More Thoughts On Pilot Seniority

Recently, Bob Lavender, an active Fed Ex pilot sent us his opinion on the effect of pilotseniority on the airline industry. Bob Rioux, a retired Delta pilot then shared his response. This is the latest in the discussion:(Bob Rioux's comments in red)

Seniority, Fairness, and Pilot Union Failure Robert J. LavenderMuch has been written about pilot unions and the seeming inability of their members to get along these days. Of particular note has been the recent attempt by units of the Air Line Pilots Association (ALPA) at Delta and Northwest Airlines to integrate their seniority lists and facilitate a merger between their two companies. The Associated Press reported that pilots have not been able to agree to how seniority for the 12,000 pilots would work under a combined carrier.¹ In similar fashion, the recent effort at US Airways to decertify ALPA and replace it with an independent union was driven by the quest for seniority position as its pilots and those from America West Airlines furiously clashed over how to consolidate their members. During that campaign, many pilots sported lanyards stating “Seniority Matters." Indeed, seniority matters so much to pilots that it trumps and clouds business decisions that could otherwise be in their long-term best interest. As a 30-year airline pilot, I can testify that seniority is the force behind almost all of the internal competition that turns pilots—union “brethren," if you will—into enemies.Underlined above is a very good definition of the “seniority” problem in existence today. I lay most of the blame on ALPA’s lack of action over the years to develop solutions amongst pilot groups to fix the problems. The situation is simple to understand: In the pilot culture, seniority rules. The statement is partially true. If it truly ruled (including mergers) then many of the problems would not exist. To make it accurate, what Robert should have said is, “In the pilot profession, seniority rules, unless your talking about a merger or acquisition then we try to take away someone’s earned seniority. “ Senior pilots (that is, those who were hired first), have historically enjoyed the best of everything including the highest pay, the first choice of cockpit position and trips, and, overall, the best quality of life. These are not petty matters. This is true and is the result of acquiring years of service, but what Robert fails to mention is the benefits of seniority eventually come to “all” on the seniority list equally. At FedEx, for instance, differentials in cash compensation alone can be more than $150,000.00 per year between senior and junior pilots. Unfortunately, in the open market, a difference in value of this magnitude among similarly-skilled providers of service always invites competition. If one can imagine the competitive response that would occur if an airline company tried to justify higher ticket prices based on its date of incorporation, one can understand the pilot problem. Robert is mixing apple & oranges. Neither has anything to do with each other.The question is: Why is "seniority," a concept of limited importance to most unions, so enormous to pilots, and what can be done to stop the friction that it causes? The answer to Robert’s question is simple: First seniority is important to pilots on a monthly basis and in merger scenarios, and the “friction” he speaks of comes about when one group tries to take away the seniority from another group. The pilot notion of seniority "rights" is a holdover from the period in which airlines and their employees were highly regulated and protected from natural economic forces by the federal government. During this period of “Regulation," there were few if any airline failures, hence, employees, including pilots, all had the same career expectation: You got hired when you were young, you worked at one company for thirty years, and, you retired with money in the bank. The fact that you made a ridiculously low wage as a new-hire was worth ignoring because you made it up on the back end when you became senior. In that protected environment, the captain’s position coincidentally became the anchor for determining pay. The internal system by which pilots valued each other became known as the “seniority system," and it worked adequately for decades under those stable conditions. From a pilots perspective, De-Regulation has absolutely nothing to do with seniority. Robert is trying to say things are different now and should be changed. I couldn’t disagree more…. Changing the seniority system is the very cause of the problems we have today. ALPA should have spent the last 25 years formulating a standard, acceptable merger policy that did two things: First, protect individuals “earned seniority”, second, while providing corporate management a method to combine two pilot groups on a common list so they can get on with running their business. Neither of these things have happened. Everything changed, though, with passage of the Airline Deregulation Act of 1978. The express purpose of this law was to create competition within the airline industry—and it did exactly that, not only among companies but among pilots as well. When companies such as Braniff failed, their pilots found themselves looking for employment. Sadly, the system that worked fine under government control did not function well at all when 40 and 50 year-olds with kids in college were faced with starting over in union jobs paying $1300.00 per month. So, when Continental pilots went on strike in 1983, 450 Braniff pilots crossed their picket line. Why? Because they could make two and a half times more money there than they could at a union carrier. Yes, they had to “steal" their seniority from striking pilots, but the financial incentive was too great to ignore. They had the skills and the motivation; all they needed was the opportunity. In failing to adjust to the reality of the “free market," union officials left their members wide open to this form of competition. What Robert describes in the above paragraph is a sad tale. Because we had a “spineless” poorly managed national union, there was little to no response to the debacle that took place at Continental. It was “union busting at its best” and both ALPA and the total membership was not willing to take on the issue. I don’t know what else to say about “union busting”.The same exact economic forces that affected pilots in 1983 are in play today as pilots jockey for merged seniority position and the pay and lifestyle that go along with it. Even though the adage, “You only have to be junior once" has not been true for decades, pilots still act as though it is. Remarkably, thirty years after the airline world was rocked, pilots are still doing business among themselves the old way. Part of the problem is that pilots ignore the fact that seniority is a political system, not an economic one. No Robert, the pilots seniority system has become a political system and was designed originally to be be an economic one. Throughout the commercial world, it exists almost exclusively to protect against management favoritism and it means mostly one thing: First-hired, last fired. In some union environments, it doesn’t even mean that. In the National Football League, for instance, if the rookie draws the bigger crowd, he gets the job. Likewise, if a member of the electricians union were to demand grossly higher wages simply because he received his electrician license first, he would be seen as greedy and there would be open warfare…exactly as there is among pilots. There is no logical correlation between pilots on a seniority list with a corporation and the NFL, but you could safely compare electricians that work for a large construction corporation in New York City as a similar example. Airline managers appear to love this system—it generates so much competition and distraction among pilots that it prohibits them from competing effectively with the corporate establishment. Whereas, airline mergers should have resulted in larger and stronger pilots groups, they have become larger and weaker. The proof is in the pudding: Pilots have been unable to pull off one meaningful job action in years, even when faced with the reduction and loss of their most precious assets: cash compensation, work rules, and pension funds. This paragraph is absolutely “spot on”. We, the pilots and ALPA have been maneuvered into the current situation and should recognize the forces that separate and divide unity and purpose. In this writer’s opinion, “seniority," as currently employed by pilots, causes gross disharmony within the ranks of union members. I can’t agree with the “cause” of the disharmony you speak of. It’s the stolen, or lost seniority that causes the problem. If each person’s “earned seniority” was respected, protected, in mergers and acquisitions the “disharmony” you speak of would be nil. Remember the seniority system is working very well on a monthly basis at each individual company. Pilots bid for and are awarded schedules, vacations, pay, etc using the seniority each pilot has. Unity does not fall from trees in the open market; it must be created through economic incentives. If pilots desire to reduce internal competition, enhance their ability to compete with corporate strategists, and eliminate problems associated with seniority list integration, they must reduce compensation differentials to levels that are economically fair to everyone. The perception of fairness is the primary factor in incentivizing unified behavior. This is not to suggest that everyone get paid the same; it is to say that differences cannot be based on non-economic concepts such as date-of-hire or the condescending attitude that “You are junior, so you must suffer." They must be based on sound economic reasoning including the law of supply and demand. If, for instance, there is less demand to fly at night (“redeye" flying), then pilots who do it must receive greater compensation (i.e., pay, vacation time, etc.) for their trouble. This kind of logic may be applied in dozens of ways to create a sense of fairness that does not now exist within the piloting profession. Robert still doesn’t see the current system as being fair. Within each company all pilots will grow into more senior positions in both, equipment flown and pay if you don’t screw with “seniority”. I don’t know of any other method that would work better without hurting someone. The upside to leveling the economic playing field among pilots is significant. For instance, if pay were front-end, rather than back-end, “loaded," pilots would have the same average career earnings as they have now, but they would also: 1. Enjoy an improved tax consequence; 2. Earn more compounded interest on more savings for more years; 3. Reduce internal competition for seat position; and, 4. Eliminate the need for a “national seniority list" (because they could start over at a new job with a living wage). Not one of these advantages is currently available to any union pilot. Robert simply wants to reverse the pay scales from back end to front end improvements. Pilots pay should not be changed to accommodate a pilot not working or leaving a job. It should be pay for “doing a job”. I can’t see how some of Robert’s ideas could ever be adopted. For example how could you ever get those that are currently half way, or more through their career to agree to eliminating their current higher pay potential for a higher paid front end program?

