Airline workers focus on future
By Barbara De Lollis and Chris Woodyard
USA Today
Brian Jansen hopes his longtime employer, US Airways, can pull out of bankruptcy protection again. But just in case, he has taken out a little insurance policy on his future — a second job.
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The 41-year-old airplane cleaner in Charlotte moonlights as a FedEx package deliverer. He has to work twice as long to make the same money — about $45,000 a year — that he earned before US Airways cut his pay. But at least he knows he has a job, with health insurance, that he can fall back on if his airline falls apart in bankruptcy proceedings.
Workers at United Airlines and the five other big carriers are dealing with a harsh reality as the airlines cut jobs and slash workers' pay and benefits in an effort to trim losses. Many are forced to get second jobs.
The six old warhorses of the airline industry — American, United, Delta, Northwest, Continental and US Airways — are undergoing radical transformations as their customers flock to low-cost carriers such as Southwest and JetBlue. Since 2000, their last profitable year, the airlines once known as the Big Six have shed 109,000 jobs, cut nearly a quarter of their seats, and chopped workers' pay and benefits in a desperate attempt to stem losses of $28 billion over the past 3 1/2 years.
It's hardly helped. Two carriers, United and US Airways, are operating in bankruptcy protection, and others could follow soon, with more losses expected. A glamorous industry that once provided secure, sought-after jobs is evaporating, leaving behind heartache, uncertainty and downsized expectations.
Hedging bets
Jansen is one of many U.S. airline workers who are taking second jobs, launching side businesses or heading back to school. They're hedging against the economic turmoil that grips the airline industry. Their first love may be aviation, but they say they now need to be realistic about their futures.
"I thought it would be a means to an end until US Air got back on its feet," Jansen says of his delivery job. "But now, going through a second bankruptcy, it's beginning to look like that might be where I have to retire from."
Historically, unionized airline workers tended to stay at one carrier until retirement. It's still common to find people with 30 or more years with their airline. Switching made no sense under union rules. It meant forgoing the perks that seniority earns: fatter paychecks, better schedules and vacation time, generous pensions and job protection.
But the grim reality of the industry's losses — $5 billion expected this year — and the airlines' push to get more work from fewer people for less pay is prompting workers in their peak earning years to abandon hope of an airport retirement party.
"Anybody who has not been thinking about their future has probably been hiding in a hole," says Richard Chaifetz, CEO of ComPsych in Chicago, an employee-counseling provider dealing with a rising tide of unhappy airline workers.
No relief in sight
How many more jobs may disappear depends on hard-to-predict factors such as fuel prices, says Michael Allen of industry consulting firm Back Aviation Solutions.
Once offering the best-paying jobs in the industry, most of the old-line airlines have been seeking — or making — significant pay cuts to bring costs in line with the discounters'.
Recently, a bankruptcy judge gave US Airways permission to impose emergency pay cuts of 21 percent while acknowledging that it may lead to home foreclosures and personal bankruptcies.
That follows two rounds of pay concessions by workers during an earlier US Airways bankruptcy filing.
United, American and Delta have also cut wages, though to a lesser extent. Northwest is seeking a first round of cuts. Continental CEO Gordon Bethune said for the first time that the airline is considering asking for concessions.
The carriers in bankruptcy protection are also threatening pensions. United and US Airways have already skipped pension-fund payments and signaled intent to freeze or terminate their plans. If either goes ahead with the proposals, pressure builds on competitors to follow.
If carriers eliminate traditional pensions, they would be taken over by the Pension Benefit Guaranty Corp., the government agency that insures private traditional pensions. The PBGC caps yearly payments to workers who retire at 65 at about $44,000. Pilots would collect less than $29,000, because they retire at 60 — a fraction of the $110,000 that some senior pilots now expect from their traditional plans.
The toll on workers
In the past when a big airline such as Pan Am, Braniff or Eastern shut down, other airlines were healthy enough to absorb many of their workers. But if one goes out of business now, moving to another big carrier would be impossible.
"I'm 55. I really can't go to another airline and start over again in the lifestyle of a 20-year-old. I don't have the stamina," says United flight attendant Dale Cassady of Arlington, Va. Cassady has flown for United for 31 years under nine CEOs.
Other issues that are making this period tougher:
• Record furloughs. Few workers furloughed after the Sept. 11 attacks have been recalled. The Air Line Pilots Association says fewer than 28 percent of its 10,750 members furloughed since Sept. 11 have been recalled. If US Airways or another big carrier shuts down, the workers seeking a job with another big carrier would get in a long line of workers awaiting recall.
• Older workers. The first wave of workers let go after Sept. 11 were mostly younger. They had little seniority and worked at lower pay rates. Now, for instance, US Airways' average flight attendant has 19 years on the job, nearly three times the tenure of the average private-sector worker in the United States.
The people who have held on tend to have higher expectations and greater financial commitments. These experienced workers are paying for braces, college and homes. Some will retire soon.
• Fewer high-paying jobs. It's going to be a lot harder to make $300,000 a year flying an airplane, as the most veteran pilots flying international routes on jumbo jets can do today. At discounters such as Southwest, which is adding planes and continuing to hire, starting pilots make about $45,000. They top out at about $200,000.
The biggest opportunities are at regional carriers and at discounters, where pay is lower but benefits can be greater. Newer airlines pay less. At JetBlue, which launched in 2000, the most veteran pilots make about $120,000 a year.
For pilots, second careers are nothing new; federal law requires that they retire at 60. Working about 16 days a month, pilots with second jobs have been the norm. But now Jim Stainbrook of Columbus, Ohio, an investment adviser for pilots, says more are returning to college, anticipating earlier retirements and smaller pensions.
Even workers who landed posts at upstart JetBlue, what appears to be one of the most secure airlines, remain cautious.
Brian Nastovski, a pilot furloughed from American after Sept. 11, joined JetBlue in January. Yet he's keeping his exotic-animal taxidermy business going until he gains more seniority.
