July 16 - US Airline Jobs: Do You Believe The US DOT Or The US Big 3 CEOs?


INDUSTRY ANALYSIS

By Kevin Mitchell

In a recent US Today op-ed, the CEOs of Delta Air Lines, American Airlines and United Airlines (Big 3) again claim the sky is falling for US aviation industry workers. As their narrative goes, allegedly unfair competitive practices by Emirates Airline, Etihad Airways and Qatar Airways (Gulf Carriers) are an existential threat to US airline employees that already has manifested in massive job losses.

Cynically believing that the Trump Administration has a Pavlovian policy reaction whenever it hears the word “jobs,” the Big 3 are counting on the Administration to ignore its own data which show the diametrically opposite to be true. In fact, US airline employment is soaring, not declining. In a word, the Big 3’s assumption that the Administration would ignore its own statistics and cavalierly sweep aside nearly 30 years of Open Skies policy, based solely on political advocacy, is disrespectful.

The US Department of Transportation’s (DOT) Bureau of Transportation Statistics (BTS) tracks monthly US airline jobs. Its data is well respected and BTS has a sterling reputation for independence. Given that BTS has no dog in this public-policy fight, its numbers deservedly should be considered conclusive.

So, what do BTS’s independent statistics show? Is competition with the Gulf Carriers killing US airline industry jobs and causing the Big 3 to shed employees as Ed Bastian of Delta, Doug Parker of American and Oscar Munoz of United claim?

The short answer is no. In fact, the exact opposite is true, and with several exclamation points. US airline employment is booming. This hiring spree accelerated just around the time in 2015 that the Big 3 formally lodged their anti-Open Skies/anti-Gulf Carrier concerns with the Obama Administration, and when the Big 3 started to disingenuously say the exact opposite.

Facts are stubborn things. According to BTS’s May 2019 airline employment report, its most recent publicly available one, US major airlines, those with more than $1 billion in annual revenue, had a total of 704,294 workers compared to just 560,361 in January 2015.

In other words, since the Big 3 formally launched their anti-competitive campaign against Gulf Carriers, US major airline employment has soared by 143,933 workers or 26 percent! 

So what about the existential job loss threat that is the centerpiece of the Big 3 CEOs USA Today op-ed? It is demonstrably false. Bogus. Political fiction. Should you believe the BTS data or the oligopolistic CEOs at Delta, American and United? That answer is obvious. 

Could it be that despite this massive US airline industry job growth, perhaps employment is nonetheless falling at the Big 3? After all, the Big 3 CEOs wouldn’t knowingly put their names and the reputations of their airlines behind blatantly false claims easily rebutted by publicly available DOT data, would they?

That explanation also does not hold water. According to BTS, employment at Delta, American and United is up significantly since the January 2015 launch of the Big 3’s multi-million dollar lobbying campaign against Open Skies and consumer choice. Between January 2015 and May 2019, BTS data show Delta added 9,516 employees (11.8 percent growth), American’s workforce grew by 9,347 workers (9.5 percent growth) and United hired an additional 6,582 employees (7.8 percent growth).

Truthfulness has never been a touchstone for the Big 3 in their anti-Open Skies lobbying campaign, or with their employees. Their job loss argument dramatically underscores that reality.

If the Big 3 CEOs genuinely care about aviation-related US jobs, they could do something to buoy them by the tens of thousands by purchasing Boeing’s new generation 777X aircraft that is scheduled to begin commercial operations next year. Between direct and indirect US manufacturing jobs, as well as employment at nationwide supplier vendors, including many small businesses, the 777X program will create and support hundreds of thousands of US jobs. 

However, and tellingly, to date, neither Delta, American nor United - who claim to be great champions for American jobs - has purchased a single job-creating Boeing 777X. What about purported US job-killing Gulf Carriers? They have purchased 235 of the 344 777Xs sold to date (68 percent). Without the Gulf Carriers, the Boeing 777X program would not have gotten off the ground, and the hundreds of thousands of US jobs it will create and support would have been lost.  

So, next time you hear Messrs Bastian, Parker and Munoz contend the much needed competitive choice Gulf Carriers provide is an existential threat to US airline jobs, ask them why DOT’s BTS data tells the exact opposite story. Also ask them if they care so much about creating and sustaining US jobs, why have they turned their backs on Boeing’s 777X workforce and its nationwide supply chain? While you are at it, also ask Mr. Bastian why Delta, adding insult to injury, anointed its European manufactured Airbus A350, a head-to-head competitor to the 777X, as its flagship airplane.

And finally, ask them why they outsource good flight deck and cabin crew jobs to joint venture partners and why they venue-shop middle class aircraft maintenance jobs to countries where non-certificated mechanics can earn as little as $2.00 per hour! They won’t answer you, but the evidence shows and the truth is that these CEOs care about only one thing when it comes to jobs, and it’s not their employees’ job.

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