It is common knowledge that the Labor movement has collapsed in this country. Unions now represent only 7.5% of the private workforce, and pilots, in particular, appear to be in a failure mode. Competition among them has been so intense for so long that they no longer trust each other on economic matters. After years of leadership neglect, it is clear that unions possess neither the skills nor the tools required to create professional harmony. Fortunately, there are those who do possess the needed expertise and they are willing to help. Tens of thousands of for-profit and not-for-profit organizations around the world have employed Organizational Behavior techniques with great success in bringing workers together. If pilots wish to relieve their internal distress, they must take advantage of this expertise and devise logical market-based strategies for competing wisely in today’s world. If they continue to follow the traditional union economic model, they should plan on achieving traditional results: Disunity, weakness, and management exploitation. Such are the components of union failure. I agree the pilots union has become an albatross. ALPA is nothing more than a large Washington, DC based political organization that no longer represents its membership. That’s where pilot problems over seniority issues dealing with merging companies should have been be, and could have been resolved. But, no ALPA has done nothing since deregulation but play in Washington.

Some additional thoughts from Bob Lavender:
Dear Editor,
Just a couple of follow-up notes to my article "Seniority and Fairness and Pilot Union Failure":
1. No one is saying that Seniority should not exist. It works fine as a "political" tool to protect against management favoritism. But it has no place as an "economic" tool because there is no economic basis to it. It simply refers to whoever got the job first, not who is more skilled, experienced, or whose talents are more "scarce."
Here is an example of what I mean: Although they both hold medical degrees, the most junior neurosurgeon earns far more income than the most senior family practitioner. The economic basis for that differential is that the neurosurgeon possesses skills that are more scarce. There is no competition between the two for the higher salary because the family doctor does not possess the skills to compete for it. Unlike doctors, virtually all airline pilots possess a similar skill set. Thus, even the most junior pilot can compete for the senior position. That is exactly what is going on now among pilots.
The premise that seniority "is the way promotions and pay grades are usually handed out in most other non-airline businesses" is faulty. In virtually the entire commercial world, compensation and pricing are a function of the law of supply and demand and scarcity. If your skill set is not sufficiently unique, you cannot demand higher wages than your similarly-skilled counterpart without incurring competition. No amount of begging for "Unity" by union officials can trump the economic incentive to assume the senior position.
2. Many pilots continue to look at things from the pilot perspective rather from the executive perspective. While pilots continue to value each other on the basis of seniority and the highest pay among them, executives value pilots on the basis of the lowest pay; that is, who will work for the least. Seniority means nothing to corporate executives. They know that in the span of a few weeks they can train the most junior pilot on the list to do the job of the most senior. (Truthfully, pilots know this too and that is why they are unwilling to take a meaningful job action of any kind on any matter. They simply have too much to lose by leaving their seats and the junior pilots have too much to lose by not taking them.)
In the free market, it is the lowest cost provider of service that drives the market and determines value and pricing. The pilots, themselves, telegraph to executives what they are worth by virtue of their lowest paid wage earner, not the highest. Until the bottom end salaries on any seniority list rise to closely resemble those at the top, executives will continue to have the leverage they need to drive salaries down. From the executive perspective, "junior pilots rule."
To drive intra-profession competition from their "marketplace," pilots must eliminate the enormous differentials in compensation that exist across the spectrum of any seniority list. This will go a long way in creating true economic unity.
Bob Lavender
And another 2 cents worth from Bob Rioux:

Robert Lavenders article continues to fascinate me. He just doesn't have the

understanding of 70+ years of experience of pilot/union development. This

"new era" of non-seniority might just come to pass if conditions are right.

I am not happy in any way with ALPA, but all pilots need to wake up.

One of the most basic conclusions he makes is the "seniority list" is part of

the problem. What he fails to see is the seniority list, when accepted as

part of a working agreement by a corporation, blocks that corporation from

going out and hiring and using any pilot off the street it chooses. By

management agreeing to a union work rule contract we wind up with

job security for individuals who took years of work, training, experience,

sacrifice, etc., just to get hired.

Like the NFL, we are the players and are entitled to a little job security

considering all a pilot must go through to "get there".

Removing a pilot seniority list from an airline property would enable free

and open competition for the jobs. Sounds good???? Wait, here

come foreigners, unemployed pilots, and anyone else that is willing to

fly airplanes for half or less than what is being paid now. If pilots

aren't careful that's what they will get. A union work rule contract that

contains the requirement of a company to only use pilots on the seniority

list is the best and only job security a pilot really has.

Bob Rioux

Feel free to send your thoughts: editor@bigjetcity.com

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