
Why airlines tend to be unionized - jsc
http://philip.greenspun.com/flying/unions-and-airlines
======
jasonkester
A bit meta, but it's interesting to see how much this guy has reinvented
himself over the years. Going from running the biggest, loudest, and most
profitable software consulting firm in the world... to retiring to play with
photography and airplanes... to junior pilot at a small airline.

Some might say going from $MM/year CEO to $18k/year new guy would be a step
down, but he seems to be genuinely enjoying the ride. I especially like how he
keeps the whole "dot com millionaire" thing hidden on his aviation resume:

<http://philip.greenspun.com/narcissism/resume>

<http://philip.greenspun.com/flying/resume>

If you haven't read about the guy, it's worth picking up a copy of Founders at
Work just for his interview.

~~~
zachbeane
"Retiring" is an interesting way to describe it. He took VC money, didn't like
VC control, got into a court battle. He then settled for millions with the
VCs, while his partners got nothing out of the settlement
([http://www.assureconsulting.com/articles/arsdigitahisone.sht...](http://www.assureconsulting.com/articles/arsdigitahisone.shtml)).

It's interesting to see him slightly back in the public eye as an aircraft
nerd.

~~~
adolph
Especially as an interviewee on an NPR story about Groupon. If I remember
correctly NPR made no mention of Greenspun as having founded a seminal social
media web app, before there was language to describe it that way.

[http://www.npr.org/templates/story/story.php?storyId=1293863...](http://www.npr.org/templates/story/story.php?storyId=129386346)

------
sethg
Airlines tend to be unionized because fifty years ago, _every_ major industry
in the US was unionized. The large-scale shifts in the American economy in the
1970s and 1980s (less manufacturing, more services) accompanied changes in
law, regulations, and public opinion that made it harder to organize unions.

Senior pilots make more than junior pilots because back when the government
set routes and fares, the airlines collected higher-than-market revenues,
which they could share with the pilots. After deregulation, the industry was
no longer so profitable, and the pilots’ union compromised by protecting its
existing members’ salaries while letting new pilots make less.

------
lionhearted
This happens similarly in American professional sports. Young, incoming
players can't choose their own team - instead, they're subject to a draft, and
controlled by the team that drafted them for anywhere from 4 to 10 years.
During that time, the players make very below market money and have no
leverage. Then, after they become a free agent, they get overpaid relative to
equilibrium. The veterans that have more say in the union consistently bargain
more benefits and agree to hose the young incoming players in return.

~~~
_delirium
Sports labor markets seem pretty screwed up overall, partly because it's a
very strange market. Are teams in competition with each other? Or is the
league one entity, in competition with other leagues and even other sports?

Some other sports-employment models, broken in different ways:

1\. The owner-collusion model. A league is exempted from anti-trust laws, and
the owners get together to institute rules. There's a draft, and new players
can't be hired except via the draft. There is no free agency, or limited,
owner-supervised free agency. Basically the "market" is you either do whatever
the system tells you, or you leave the league entirely. Most new sports
leagues being set up follow this model (e.g. Major League Soccer).

2\. The contracts-ban-free-agency model. There's no draft, and you can sign
with any team you want. However, the owners have officially or unofficially
standardized on an employment contract that requires you to get your team's
permission before signing on with any other team, even after your contract
expires. Basically a noncompete clause. This is more or less how European club
football worked prior to the EU's Bosman ruling invalidating that variety of
noncompete (among other things).

------
ahi
"Union agreements and seniority-based schedule assignments lead to reduced
safety for passengers, as the least experienced workers are pushed the hardest
and get the least amount of rest. "

The reason junior officers get paid 16k a year is because there are people
willing to do the job for 16k a year. Without the unions airlines could
probably get volunteers (much like Greenspun who is certainly not doing it for
the money) to fly their planes. But then we would have every pilot
inexperienced, overworked, and underpaid.

Yes, the airlines are a mess, but he provided no evidence for his arguments.
Southwest has been consistently profitable. Why haven't the pilots eaten up
all their profits?

~~~
stcredzero
In the case of Southwest, one would think corporate culture had something to
do with it.

~~~
borism
What corporate culture? All I know is that Southwest has pilot union, they get
competitive salary and they love their airline. How come SW (or JBLU) don't
have same issues as legacy carriers?

~~~
stcredzero
Yes, Southwest pilots love their airline. Southwest convinced its pilots to
help pick up trash between flights. Also, all Southwest employees I've ever
spoken to absolutely _love_ their company. They practically gush! There's
something up with SWA's corporate culture. So much so, Herb Kelleher cited it
as a competitive advantage!

~~~
borism
Well, that still doesn't explain why pilot's union doesn't take 95% of their
profit, does it?

------
lsc
_Regardless of whether the U.S. is able to maintain its trade barriers, a
sustainable long-term structure would be a pilot-owned airline. If the pilots
are the owners there need be no conflict concerning distributing profits._

Selling the company to the union, or rather, worker-owned companies seem to be
the best case solution to the "union problem" - If my employees started
unionizing, that'd be my first shot at a solution "Hey, uh, so I hear you
don't like how I'm running the place. How 'bout you take a shot?"

Of course, the only way I've ever heard of that working is with large,
established unions, which have large established pension funds that can be
leveraged.

~~~
gaius
United (UAL) would be an example of that happens when you do that (the result
in my experience is resentful cabin crew who treat passengers as if they're
doing us a favour by allowing us aboard their personal vehicles).

~~~
lsc
eh, at least they are taking the financial hit for doing so, right? I mean if
you are going to treat me poorly, for me to keep buying tickets either you
need a monopoly or I need a discount.

------
Nitramp
This seems a bit strange.

If pilots were actually taking nearly all airline earnings, why are there
airlines at all? Running an airline requires a substantial capital investment,
and if the return on those investments is effectively zero (or much smaller
than other businesses), then there shouldn't be airlines because it's just not
a profitable business, right?

The other thing is, given the rules he outlines, an airline could drastically
reduce its costs by hiring more junior pilots and firing senior pilots. How
would they hire more junior pilots? By paying them slightly more than
competing airlines. So there should be pressure in the market to increase the
salary of junior pilots, which long term should lead to higher salaries for
juniors. This seems to contradict the authors experience.

~~~
RickHull
> then there shouldn't be airlines because it's just not a profitable
> business, right?

Hence the constant bankruptcy / bailout cycle. They are in effect subsidized
by the government. I believe American Airlines is the only legacy carrier not
to have been through bankruptcy.

------
smutticus
Always interesting to watch the American labor movement eat itself. Depressing
but interesting.

~~~
jamesaguilar
I'm fine with it. I don't care very much whether airline profits go to the
company or the employees. I don't care if pilots have to deal with an unstable
industry. As far as I'm concerned they are complicit in it by voting the way
they do in union elections. They have brought it upon themselves. (With
apologies to all the pilots that vote for saner policies -- I tend to see
large groups of strangers as single entities.)

What's important to me is airfares are incredibly low and I can fly anywhere I
want with insane convenience. And in that sense, the American labor movement
is doing exactly what I want: providing an ever-increasing quality of goods
and services for me to consume at lower and lower prices.

~~~
loewenskind
>I can fly anywhere I want with insane convenience.

At least you could before 9/11. Pre-9/11 I would have flown anywhere that was
more than 3 hours away. Now I would drive up to 10 hours to avoid flying.

~~~
jamesaguilar
It adds 15 minutes to the trip. It makes no pragmatic sense to shift your
crossover point back seven hours in response.

But I suppose if you derive some serious negative utility from security
inspections that would make sense for your personal case.

~~~
loewenskind
15 minutes? I have to arrive up to 2 hours earlier now. The security scan
itself doesn't take so long but rather everything leading up to it.

~~~
jamesaguilar
My wife arrives one hour early for domestic flights and has yet to miss one
(she travels as part of her work). I even in my anal-retentiveness about
flights rarely arrive more than an hour and a half early. So there is a good
amount of time you are leaving on the table that you could reclaim. I hope
this series of comments will help you waste less time and money driving.

~~~
loewenskind
Well, I fly into the US from outside. That entails rechecking all baggage and
going through a second security line. There are less airports you can fly into
now from the outside and all of those I've been to so far have huge lines at
the security. We now schedule in 4 hours between that initial connection and
we've still almost missed the connecting flight a few times.

------
martingordon
So why don't junior pilots form their own union? Wouldn't that introduce more
competition into the labor market and equalize (or at least rationalize) pay
between "junior" and "senior" pilots? Or is aviation one of those industries
where working your way from the bottom is celebrated?

~~~
sethg
The boundaries of a bargaining unit are set by the location of work and the
job classification. These are obviously fuzzy categories and sometimes the
National Labor Relations Board has to step in and decide which subset of
workers gets to be in a bargaining unit. However, there’s just nothing in the
law that lets workers say “OK, everyone with ten years or more seniority will
be represented by Union X, and everyone with less seniority will be
represented by Union Y, and we will negotiate separately for contracts.”

------
cheald
I think I've been working too long today. I read that headline and stared at
it for a good 10 seconds trying to figure out why on earth airlines would be
"un-ionized".

~~~
philwelch
"In his essay To Tell a Chemist (1965), Isaac Asimov [7][8][9] claimed that
one could distinguish a chemist from a non-chemist by asking a person to read
the word "unionized" aloud. With no context given, he said that a chemist will
pronounce it "un-ionized", but a non-chemist will pronounce it "union-ized"."
--Wikipedia

------
netcan
Not sure I'm convinced about this point:

 _how can we explain a 19:1 pay differential..? The answer is to look at who
controls the pilot's union: very senior pilots._

Why wouldn't the junior majority vote out the senior minority or leave the
union?

~~~
Symmetry
By the time new members get organized enough to start pushing for reforms,
they're not far away from becoming senior members. They can't leave the union
because the union doesn't want the airline to hire non-union workers.

It isn't as bad as the UAW, though, where the majority of the voters aren't
even workers any more but rather retirees.

~~~
ahi
Retirees don't vote.

~~~
Symmetry
They can't vote in certain elections, but are otherwise still full memebers.
See here: <http://www.uaw.org/node/158>

------
yardie
_who controls the pilot's union: very senior pilots._

Most airlines are made of a lot of junior pilots. Junior is a relative term
because you can be with the airline for a decade and be considered a junior.
The senior pilot making $300k is an anomaly at the airline, like the Welfare
Queen in politics. So when the airline wants to cut salaries these dozen (for
a large airline) or so senior guys, that are almost near retirement, are the
ones put on the press release as the big bad pilots. To the guy making $300k
taking a 25% paycut, its not a big deal, the guy making $16k taking a 25%
paycut, BIG fucking deal.

And just like politics, airline pilot unions don't always vote rationally.
They could vote in a system that randomizes schedule according to
availability, but they'd much rather keep the bid system. I guess its a case
of "I got mine" where the senior guys get to choose the priciest routes. And
the junior guy wants what senior has even if its costing him. Taxes on the
rich are the same, they are an easy target but the middle class don't want it
because they might be one of them one day.

I don't think you'll find a person alive willing to say I, with 25+ years, is
okay with you firing me if the junior gets to keep his job. No one wants to be
furloughed and as you get higher up in the company the stakes get higher so
don't expect this piece of union contracts to change. Not for pilots, not for
detroit, not even in the IT sector; you know, last hired first fired.

 _If airlines paid workers according to personal experience and skill rather
than seniority within their particular airline, pilots would be more likely to
live near where they worked._

Capt. Sully could stay in SF but there are more senior pilots who are just as
experienced as him, there. To move up the ladder he chose to go to NC. Hell,
even Heather Poole, FA blogger on gadling, chose to take NYC while living in
LA. Your choice is either to get experience working at a different FBO, or be
on reserve, sitting in the terminal, not getting any experience. Tough choice,
huh?

 _An airline that is successful and growing will enjoy lower costs because of
the new pilots being hired for almost nothing._

If you are referring to LCCs most are just a proving ground for pilots until
they can make it to mainline carrier. So you have cheap, inexperienced pilots
and lots of churn with the best, most experienced pilots leaving for better
conditions. I'd like to point out that LCCs like Jetblue and SWA are
anomalies. Most LCCs operate on razor thin margins and are usually just a few
months away from bankruptcy. The good ones grow the bad ones you never hear
about.

Also, for airlines the biggest expense is the plane itself. labor is such a
minuscule part of the operating budget that if they are in trouble cutting
there is just laughable excercise. The pilots, the flight crew, and the ground
crew know this. A declining airline will, in this order, cut routes, crew, and
then aircraft. With the aircraft being the 800lb gorilla in the room.

 _The author is type-rated in the Canadair Regional Jet and Cessna Citation
Mustang and has more than 3500 hours of flying experience_

Most mainlines require 5000 hours. For now, you couldn't get a job with the
big boys even if you wanted to. Anyway, when you do cross that threshold and
see things from the other seat I wonder if you'll have the same opinion. In
any case godspeed with your career.

~~~
anamax
> Also, for airlines the biggest expense is the plane itself. labor is such a
> minuscule part of the operating budget that if they are in trouble cutting
> there is just laughable excercise. The pilots, the flight crew, and the
> ground crew know this. A declining airline will, in this order, cut routes,
> crew, and then aircraft. With the aircraft being the 800lb gorilla in the
> room.

Is it expense or what's fixed vs variable?

When you cut routes, you save gas and possibly landing fees. Over time, you
save variable labor costs as well. When you layoff people, you save their
fixed costs.

When you park a plane, you still owe payments to GE capital. You still have to
do a lot of the maintenance. You probably have to pay for parking.

------
tomerico
A pilot's job is one of the easiest to replace with a computer. It is already
happening in the military. In fact, the only actual role of a pilot today is
to take off and land the plane, the rest is auto-pilot.

If the unions make it so hard to employ humans, it would only give incentive
to further develop auto pilots, and the problem will solve itself.

~~~
timthorn
Landing is typically done on autopilot these days; it is done manually to
maintain a pilot's rating or for exceptional reasons.

~~~
yardie
...and under fair weather conditions. Under more adverse conditions will be
done manually.

It's fairly easy to tell a computer, "See that line (runway slope), follow
it".

~~~
willyt
I think the autopilot follows a ILS beacon in. Isn't that why less flights are
diverted in poor weather now?
<http://en.m.wikipedia.org/wiki/Instrument_landing_system>
<http://en.m.wikipedia.org/wiki?search=Autopilot>

------
DJN
_A competent pilot union negotiator will present the airline with a plan to
transfer essentially all expected future profits into the paychecks of pilots_

and

 _...the pilots, having expected to collect 95 percent of the airline's
profits, will in fact be entitled to 115 percent..._

WTF! Did the pilots think about the poor entrepreneurs and shareholders who
own the business?

More reason why labour should be fungible. Some unions really rile me up.

------
nhebb
"the FAA will not allow this because those replacement pilots, though
competent with the airplane, do not have experience with the _specific
operating rules of the airline_ "

Then why don't the airlines standardize their operating rules?

~~~
gaius
The unions would see that as management imposing a change in working practices
and go on strike.

Remember, the current system favours the unions.

------
tzs
Odd. I would have thought with the time that they spend at high altitude, and
the corresponding above average exposure to radiation, that they would tend to
be more likely to be ionized.

