's on-time rates declined somewhat, suggesting that other
factors such as weather might also influence flight operations.
However, the difference between the two airlines during this period is
greater than in other periods. In August 1999, when Reno Air's
operations were officially integrated--even though no agreement was
made--the two airlines' records resumed a more closely parallel path.
Figure 8: On-Time Flight Statistics for American and Delta at Dallas/
Fort Worth International Airport, August 1998 to December 1999:
[See PDF for image]
[End of figure]
The American sickout also caused increases in passenger flight problem
complaints. Figure 9 compares the change in complaints against American
and Delta. The complaints began to rise in February of 1999 and,
generally, continued to increase into the summer, when American reached
an agreement with its pilots.
Figure 9: Flight Problem Complaints for American and Delta from August
1998 to December 1999:
[See PDF for image]
[End of figure]
A comparison of passenger traffic between American and Delta at Dallas/
Fort Worth International Airport indicates that passenger traffic
declined either to avoid the carrier experiencing the nonstrike work
action or due to grounded flights. (American grounded up to 2,250
flights per day during the sickout period.) (See fig. 10.) During the
American pilot sickout in February 1999, there was a drop in American's
passenger traffic. Compared to the year before, American's passenger
traffic declined by 15 percent while Delta's passenger traffic rose by
5 percent.
Figure 10: Passengers Carried on American and Delta at Dallas/Fort
Worth International Airport, February 1998 and 1999:
[See PDF for image]
[End of figure]
Delta Pilot Slowdown:
Another example of the impact of nonstrike work actions on passengers
is the Delta slowdown in 2000-2001. In September 1999, Delta began
negotiations with its pilots and submitted a contract proposal, which
sought to tie future raises to the company's financial performance. As
a result, Delta pilots began refusing to fly overtime in the winter of
2000. When compared to Continental's operations at Atlanta Hartsfield
International Airport,[Footnote 31] Delta experienced substantial
declines in on-time flights and increases in flight problem complaints
while also experiencing declines in passenger traffic. Delta first went
to court on December 5, 2000, and was denied an injunction. The airline
then took the suit to the Eleventh Circuit on January 18, 2001, and the
denial was overturned and remanded for injunction.
Figure 11 shows the percent of on-time flights for both Delta and
Continental at Atlanta's Hartsfield International Airport for the
period of August 2000 to August 2001. During the slowdown period from
December to January, there is a decline in Delta's on-time flights
relative to Continental's. Once the court issued an injunction against
the union, the two airlines resumed a more similar pattern.
Figure 11: On-Time Flight Statistics for Delta and Continental at
Atlanta Hartsfield International Airport, August 2000 to August 2001:
[See PDF for image]
[End of figure]
Delta's pilot slowdown also showed an increase in passenger complaints
during this period. Figure 12 compares the change in passenger flight
problem complaints about Delta and Continental during Delta's slowdown.
Flight complaints rose sharply in December and January, peaking at 185
in January 2001, and immediately declining after the union was enjoined
on January 18, 2001.
Figure 12: Flight Problem Complaints for Delta and Continental, August
2000 to August 2001:
[See PDF for image]
[End of figure]
Finally, Delta's passenger traffic at Atlanta Hartsfield International
Airport also declined during the slowdown, but the pattern was less
pronounced than for the American sickout discussed earlier. (See fig.
13.) In December 2000, when Delta first pursued an injunction in court,
Delta's and Continental's passenger traffic dropped by 9 and 4 percent,
respectively. Unlike the American sickout (when up to 2,250 flights
were grounded per day), Delta pilots' refusal to fly overtime grounded
far fewer flights--about 100 to 125 per day--which means less
passengers were affected by cancelled flights as compared to American.
Figure 13: Change in Passenger Traffic on Delta and Continental at
Atlanta Hartsfield International Airport in December 1999 and 1 Year
Later during the Nonstrike Work Action in December 2000:
[See PDF for image]
[End of figure]
Agency Comments:
We provided copies of a draft of this report to NMB for review and
comment. NMB indicated it generally agreed with the accuracy of our
report, and it provided technical clarifications, which were
incorporated into the report as appropriate. The NMB also provided an
additional statement, which is included in appendix VIII. We also
provided selected portions of a draft of this report to the major
airlines and unions to verify the presentation of factual material. We
incorporated their technical clarifications as appropriate.
As agreed with your office, unless you publicly announce the contents
of this report earlier, we plan no further distribution until 30 days
from the report date. At that time, we will provide copies to the
Honorable Francis J. Duggan, Chairman of the National Mediation Board;
the Honorable Norman Y. Mineta, Secretary of Transportation; and other
interested parties. We also will make copies available to others upon
request. In addition, the report will be available at no charge on the
GAO Web site at http://www.gao.gov.
If you or your staff have any questions about this report, please call
me at (202) 512-2834, HeckerJ@gao.gov or Steve Martin at (202) 512-
2834, MartinS@gao.gov. Appendix VIII lists key contacts and key
contributors to this report.
Sincerely yours,
JayEtta Z. Hecker
Director, Physical Infrastructure Issues:
Signed by JayEtta Z. Hecker:
[End of section]
Appendix I: Additional Questions:
In addition to the three primary questions, you asked us how many
states use a system of binding arbitration and last offer arbitration
with their essential service personnel. You also asked how many times
in the last 25 years has Congress had to intervene in a dispute with
railroads and what were the outcomes.
As of November 2002, according to information from officials of Harvard
University, 23 states--including the District of Columbia--use binding
arbitration and/or last offer arbitration as arbitration options. (See
table 2.) Of those, none use last offer arbitration as their sole
arbitration option.
Table 2: States That Include Binding Arbitration or Last, Best Offer
Arbitration as a Dispute Resolution Option:
1; State: California; Type of arbitration included in resolution
options: Binding arbitration.
2; State: Maine; Type of arbitration included in resolution options:
Binding arbitration.
3; State: Illinois; Type of arbitration included in resolution
options: Last offer arbitration.
4; State: Michigan; Type of arbitration included in resolution
options: Last offer arbitration.
5; State: Oklahoma; Type of arbitration included in resolution
options: Last offer arbitration.
6; State: Tennessee; Type of arbitration included in resolution
options: Last offer arbitration.
7; State: Colorado; Type of arbitration included in resolution
options: Binding arbitration and last offer arbitration.
8; State: Conneticut; Type of arbitration included in resolution
options: Binding arbitration and last offer arbitration.
9; State: Delaware; Type of arbitration included in resolution
options: Binding arbitration and last offer arbitration.
10; State: District of Columbia; Type of arbitration included in
resolution options: Binding arbitration and last offer arbitration.
11; State: Hawaii; Type of arbitration included in resolution
options: Binding arbitration and last offer arbitration.
12; State: Iowa; Type of arbitration included in resolution options:
Binding arbitration and last offer arbitration.
13; State: Maryland; Type of arbitration included in resolution
options: Binding arbitration and last offer arbitration.
14; State: Minnesota; Type of arbitration included in resolution
options: Binding arbitration and last offer arbitration.
15; State: Montana; Type of arbitration included in resolution
options: Binding arbitration and last offer arbitration.
16; State: Nevada; Type of arbitration included in resolution
options: Binding arbitration and last offer arbitration.
17; State: Ohio; Type of arbitration included in resolution options:
Binding arbitration and last offer arbitration.
18; State: Oregon; Type of arbitration included in resolution
options: Binding arbitration and last offer arbitration.
19; State: Pennsylvania; Type of arbitration included in resolution
options: Binding arbitration and last offer arbitration.
20; State: Rhode Island; Type of arbitration included in resolution
options: Binding arbitration and last offer arbitration.
21; State: Texas; Type of arbitration included in resolution
options: Binding arbitration and last offer arbitration.
22; State: Washington; Type of arbitration included in resolution
options: Binding arbitration and last offer arbitration.
23; State: Wisconsin; Type of arbitration included in resolution
options: Binding arbitration and last offer arbitration.
Source: Harvard University.
[End of table]
According to information from the National Mediation Board, in the last
25 years Congress intervened in railroad negotiations eight times.
These interventions occurred between 1982 and 1992. (See table 3.)
Congressional interventions do not involve the airlines.
Table 3: Congressional Interventions in Railroad Negotiations:
1; Date: 6/26/92; Remark: Binding arbitration imposed by Congress.
2; Date: 6/26/92; Remark: Binding arbitration imposed by Congress;
parties reached voluntary agreement.
3; Date: 6/26/92; Remark: Binding arbitration imposed by Congress in
three cases; parties reached voluntary agreement in all others.
4; Date: 4/18/91; Remark: Terms imposed by Congress.
5; Date: 8/4/88; Remark: Status quo extended by Congress.
Date: 6: 9/9/88; Remark: 6: Terms imposed by Congress.
6; Date: 1/28/87; Remark: Status quo extended by Congress; parties
reached voluntary agreement.
7; Date: 8/21/86; Remark: Status quo extended by Congress.
Date: 8: 9/30/86; Remark: 8: Terms imposed by Congress.
8; Date: 9/22/82; Remark: Terms imposed by Congress.
Source: NMB.
[End of table]
[End of section]
Appendix II: Objectives, Scope, and Methodology:
This report examines the following three questions:
* What have been the major trends of labor negotiations in the airline
industry since the industry was deregulated in 1978, including the
number and length of negotiations and the number of strikes,
presidential interventions to avoid or end strikes, and nonstrike work
actions?
* What has been the impact of airline strikes on communities?
* What have been the impacts of the length of negotiations and the
occurrence of nonstrike work actions on passengers?
To determine the trends of airline labor negotiations, including the
length of negotiations, the number of strikes, the number of
presidential interventions, and the number of nonstrike work actions,
we analyzed data from multiple sources. We obtained our data from major
U.S. airlines and various labor organizations. The labor groups
included the Air Line Pilots Association (ALPA), the Coalition of
Airline Pilots Associations (CAPA), the Association of Flight
Attendants (AFA), the International Association of Machinists and
Aerospace Workers (IAM), and the International Brotherhood of Teamsters
(IBT). We also received substantial negotiation and contract data from
the U.S. National Mediation Board (NMB) and the Airline Industrial
Relations Conference (AIRCon), a group funded by major U.S. airlines to
facilitate the exchange of contract negotiation information and other
labor relations matters among carriers. Because data were not available
for commuter (regional) and all-cargo carriers, we originally limited
our analysis to passenger airlines that are considered majors by the
U.S. Department of Transportation (DOT) that were in operation during
2001. These airlines were Alaska, America West, American, American
Eagle, American Trans Air (recently renamed as ATA Airlines),
Continental, Delta, Northwest, Southwest, TWA[Footnote 32], United, and
US Airways. We later were not able to include American Eagle or
American Trans Air, which met the DOT criteria, in our analysis because
we were not able to obtain information on these airlines.
Dates listed as negotiation start dates differ between the airlines,
AIRCon, and NMB, therefore, limiting the accuracy of the data
collected. A negotiation's "start date" can be when the carrier's
management or union exchange a written notice stating that one of the
parties desires a change in rates of pay, work rules, or working
conditions or when face-to-face negotiations actually begin (i.e., when
the two parties sit at a table and verbally negotiate the contract). By
contrast, the NMB defines a "start date" only when it is called for
mediation. For the purposes of our data collection, we first used dates
provided by the airlines to AIRCon at the time the contract was being
negotiated. If those were not available, we turned to the dates
provided directly to us by the airlines from their files when
available. We were supplied different dates, including ratification
dates and settlement dates, for the end point of negotiations. We know
of at least one union that did not have its members vote to ratify
contract changes until after 1982. Again, we first used AIRCon provided
ratification or settlement dates, if possible, and, in cases where
these were not available, we used airline provided dates, or dates
provided by NMB. We were unable to calculate a negotiation length for
83 of the 236 contracts because we could not identify either a start
date or a ratification or settlement date for them. In addition, we did
not calculate negotiation lengths for 6 initial contracts, the first
contract a union signs after a craft or class becomes recognized at an
airline.
