Seniority, Fairness, and Pilot Union Failure

Robert J. Lavender

Much 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.

The situation is simple to understand: In the pilot culture, seniority rules. 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. 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.

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 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.

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.

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. 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.

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.

In this writer’s opinion, “seniority," as currently employed by pilots, causes gross disharmony within the ranks of union members. 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.

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.

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.

Bob lavender has been a Federal Express pilot for 18 years, a Continental pilot ('78-'83), and is the owner of a nationwide real estate referral network. He lives in Provo Utah, and he can be reached at roblav@prodigy.net

And in response: