August 22 - US Airline Labor Leaders Now Realizing True Threat To Jobs Is Not Gulf Carriers


INDUSTRY ANALYSIS

By Kevin Mitchell

 

Delta, American and United are accelerating the offshoring of middle-class crew and maintenance jobs

Delta Air Lines, American Airlines and United Airlines (Big 3) needed a boogeyman and The Big Lie to divert attention from their accelerating practice of offshoring US airlines jobs. They badly needed to distract their unions and workforces from the profit-maximizing business strategy they were aggressively implementing to offshore as many quality US airline jobs as possible.

So, the Big 3 concocted the fiction that Emirates Airline, Etihad Airways and Qatar Airways (Gulf Carriers) are an existential threat to US airline industry jobs. According to the Big 3, it is those foreign carriers that represent the boogeyman. Delta produced a Grim Reaper “education” video for its employees warning that the Gulf Carriers are coming to take their jobs.

The Big 3 have spent millions of shareholder dollars pushing this false narrative to promote their anti-Gulf Carrier protectionist agenda to dismantle the pro-competition, pro-consumer and pro-worker Open Skies policy and to diminish attention from their own rampant practice of sending good American jobs overseas. Open Skies agreements are predicated upon airline new entry to achieve affordable prices for consumers and a greater number of international flying jobs for workers due to expanding markets.  

For years, the Big 3’s disinformation campaign worked. Fueled by those shareholder dollars spent on a grossly deceptive public relations operation, the often and loudly shouted false narrative took on an aura of fact.

However, the reality was the total opposite of the Big 3’s storyline. Instead of adding US-crewed international flights, the Big 3 were executing their strategy to offshore most of their new international flying opportunities to their foreign airline alliance and joint venture airline partners, and their non-US crews.

Rather than have safety-critical maintenance and repair work done on US soil, those airlines increasingly outsourced that work to foreign repair stations and their non-US workers who perform work to different standards than US FAA-certificated mechanics and who sometimes need to look at pictures in the Boeing and Airbus manuals because they cannot read English.

Nonetheless, the Big 3’s CEOs disingenuously cast themselves as the great warrior-defenders of US airline jobs purportedly under attack by Gulf Carrier competition. According to them, when it comes to US airline jobs, the Gulf Carriers are the supervillains and US airline workers have no more faithful superheroes to protect them than their CEOs.

Importantly and purposefully, the Big 3 misled many US airline labor leaders. However, finally, some of those leaders are speaking up because they know that the true threat to US airline industry jobs comes not from robust competition, but rather, from C-suite executives at Delta, American and United and their profit-maximizing zeal to offshore as many great American jobs as possible.

One of these labor leaders is John Samuelsen, the International President of the Transport Workers Union of America, AFL CIO. Earlier this month Mr. Samuelsen wrote to President Trump blasting the hypocrisy of the Big 3 scapegoating Gulf Carriers as a threat to US jobs when, in fact, the Big 3 are the ones sending thousands of US crew and maintenance jobs overseas.

Mr. Samuelsen wrote:

“Recently, you hosted a meeting in which the CEOs of the biggest U.S. airlines begged for your help in their competition with the state-sponsored Middle East carriers. At the very moment these airlines are asking for you to shield them from foreign competition they are actively working to offshore as many U.S.-based jobs as they possibly can, exposing American workers to unfair competition, and possibly harming American air travelers. It’s laughable that these job-exporting CEOs would cite a risk to U.S. jobs to support their position. This anti-worker business scheme is un-American and totally hypocritical.”

Describing Ed Bastian of Delta, Doug Parker of American and Oscar Munoz of United as “double-talking CEOs,” Mr. Samuelsen added:

“The very same CEOs who are worried about losing routes to foreign competition have no qualms about putting their workers on the street as they move aircraft maintenance overseas. In the past 15 years, these airlines have more than tripled the percentage of maintenance work performed outside of the U.S. and cost our economy more than 8,200 good-paying, middle class jobs in the process.”

The Big 3 have been running a PR hypocrisy fog machine for over four years. Kudos to Mr. Samuelsen for seeing through it. Other leading labor leaders have yet to pierce the veil of deceit.

Captain Ryan Schnitzler, the Chairman of Delta’s Master Executive Council of the Air Line Pilots Association International (Delta MEC), is another labor leader who recognizes that the threat to US airline industry jobs comes from within - in the case of his members, the Delta C-suite, not an outside fabricated boogeyman such as the Gulf Carriers.

Delta MEC’s recent US Department of Transportation (DOT) filing may have caught many off-guard. After all, DOT had just tentatively approved Delta’s application to merge its separate joint ventures (JVs) with Virgin Atlantic Airlines, and Air France and KLM, into a single monster joint venture that poses an even greater threat to US-Europe competition and consumer choice. A time to celebrate, right? Not for Captain Schnitzler and the Delta pilots he represents. They filed objections asking DOT to imposed expanded conditions on their own airline’s final approval.

The concern of Delta pilots: offshoring US pilot jobs. The DOT filing exposed the underbelly of the Delta-Virgin Atlantic JV. While good for corporate profits and Virgin Atlantic crew job creation, it has been a dark day for Delta pilots and other Delta crew.

The Delta MEC noted:

“Nearly six years later [since the joint venture went into effect], the promised growth in US-UK services has accrued almost exclusively to Virgin, and the promised US job and career opportunities predicated on Delta operational expansion in that market have failed to materialize. In fact, Delta-operated flying in the critical New York-London market has actually decreased since the Delta-Virgin joint went into effect.”

The Delta MEC relied on hard facts to support its concern that, left to its own devices, Delta management will seek to emulate the job offshoring experience of the Delta-Virgin Atlantic joint venture in the new combined mega joint venture.

The Delta MEC told DOT:

“Virgin’s total block hours in 2018 between the US and the UK increased 33% over those flown in 2013, the year before the Delta-Virgin joint venture went into effect. Over the same period of time, Delta’s US-UK block hours have increased by just 2%. Moreover, as shown in Figure 2, below, Delta’s total scheduled frequencies between the US and London Heathrow (LHR) have increased only marginally under the joint venture, from 6,341 in 2013 to 6,492 in 2018. In contrast, Virgin’s total scheduled LHR-US operations grew from 8,174 frequencies in 2013 to 11,453 frequencies in 2018.”

That’s a .02 percent increase for Delta and an amazing 40 percent increase in frequencies for Virgin! Now that we understand those facts, Captain Schnitzler had no choice but to file with DOT to safeguard his members’ interests as Delta royally screwed them out of lucrative international flying opportunities. 

But isn’t Mr. Bastian, the CEO of Delta, the biggest self-professed champion of US airline workers? Judge Mr. Bastian by his actions, not his flowery nationalist words intended to pander to the Trump Administration. Nevertheless, to Mr. Bastian’s credit, unlike Mr. Parker and Mr. Munoz, he didn’t look President Trump in the eyes and repeat the Big 3’s shameful and patently false US jobs narrative - The Big Lie. Granted, it wasn’t pangs of conscience that prevented Mr. Bastian from doing so. He went on vacation rather than attend the White House Oval Office meeting.

The Delta MEC obliterated the myth that Delta is the champion of US jobs by summing it up to DOT this way:

“This use of the JV mechanism to effectively outsource Delta flying to a foreign carrier whose flight crews work under substantially less favorable wages and work rules is fundamentally inconsistent with the Department’s public interest objectives of strengthening the competitive position of US air carriers relative to foreign air carriers, and encouraging fair wages and working conditions.”

The Delta MEC is seeking safeguarding-conditions to ensure that future international flight growth, and resulting crew opportunities, are equitably distributed between Delta and its foreign partners, unlike the Delta-Virgin Atlantic experience to date. In other words, the Delta MEC does not trust Delta management to do the right thing for US workers on its own initiative given its profit-maximizing penchant to offshore new flying opportunities to foreign-crewed partner airlines. It is seeking DOT’s intervention to force Delta management to do so.

Yes, there is a real threat to US airline jobs. Except, it isn’t from abroad. And, it certainly is not posed by Gulf Carriers. It is located in the C-suites at Delta, United and American headquarters where the outsourcers and offshorers-in-chief reside.

Hopefully, soon all aviation industry labor leaders will join Mr. Samuelsen and Captain Schnitzler in recognizing this home-grown threat and similarly fight for what’s in the best economic interest of their members and best safety interest of consumers.

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