To obtain information on nonstrike work actions, we also examined media
sources and also reviewed federal court records. Based on the
information we were able to review, we defined court-recognized,
nonstrike work actions as those work actions for which airlines
obtained either temporary restraining orders or injunctions against
unions. Officials from the airlines we spoke with stated that there
have been many more nonstrike work actions than the 10 judged by the
courts. Even some union officials stated that union members have taken
actions that they considered legal under their contract or Federal
Aviation Administration (FAA) regulations. These same actions, on other
occasions, have been found to be violations of the status quo by the
courts. Additional cases of nonstrike work actions, however, have been
difficult to prove. Airline management has either been unable to
produce the needed evidence in court or airlines never took unions to
court. Union officials also strenuously deny illegal activity on the
part of their unions.
We interviewed officials from airlines, labor unions, the NMB, and
industry groups. The airlines we spoke with included American, American
Trans Air, Continental, Delta, Northwest, Southwest, Comair, Atlantic
Coast Airlines, Federal Express, United Parcel Service, and Airborne
Express. We only analyzed data from airlines where we could obtain full
data. The labor groups we interviewed included ALPA, CAPA, AFA, IAM,
and IBT. We also held discussions with officials from NMB, the Air
Transport Association (ATA), Communities for Economic Strength Through
Aviation (CESTA), and AIRCon.
To determine the impact of airline strikes on communities, we searched
for studies of these impacts from airlines, industry groups, and
academic institutions. Specifically, we talked with United, Delta,
Comair, ATA, and CESTA. Based on suggestions from airlines, unions,
interest groups, and our own research we also talked with faculty at
Harvard, the Massachusetts Institute of Technology, the University of
Cincinnati, and the University of Kentucky. None of these sources knew
of any published studies on specific impacts of past strikes on any
community. In discussions with NMB, we learned that DOT produces
studies, solely at the request of NMB, on the likely impacts of
probable airline strikes on the airline and local and national
economies. We obtained a copy of one of these studies from DOT. We also
analyzed data on airline schedules and market share from Sabre, Inc.;
BACK Aviation Solutions; and the Campbell-Hill Aviation Group. We also
reviewed local media reports from communities affected by strikes. Due
to the lack of published studies or generally accepted methodology to
determine the impact of strikes, we cannot discount other possible
causes for these impacts.
To determine the impact of the length of negotiations and court-
recognized, nonstrike work actions on passengers, we analyzed data on
airline operational performance from DOT's Air Travel Consumer Report
and passenger traffic information from BACK Aviation Solutions. To
determine the impact of negotiation lengths, we compared on-time
performance throughout the course of 23 negotiations between airlines
and pilot unions. To determine the impact of nonstrike work actions, we
compared airlines' on-time performance and flight complaints between
airlines before, during, and after the 10 court-recognized, nonstrike
work actions. We also analyzed changes in passenger traffic among
airlines during these actions. Though our analysis included performing
a correlation between on-time arrivals and the length of airline labor
contract negotiations, we did not perform any multivariate analysis,
and thus, cannot rule out possible alternative causes.
We conducted our review between August 2002 and May 2003 in accordance
with generally acceptable government accounting principles.
[End of section]
Appendix III: Additional Background Information on the Railway Labor
Act:
The Railway Labor Act, 45 U.S.C. § 151, et. seq., (RLA) was passed by
Congress in May 1926 to improve labor-management relations in the
railroad industry. In January 1926, a committee of railway executives
and union representatives jointly presented a draft bill to Congress
that was universally supported by those in the industry. Congress did
not make any changes of substance to the bill, and the RLA was signed
by the President on May 20, 1926.[Footnote 33] Congress has not altered
the basic structure of the act that labor and management use to resolve
what are known as "major disputes," i.e., disputes over the creation
of, or change of, agreements concerning rates of pay, rules, or working
conditions. After discussions with airline management and labor the act
was applied to air carriers in 1936.[Footnote 34]
As a method to keep labor disputes from interrupting commerce, the new
law represented a significant departure from past labor practices by
requiring both sides to preserve the status quo during collective
bargaining and preventing either side from taking unilateral action.
When labor and management representatives drafted the legislation, they
agreed that both sides of a labor dispute should negotiate the dispute
and not make any change in the working conditions in dispute until all
issues were worked out under the deliberate process outlined in the
act.
Key Provisions of the RLA:
The RLA is not a detailed statute. The main purposes of the act are
threefold. First, Congress intended to establish a system that resolves
labor disputes without interrupting commerce in the airline and
railroad industries. The statute requires both labor and management "to
exert every reasonable effort to make and maintain agreements ... and
to settle all disputes ...."[Footnote 35] The Supreme Court has
described that duty as being the "heart" of the act.[Footnote 36]
Second, the act imposes on the parties an obligation to preserve and to
maintain unchanged during the collective bargaining process "those
actual, objective working conditions and practices, broadly conceived,
which were in effect prior to the time the pending dispute arose and
which are involved in or related to that dispute."[Footnote 37] This is
generally known as "maintaining the status quo.":
Finally, the act requires that: "Representatives, for the purposes of
this Act, shall be designated by the respective parties ... without
interference, influence, or coercion exercised by either party over the
self-organization or designation of representatives by the
other.[Footnote 38]" That obligation was strengthened in 1934 so as to
prohibit either party from interfering with, influencing, or coercing
"the other in its choice of representatives[Footnote 39].":
Collective Bargaining Process under the RLA:
The collective bargaining process established by the RLA is designed to
preserve labor relations peace. The carrier is required to maintain the
status quo before, during, and for some time after the period of formal
negotiations. The union and the employees have the reciprocal
obligation to refrain from engaging in actions that are designed to
economically harm the company, such as strikes during the same period.
These actions are termed economic self-help in the act.
Airline labor and management periodically engage in negotiations to
reach a comprehensive collective bargaining agreement that will remain
in effect for a defined period, usually 2 or 3 years. The parties are
required to submit written notices ("Section 6 notices") of proposed
changes in rates of pay, rules, and working conditions. In some cases,
parties may agree that collective bargaining is required to proceed
according to a particular time schedule. If those direct discussions do
not result in an agreement resolving a dispute, either party or the
National Mediation Board (NMB) can initiate mediation.
The RLA requires both parties to maintain collectively bargained rates
of pay, rules, and working conditions while they negotiate amendments
to the agreement. This requirement extends the status quo after an
existing agreement becomes amendable if no agreement is reached by that
time. If mediation proves unsuccessful, the NMB appeals to the parties
to submit the dispute to binding interest arbitration. If that is
unsuccessful, the statute provides for a 30-day cooling-off period.
There can be no lawful self-help by either side during this period.
Even after the termination of the 30-day period, the self-help option
is contingent. If a dispute threatens "substantially to interrupt
interstate commerce to a degree such as to deprive any section of the
country of essential transportation services," the President, upon
notification by the NMB, is empowered to create an emergency board to
investigate the dispute and issue a report that is followed by an
additional 30-day period for final negotiations.
After this process, the parties are left to self-help and further
negotiation to reach a settlement. The only alternative is
congressional action, which has never been used in an airline labor
dispute.
[End of section]
Appendix IV: Contracts Negotiated and Ratified or Settled by the
Amendable Date:
1; Carrier: Alaska; Union: ALPA; Craft: Pilots; Amendable date: 4/30/
80; Ratification or settlement date: 4/15/80.
2; Carrier: Alaska; Union: ALPA; Craft: Pilots; Amendable date: 4/30/
83; Ratification or settlement date: 3/2/83.
3; Carrier: Alaska; Union: ALPA; Craft: Pilots; Amendable date: 5/1/91;
Ratification or settlement date: 4/29/91.
4; Carrier: Alaska; Union: ALPA; Craft: Pilots; Amendable date: 4/30/
93; Ratification or settlement date: 2/16/93.
5; Carrier: Alaska; Union: ALPA; Craft: Pilots; Amendable date: 12/1/
97; Ratification or settlement date: 10/15/97.
6; Carrier: American; Union: TWU; Craft: Mechanics; Amendable date: 3/
1/93; Ratification or settlement date: 10/7/91.
7; Carrier: Continental; Union: TWU; Craft: Dispatchers; Amendable
date: 4/1/99; Ratification or settlement date: 6/1/98.
8; Carrier: Delta; Union: PAFCA; Craft: Flight control; Amendable date:
1/1/82; Ratification or settlement date: 1/22/81.
9; Carrier: Delta; Union: PAFCA; Craft: Flight control; Amendable date:
1/1/86; Ratification or settlement date: 10/25/85.
10; Carrier: Northwest; Union: ALPA; Craft: Pilots; Amendable date: 7/
1/80; Ratification or settlement date: 6/28/80.
11; Carrier: Northwest; Union: ALPA; Craft: Pilots; Amendable date: 3/
1/94; Ratification or settlement date: 7/6/93.
12; Carrier: Northwest; Union: IAM; Craft: Mechanics; Amendable date:
7/1/88; Ratification or settlement date: 6/6/88.
13; Carrier: TWA; Union: ALPA; Craft: Pilots; Amendable date: 9/1/95;
Ratification or settlement date: 10/3/94.
14; Carrier: United; Union: ALPA; Craft: Pilots; Amendable date: 11/30/
94; Ratification or settlement date: 7/12/94.
15; Carrier: United; Union: IAM; Craft: Dispatchers; Amendable date:
11/30/94; Ratification or settlement date: 7/12/94.
Legend:
ALPA = Air Line Pilots Association:
TWU = Transport Workers Union:
PAFCA = Professional Airline Flight Control Association:
IAM = International Association of Machinists and Aerospace Workers:
Sources: National Mediation Board, airlines, and labor unions.
Note: At least one union notified us that they did not have their
members ratify agreements before 1982.
[End of table]
[End of section]
Appendix V: Airline Strikes That Have Occurred Since Deregulation:
1; Carrier: Alaska; Union: IAM; Craft or class: Mechanics; Duration of
negotiations: 2/17/84-6/3/85; Dates of strike: 3/4/85 - 5/4/85;
Duration of strike: 2 months.
2; Carrier: American; Union: APA; Craft or class: Pilots; Duration of
negotiations: 6/30/94-5/5/97; Dates of strike: 2/15/97; Duration of
strike: 24 minutes.
3; Carrier: American; Union: APFA; Craft or class: Flight attendants;
Duration of negotiations: 11/18/92-10/10/95; Dates of strike: 11/18/93
- 11/22/93; Duration of strike: 5 days.
4; Carrier: American; Union: TWU; Craft or class: Flight instructors;
Duration of negotiations: Not available; Dates of strike: 11/4/79;
Duration of strike: 1 day.
5; Carrier: Continental; Union: ALPA; Craft or class: Pilots; Duration
of negotiations: Not available; Dates of strike: 10/1/83 - 10/31/85;
Duration of strike: 2 years.
6; Carrier: Continental; Union: IAM; Craft or class: Mechanics;
Duration of negotiations: 1981-1985; Dates of strike: 8/13/83 - 4/16/
85; Duration of strike: 1 1/2 years.
7; Carrier: Continental; Union: IBT; Craft or class: Flight engineers;
Duration of negotiations: Not available; Dates of strike: 9/23/79 - 10/
6/79; Duration of strike: 13 days.
8; Carrier: Continental; Union: UFA; Craft or class: Flight attendants;
Duration of negotiations: Not available; Dates of strike: 12/5/80 - 12/
21/80; Duration of strike: 16 days.
9; Carrier: Continental; Union: UFA; Craft or class: Flight attendants;
Duration of negotiations: Not available; Dates of strike: 10/1/83 - 4/
17/85; Duration of strike: 1 1/2 years.
10; Carrier: Continental; Union: IAM; Craft or class: Flight
attendants; Duration of negotiations: 1985-1989; Dates of strike: 3/15/
89 - 12/15/89; Duration of strike: 9 months.
11; Carrier: Northwest; Union: ALPA; Craft or class: Pilots; Duration
of negotiations: 8/27/96-9/12/98; Dates of strike: 8/29/98 - 9/12/98;
Duration of strike: 15 days.
12; Carrier: Northwest; Union: IAM; Craft or class: Mechanics, Flight
kitchen; Duration
of negotiations: 9/29/81-6/16/82; Dates of strike: 5/22/82 - 6/25/82;
Duration of strike: 1 month.
13; Carrier: Southwest; Union: IAM; Craft or class: Mechanics; Duration
of negotiations: Not available; Dates of strike: 1/13/80 - 2/1/80;
Duration of strike: 19 days.
14; Carrier: United; Union: ALPA; Craft or class: Pilots; Duration of
negotiations: 1/30/84-6/17/85; Dates of strike: 5/17/85 - 6/14/85;
Duration of strike: 29 days.
15; Carrier: United; Union: IAM; Craft or class: Mechanics, Ramp and
stores, Food services, Dispatchers, Security Officers; Duration of
negotiations: 10/1/78-5/24/79; Dates of strike: 3/31/79 - 5/27/79;
Duration of strike: 2 months.
16; Carrier: USAir; Union: IAM; Craft or class: Mechanics; Duration of
negotiations: 2/14/90-10/13/92; Dates of strike: 10/5/92 - 10/8/92;
Duration of strike: 3 days.
Legend:
IAM = International Association of Machinists and Aerospace Workers:
APA = Allied Pilots Association:
APFA = Association of Professional Flight Attendants:
TWU = Transport Workers Union of America - AFL-CIO:
IBT = International Brotherhood of Teamsters:
UFA = Union of Flight Attendants:
ALPA = Air Line Pilots Association:
Sources: NMB, airlines, and labor unions.
[End of section]
[End of table]
Appendix VI: Court-recognized, Nonstrike Work Actions Since
Deregulation:
1; Carrier: American; Union: APA; Craft: Pilots; Work action:
Sickout; Plaintiff request: TRO sought; Date of court decision: 2/10/
1999; Outcome: Awarded.
2; Carrier: American; Union: TWU; Craft: Mechanics; Work action:
Slowdown; Plaintiff request: TRO sought; Date of court decision: 2001;
Outcome: Awarded.
3; Carrier: American; Union: TWU; Craft: Mechanics; Work action:
Slowdown; Plaintiff request: TRO sought; Date of court decision: 1998;
Outcome: Awarded.
4; Carrier: American; Union: TWU; Craft: Mechanics; Work action:
Slowdown; Plaintiff request: Injunction sought; Date of court decision:
1999; Outcome: Granted.
5; Carrier: Delta; Union: ALPA; Craft: Pilots; Work action: Refuse
overtime; Plaintiff request: Injunction sought; Date of court decision:
2001; Outcome: Granted.
6; Carrier: Northwest; Union: AMFA; Craft: Mechanics; Work action:
Refuse overtime; Plaintiff request: Injunction sought; Date of court
decision: 5/11/2001; Outcome: Granted.
7; Carrier: Northwest; Union: IAM; Craft: Clerical, Flight Stock,
Kitchen; Work action: Slowdown; Plaintiff request: Injunction sought;
Date of court decision: 2/25/1999; Outcome: Granted.
8; Carrier: Northwest; Union: IBT; Craft: Flight attendants; Work
action: Sickout; Plaintiff request: Injunction sought; Date of court
decision: 1/5/2000; Outcome: Granted.
9; Carrier: TWA; Union: IAM; Craft: Mechanics; Work action: Sickout
and work stoppage; Plaintiff request: TRO sought; Date of court
decision: 1998; Outcome: Awarded.
10; Carrier: United; Union: IAM; Craft: Mechanics; Work action:
Slowdown; Plaintiff request: Injunction sought; Date of court decision:
7/1/2002; Outcome: Granted.
Legend:
APA = Allied Pilots Association:
TWU = Transport Workers Union of America - AFL-CIO:
ALPA = Air Line Pilots Association:
AMFA = Aircraft Mechanics Fraternal Association:
IAM = International Association of Machinists and Aerospace Workers:
IBT = International Brotherhood of Teamsters:
Sources: NMB, airlines, and courts.
[End of table]
[End of section]
Appendix VII: Number of Presidential Interventions Since Deregulation:
1; Carrier: American; Union: APA; Craft: Pilots; Amendable date: 8/
31/94; Presidential intervention date: 2/15/97; Actions taken:
Presidential Emergency Board.
2; Carrier: American; Union: APFA; Craft: Flight attendants;
Amendable date: 11/1/98; Presidential intervention date: 2001; Actions
taken: Presidential Emergency Board warning.
3; Carrier: American; Union: APFA; Craft: Flight attendants;
Amendable date: 12/31/92; Presidential intervention date: 1993; Actions
taken: President recommends binding interest arbitration.
4; Carrier: Northwest; Union: ALPA; Craft: Pilots; Amendable date:
11/2/96; Presidential intervention date: September 1998; Actions taken:
Presidential Emergency Board warning.
5; Carrier: Northwest; Union: AMFA; Craft: Mechanics; Amendable
date: 9/30/96; Presidential intervention date: 3/12/01; Actions taken:
Presidential Emergency Board.
6; Carrier: United; Union: IAM; Craft: Mechanics; Amendable date: 7/
12/00; Presidential intervention date: 1/19/02; Actions taken:
Presidential Emergency Board.
Legend:
APA = Allied Pilots Association:
APFA = Association of Professional Flight Attendants:
ALPA = Air Line Pilots Association:
IAM = International Association of Machinists and Aerospace Workers:
AMFA = Aircraft Mechanics Fraternal Association:
Sources: NMB and airlines.
[End of table]
[End of section]
Appendix VIII: Comments from the National Mediation Board:
NATIONAL MEDIATION BOARD WASHINGTON, D.C. 20572:
OFFICE OF THE CHAIRMAN (202)692-5000:
May 30, 2003:
Steven C. Martin
Assistant Director
U.S. General Accounting Office
441 G Street, N W Washington, DC 20548:
RE: National Mediation Board Statement on The General Accounting Office
Draft Report "Airline Labor Relations: Information on Trends and Impact
on Labor Actions" GAO-03-652:
Dear Mr. Martin:
This response to the GAO report further explains the role of the
National Mediation Board (NMB) and its expanded activities to
facilitate the relationships between airlines and their unions.
The NMB, was established by the 1934 amendments to the Railway Labor
Act (RLA) of 1926. The Board is an independent agency performing a
central role in facilitating harmonious labor-management relations
within two of the nation's key transportation sectors - the railroads
and airlines. Pursuant to the RLA, NMB programs provide an integrated
dispute resolution process that effectively meets the NMB's statutory
mandate to minimize work stoppages in the railroad and airline
industries by securing voluntary agreements.
The legislation creating the NMB is unique in that it was drafted by
labor and management, then passed by the Congress without amendment in
1934.
Beginning in 1994, the Commission on the Future of Worker-Management
Relations (the "Dunlop Commission") and its subcommittees examined each
of the nation's labor laws and the labor enforcement agencies. The
Airline Industry Labor-Management Committee, an offshoot of the Dunlop
Commission, was convened in October, 1995. In April, 1996, this body,
made up of representatives from airline management and labor, offered
as its first recommendation, "No Legislative Changes to the Railway
Labor Act." The Committee recommended several administrative changes,
all of which were subsequently adopted by the NMB.
The negotiation process usually begins with the parties engaging in
direct negotiations, without the presence or influence of the Board and
its mediators. The parties control the timing of direct negotiations,
with some beginning well before the amendable date of their current
contracts, and some beginning very near the amendable date. How long it
will take to complete negotiations and produce a tentative contract
agreement (an agreement between the parties subject to ratification by
a vote of the union members) is greatly influenced by the point at
which the parties apply for mediation, and how many unresolved issues
remain when they apply for mediation.
* The responsibility of the NMB to work with parties in both industries
to avoid disruptions to essential transportation services puts the
Board in a unique position to recognize and understand the impact of
potential work stoppages in both industries, for all sections of the
country.
* The Board has no control over the parties in direct negotiations.
Although some parties reach final resolution in direct negotiations,
the majority of parties file for mediation with the Board to resolve
their many open issues. In fact, within the last year the Board
received a case with almost 500 open issues from parties who had been
in direct negotiations, without the Board's presence, for over one
year.
If an agreement is not reached in direct negotiations, the parties are
required by law to come to the Board for mediation as part of the
contract negotiation process. Application for mediation with the NMB
may be made by either party, at which time a mediator is appointed and
the Board's active involvement begins.
When mediation cases are brought to the NMB there are internal customer
service standards against which the Board measures its performance.
Based upon the parties' performance over the years, the Board has
established the goal of managing cases to closure within one calendar
year of docketing, or within 45 days of face-to-face negotiations.
In Fiscal Year 2002, the Board handled 59 mediation cases. 55 (93%)
were closed with 45 days or less of face-to-face negotiation. 49 of the
59 cases (80%) were closed in one year or less.
[See PDF for image]
[End of figure]
In FY 2001, 94% of mediation cases were closed with 45 days or fewer of
negotiations, and 60% were closed in less than one year.
In FY 2002 cases were in mediation for an average of 14 days (at the
table) spread out over 287 calendar days. (Railroads averaged 7.3 days
of mediation in a 169 day period, and Airlines averaged 22.2 days of
mediation in a 420 day period.):
[See PDF for image]
[End of figure]
In FY 2002, six airline cases were spread over more than 500 days -
four United cases, Delta/TWU, and PSA/ALPA.
An excellent measure of performance,
particularly as it relates to the amount of Docketing - TA time it takes
the Board's mediators to
reach tentative agreements (contract language agreed to by both
bargaining committees, but subject to ratification by union
membership), is the amount of time between the docketing of a case and
the development of a tentative contract agreement. Over approximately
the past year and a half (March 2001 - September 2002) 74 cases went
from docketing to tentative agreements. Those cases were:
with Board mediators as follows: 8 reached tentative agreements in less
than 2 months; 3 reached tentative agreements in 2-3 months; 15 reached
tentative agreements in 3-6 months; 28 reached tentative agreements in
6-12 months; 12 reached tentative agreements in 12-18 months; 8 reached
tentative agreements in more than 18 months. In all, 54 cases (73%)
reached tentative agreements in less than one year. The longest case
(973 days) and the shortest case (1 day) were railroad cases.
[See PDF for image]
[End of figure]
If one looks at the performance of the Board over time, it is clear
that a large majority of cases come to the Board and reach agreement in
less than one year, with less than a month and a half at the table in
face-to-face negotiations with the assistance of a mediator.
It is the exception for cases to take more than a year. As mentioned,
work done in direct negotiation greatly affects the Board's ability to
resolve cases quickly. Also, there are many external factors in any
negotiation that may produce special circumstances.
If the parties cannot reach agreement, even with Board mediation, they
are offered arbitration, which either party may refuse. The refusal of
either party triggers a "cooling off" period, at the end of which
either party may engage in self-help. If the Board determines that a
work stoppage would cause significant disruption to essential
transportation services for any section of the country, the Board must
notify the President, who may choose to appoint a Presidential
Emergency Board (PEB). PEB's recommend a settlement to the parties, but
either party may reject the PEB's recommendations, leading to a final
cooling off period, further preventing self-help for another 30 days.
Even during cooling off periods and PEB's, the Board may continue
"public interest" meetings with the parties, often resulting in a
settled agreement.
During the past three years there have been two Presidential Emergency
Boards created. In FY 2002, one PEB was created (United/IAM), and the
parties reached agreement without a strike or lock-out in that case. In
FY 2001, again only one PEB was created (Northwest/AMFA), and again the
parties reached agreement without a strike or lock-out, in this case by
negotiating an agreement with the NMB's assistance before the PEB
issued its recommendations. There were no PEB's in FY 2000.
There have been five airline Presidential Emergency Boards in the last
twenty two years. The most recent airline PEB, before the one in FY
2001, was in 1997 (American Airlines/APA). There was one airline PEB in
1993 (a special PEB), and one in 1978 (Wein Air Alaska/ALPA).
Over the last three years the Board has helped the parties reach
tentative contract agreements in a total of 379 mediation and ADR
cases, with only one instance of self-help.
Since 1997, the Board's mediators have successfully resolved over 600
cases, with only three instances of self-help involving strikes, work
stoppages, or lock-outs. One of the three actions lasted for 90 minutes
before being resolved with assistance from the Board.
The experience of the Board's mediation staff is deep and varied.
Currently, 7 mediators are from the rail industry and 7 are from the
airline industry. 6 have a union background, and 8 have a management
background. 3 are former union presidents. 4 are lawyers.
The combined labor relations/mediation experience of the Board's
current mediators is 350 years (an average of 25 years each).
The NMB works hard to enable the parties to have productive labor
negotiations and productive relationships during the term of an
agreement. The parties come to the bargaining table with varying ideas
of what is beneficial. Labor wants to preserve an environment in which
it can maximize its gains, and in which it retains the only basic power
that it perceives itself to have - the right to withhold labor. Absent
these elements, most labor representatives would argue that
negotiations could not be beneficial for their constituents. Management
comes to the table wanting to preserve an environment in which it can
control costs and maintain the freedom to manage. Absent these
elements, management would argue that negotiations could not be
beneficial. The challenge of all mediation is to balance these
competing definitions of beneficial and get the parties to what our
mediators refer to as the "zone of reasonableness.":
From the NMB's point of view, and from the point of view of many
researchers, there is another important element that contributes to
mutually beneficial and productive labor negotiations - the
relationship that is created between the parties when negotiations are
handled well and in which interests of both parties are addressed.
Industrial psychologists call it "relational coordination" - addressing
problems jointly, and using a good relationship to weather bad times
and allow creativity in problem solving. Mutually beneficial,
productive negotiations must address the fundamental interests of each
party, and must contribute to positive relationships among the parties.
The Board continues to move the parties toward the ideal negotiating
environment in two ways. First, our mediation program acknowledges the
needs and interests of the parties and does, in the vast majority of
cases, find the zone of reasonableness. Second, our Alternative Dispute
Resolution (ADR) program uses an interest-based approach to bargaining
that helps improve the relationships that are so important to future
success.
A part of the administrative change the Board undertook after the 1996
reports was the creation of an ADR program. Under this program, the
parties have the option of using facilitated discussions, called
"Interest Based Bargaining," to negotiate contracts in a non-
traditional, cooperative manner. In 1997, there was one IBB case. In
2002, almost half of the cases handled at the NMB began as IBB cases.
The trend is that more parties are recognizing the value of the IBB
process, and that more contracts are being negotiated using IBB.
The IBB program was conceived as a way to intervene early in
negotiations, starting the parties off in a cooperative negotiating
environment. The original assumption was that most parties would use
the IBB process and then move to traditional mediation to resolve some
of the more difficult contract issues (e.g.
wages). That has been the norm, but the program has been very
successful in moving negotiations all the way through to tentative
agreements without resorting to traditional mediation in cases
involving both large and small carriers.
The report focused on one dispute in particular that arose during the
contract, prior to the amendable date, between American Airlines and
the Allied Pilots Association over American Airlines' purchase of Reno
Air. As part of its ADR program, the NMB provides not only grievance
mediation, but also facilitation of mid-contract disputes. It is
precisely in those types of "nonstrike work actions" that the NMB's ADR
programs are effective at controlling.
Respectfully Submitted,
Francis J. Duggan
Chairman:
Signed by Francis J. Duggan:
[End of section]
Appendix IX :GAO Contacts and Staff Acknowledgments:
GAO Contacts:
JayEtta Z. Hecker (202) 512-2834 Steven C. Martin (202) 512-2834:
Staff Acknowledgments:
In addition to those individuals named above, Jonathan Bachman, Brandon
Haller, David Hooper, Terence Lam, Dawn Locke, Sara Ann Moessbauer,
Stan Stenersen, and Stacey Thompson made key contributions to this
report.
FOOTNOTES
[1] Last offer arbitration is a form of arbitration in which the
dispute resolution procedure limits an arbitrator to choosing the final
offer made by one of the parties.
[2] DOT defines a "major" airline as one with annual total operating
revenues in excess of $1 billion. For purposes of this report, we
include only those major carriers that were in business as of 2001 for
which we could obtain data (Alaska, America West, American,
Continental, Delta, Northwest, Southwest, TWA, United, and US Airways).
We excluded American Eagle, American Trans Air, cargo, and regional
airlines, including American Eagle, some of which fit the $1 billion
criteria, because data for these airlines were not available.
[3] DOT defines an on-time flight as one that is less than 15 minutes
after the scheduled gate arrival or gate departure time.
[4] NMB defines a craft or class as a group of employees seeking
representation grouped around factors such as their functions, duties,
responsibilities, and the general nature of the work performed.
[5] This limitation on a union's legal authority to engage in work
actions or a carrier's legal authority to change work rules is known as
"maintaining the status quo."
[6] The NMB notifies the President that a potential strike would result
in a "possible substantial interference with interstate commerce." At
the President's discretion, a board can be established to investigate
the dispute between the union and the company and make recommendations
for settlement. The recommendations are not binding on management or
labor. These boards are known as PEBs.
[7] While we measured negotiation length from the date the carriers
reported as the start of negotiations through the ratification/
settlement date, the NMB measures negotiation lengths from when it
first receives a request for mediation services. While NMB's measure
accurately reflects the period of time they are involved in
negotiations, our measure was designed to portray the total period
involved in negotiations.
[8] See appendix IV for a list of contracts ratified by their amendable
date.
[9] We were not able to calculate negotiation lengths for all 236
contracts because key dates were unavailable for 89 contracts: 83 had
unknown start dates or ratification/settlement dates, and 6 were listed
as first-time contracts.
[10] The Regional Airline Association defines code sharing as when one
airline uses the two-letter designator code of another airline to
designate its flights, for example, Comair using Delta's designator
code (DL) to designate one of its flights.
[11] The Federal Aviation Administration (FAA) Aerospace Forecasts
defines regional airlines as those carriers that provide regularly
scheduled passenger service and whose fleets are composed primarily of
aircraft having 60 seats or less.
[12] Jody Gittell, Andrew von Nordenflycht, and Thomas Kochan, "Mutual
Gains or Zero Sum? Labor Relations and Firm Performance in the Airline
Industry," Industrial and Labor Relations Review, (forthcoming), and
James Schultz and Marian Schultz, "Northwest Airlines Strike and Labor
Negotiations," American Association of Behavior Social Sciences Journal
2 (1999) 254-.
[13] Industry officials represent airline management, airline interest
groups and/or industry sponsored research organizations. Labor-
management experts include academics who study airline labor relations,
authors of studies regarding labor relations in the airline industry
and lawyers practicing airline industry labor and employment law.
[14] Jody Gittel, Andrew von Nordenflycht, and Thomas Kochan, "Mutual
Gains or Zero Sum? Labor Relations and Firm Performance in the Airline
Industry," Industrial and Labor Relations Review, (forthcoming).
[15] See appendix V for a description of airline strikes that have
occurred since deregulation.
[16] For purposes of this report, we define court-recognized, nonstrike
work actions as any labor actions, other than a strike, performed
outside of the self-help period and judged necessary by a court of law
to warrant a temporary restraining order (TRO) or an injunction. See
appendix VI for details on each of these nonstrike work actions.
[17] In the most recent airline strike--the 89-day strike at Delta
Connection carrier Comair in 2001--NMB regarded the impact as not
significant enough to warrant a presidential intervention, as they did
not believe the strike would substantially threaten to interrupt
interstate commerce to such a degree as to deprive any section of the
country essential transportation service. (The Comair strike was not
included in the list of strikes as it is not a major carrier. See
appendix II for additional limitations to the scope of this report.)
[18] The President can take various measures short of a PEB to put
pressure on the parties to settle. Such measures include sending a
presidential representative to meet with the parties. For example, in
the ALPA pilots' negotiation with Northwest in 1998, the President sent
his Senior Counsel and Transportation Secretary to meet with the
federal mediator to help the parties resolve their differences. The
President can also publicly announce his readiness to empanel a PEB.
For example, during the 2001 APFA negotiations with American, the
Transportation Secretary announced publicly that the President would
use all tools necessary to ensure there was no disruption in service.
See appendix VII for a list of presidential interventions.
[19] Slowdowns are an organized effort by workers to decrease
production in order to pressure the employer to take some desired
action. Slowdowns can include refusing to work overtime, sickouts, and
work-to-rule. A union official shared that, typically, minor FAA rules
that do not concern safety may be overlooked in order to maintain
flight schedules. According to two labor-management experts, during a
work-to-rule action, airline labor strictly follows such minor rules in
order to slow the flight schedule. For example, pilots may refuse to
fly a plane if a tray table does not stay in the upright position.
[20] According to an International Brotherhood of Teamsters (IBT) union
official, unions do not participate in nonstrike work actions, although
some might admit to performing work-to-rule actions to put pressure on
the carriers. The union official also stated that individual employees
have taken actions into their own hands. For example, IBT reported that
individual employees promoted a Northwest flight attendant sickout in
2000 by using the Internet. After IBT leadership accessed the Web site,
they told their members and the airlines that the union was not in
favor of the members' actions. In separate actions, the Seventh and
Eleventh Circuit Courts of Appeal, ruling on behalf of United and
Delta, respectively, declared that unions are responsible for
controlling labor actions. Specifically, the Eleventh Circuit Court of
Appeals held that, when Delta's pilots engaged in concerted activity in
violation of the RLA, "ALPA—ha[d] a duty to end—unlawful action" by its
members. According to the court, that duty is not met by mere
statements of policy and exhortations to refrain from unlawful
activity, but must be backed with action, including union-imposed
sanctions (Airline Management Publication).
[21] See, for example, "United Pilots' Slow Taxiing Causes Delays at
O'Hare," Chicago O'Hare Air Traffic Control, TheTracon.com, July 26,
2000, http://www.thetracon.com/news/times072600.htm, or "United
Airlines Scraps Nearly 2,000 Flights," CNN.com, August 8, 2000, http:/
/www.cnn.com/2000/TRAVEL/NEWS/08/08/united.cancellations.ap.
[22] We found studies published by Wilbur Smith Associates, Wisconsin
Department of Transportation, and the University of Cincinnati that
reported on the total economic impact of aviation on the United States,
the state of Wisconsin, and the greater Cincinnati/Northern Kentucky
region. None examined any strike impacts.
[23] In the above example, one should not equate a strike against Delta
with a 10 percent reduction in Texas' aviation benefits. Aviation
benefits stem from other aviation related activity such as general and
military aviation as well as scheduled airline service. Also, one would
have to assume that all airline flights in Texas were completely filled
with paying passengers so none of Delta's 10 percent of Texas fliers
could be accommodated by other airlines.
[24] The one exception (Melbourne, Florida) also had one-stop service
to Cincinnati, but not from a competing airline. Melbourne passengers
could still have one-stop service to Cincinnati from a combination of
another Delta regional carrier (to Atlanta) and then a Delta mainline
flight to Cincinnati.
[25] CHAOS, as practiced by the Alaska flight attendants, was found by
the federal courts to be a legal form of self-help and not an illegal
work action. The Alaska flight attendants did not engage in this
activity until after release by the NMB and the 30-day cooling-off
period.
[26] DOT defines an on-time flight as one that is less than 15 minutes
after the scheduled gate arrival or gate departure time.
[27] Flight problem complaints include complaints regarding
cancellations, delays, or any other deviations from the schedule,
whether planned or unplanned.
[28] As a measure of adverse impact on passengers, we analyzed the
number of on-time arrivals in relationship to the length of contract
negotiations. The correlation between these two items was -.25.
[29] These 23 pilot contracts were chosen because they had the most
complete information, including amendable dates and ratification dates.
Concessionary agreements ratified before the amendable date, first time
pilot contracts, or pilot contracts with missing information were not
used in this analysis.
[30] The judge fined the American pilots' union, the Allied Pilots
Association, $45.5 million for contempt.
[31] AirTran operates more flights than Continental at Atlanta
Hartsfield International Airport. However, because DOT does not
classify AirTran as a major airline, we compared Delta's operations
with Continental.
[32] American completed its purchase of TWA in April 2001, and TWA no
longer exists as a separate entity. Analysis of activity from
deregulation through April 2001 is included in this report.
[33] P.L. No. 257, 69th Cong., 1st Sess., 44 Stat. 577 (1926).
[34] 45 U.S.C. § 181.
[35] 45 U.S.C. § 152.
[36] Chicago & North Western Ry. v. UTU, 402 U.S. 570, 574 (1971).
[37] 45 U.S.C. §§ 155, 156, and 160.
[38] 45 U.S.C. § 152.
[39] 45 U.S.C. § 145.
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