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Collective Bargaining at Pelican Airlines: A Union Perspective

Essay by   •  December 8, 2013  •  Case Study  •  6,616 Words (27 Pages)  •  1,408 Views

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Collective Bargaining at Pelican Airlines: A Union Perspective (A)

History of Pelican Airlines

Pelican Airlines (PA) began operations in 1990, serving 2 cities, and grew to serve 18 cities by 2000. Blue Heron Airlines (BHA) began in 1990 with service to 4 cities and grew to serve 12 cities by 2000. In January 2000, Pelican Airlines purchased Blue Heron Airlines and merged the two operations. The joining of these two regional airlines created a small "national" airline (defined as a carrier with sales between $100 million and $1 billion) with sales of $140,265,000 in 2011. Even so, the firm competed primarily in only one region of the country, and managers constantly compared it to other large regional airlines.

In May 2001, Pelican Air entered into a marketing agreement with a major national carrier and became a "feeder" airline for that carrier (e.g., American Eagle is a feeder airline for American Airlines, United Express is a feeder for United Airlines). That is, PA delivered passengers from small airports to larger ones, where passengers could make connections using that airline. Subsequently, no more reservations were given to the public as Pelican Air; passengers believed that they bought tickets for the major carrier. The company also repainted all aircraft to make the public believe Pelican Air was part of the major carrier.

Prior to 2002, the flight attendants at neither company were unionized. However, both PA and BHA flight attendants worried about what they perceived as the arbitrary way that PA management resolved personnel issues such as merging seniority lists. Such fears led several workers to contact the Flight Attendants Organization (FAO), a union whose membership consisted solely of flight attendants. Despite opposition to unionization from Pelican Airlines, the FAO won a union certification election with 84 percent of the vote.

Previous Contract Negotiations

Negotiations for the first PA-FAO contract began in September 2002, and negotiators from both sides cooperated effectively. The committee borrowed language form other airline contracts (e.g., United Airlines). The committee also incorporated the past practices and working conditions that were used in Blue Heron Airlines. These rules had not been written down but had been mutually acceptable past practices. Negotiators signed the final contract in August 2003. The contract was effective until August 2008.

Negotiations for the second contract also went smoothly. In terms of contract provisions, the second contract was basically an extension of the first, with a modest pay increase and one additional paid holiday. The agreement was effective until August 31, 2013.

What follows is a synopsis of the 2013 contract negotiations from a union negotiator's perspective.

Flight Attendants Organization (FAO) Negotiating Team

Whenever an FAO carrier began negotiations, the National Office of FAO sent a national bargaining representative (NBR) to the scene. Shirley Dixon, the NBR assigned to the PA negotiations, met with the flight attendants' Supervisory Executive Counsel (SEC) to select a negotiating team. The negotiating team prepared for negotiations and conducted the actual bargaining sessions. Once at the table, Shirley spoke for the committee. Using an NBR as the spokesperson lessened the likelihood that a flight attendant who was emotionally involved with an issue might say something inappropriate while trying to negotiate. Shirley had 14 years' experience and had also assisted with the 2008 PA contract negotiations. Although Shirley was the spokesperson, the negotiating team was formally chaired by Esther Rogers, FAO SEC president at Pelican Airlines. Other members of the team included local FAO union presidents Peggy Pike, Marie Hardy, and Jody Phillips.

Determining the Union's Bargaining Objectives

The FAO negotiating committee members first identified their bargaining objectives. For the 2013 contract, the FAO negotiating committee devised an opening offer based on the average working conditions and wage rates for flight attendants offered by other, similarly sized carriers. They looked at wage, unemployment, and cost-of-living data from government sources such as the Monthly Labor Review. The committee members knew the financial history of PA and kept their proposals within financial reach of the company. They also used other employee groups (e.g., pilots, mechanics) within PA as a guide - many of the FAO proposals were items that these other unions already had in their contracts. The FAO negotiating committee hoped to bring wages and work rules in line with the company's financial performance and industry standards (see Table 1). Finally, they looked at past grievances and arbitration cases to determine if contract wording needed changes.

Table 1: 2007-2008 Regional Airline Industry Comparisons

Airline Starting Wage/Hour Days off per Month Duty Rig* as Airline (percentage of time)

C $24.54 12 62%

A $24.10 12 60%

B $21.49 11 none

E $21.23 13 33%

D $20.10 10 none

Pelican Airlines

$19.50 10 none

*Duty Rig is a pay calculation that is a certain percentage of the period of time which a flight attendant is on duty with the company. Duty time normally begins 45 minutes prior to the first scheduled trip departure time and ends 15 minutes after final arrival time at the end of the day.

Committee members also considered the wishes of the rank-and-file members. To do this, the committee mailed a survey to the 115 FAO members asking questions regarding wages, working conditions, and issues of concern to flight attendants. They received a 75 percent response rate; results are shown in Table 2.

After tallying the responses, negotiating team members discovered that the flight attendants' major concern was wage determination. PA currently paid flight attendants for the time they were in the aircraft with it moving under its own power - they were not paid for the time spent sitting in airports waiting for flights. Union members wanted PA to implement duty rigs. A duty rig paid the attendant a fixed percentage of the period of time he or she was on duty with the company.

For example, suppose an attendant worked a 15-hour day, but worked in moving aircraft for only six hours. Under the current system, PA paid wages for six

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