A Case of Real Job Protection
June 26, 2009
Mark Burdette on the scope clause in the pilot contract
Three big issues in many airline labor negotiations are pay, benefits and workrules. One provision most people outside the industry have never heard of is “scope.” At many airlines, scope is the equivalent of the third rail, particularly in pilot contract talks: touch it and sparks are going to fly.
Scope attempts to provide job protection. In a pilot contract, the “scope clause” can limit or affect, for example, the size and type of aircraft an airline flies and the partnerships an airline forms with domestic, international and commuter carriers.
At American, the original scope clause in the pilot contract, first introduced more than 25 years ago, said AA pilots must fly all flights by or on behalf of American Airlines:
“All flying performed by the Company, a subsidiary, or affiliate directly or indirectly controlled by the Company, or successor in interest, or flying performed on behalf of the Company as a result of any agreement to which the Company is a party or becomes a party, shall be performed by pilots named on the active American Airlines Pilots Seniority List.”
Over the years, the company and the pilots union have formally recognized important exceptions to the “all flying” provision. These have authorized American to develop codeshare agreements with foreign airlines and expand our domestic network through codeshares with domestic carriers such as Alaska, and regional airlines, including American Eagle and American Connection.
These exceptions to the scope clause have recognized some of the realities in the airline industry; namely, that we can’t operate a competitive airline without providing a robust network, including service to foreign cities outside our network or to the small U.S. cities that don’t provide enough traffic to justify flying a big plane in and out.
The Allied Pilots Association union agreed to these exceptions in part because they knew it enabled AA to offer routes that provide passenger “feed” and therefore support to the mainline. For example, a business traveler who takes an Eagle flight from Baton Rouge to Dallas then flies an American flight from Dallas to, say, Los Angeles. Without that feeder flight from Louisiana, AA may never have captured that Los Angeles traveler, but would have lost the business to a competitor.
Today, this feeder traffic is more important than ever to AA’s ability to grow the network and succeed in a highly competitive market. Eagle now contributes more than $3 billion in revenue to AMR and connects millions of fliers to American mainline flights every year. That is revenue and connecting traffic that wouldn’t exist without the feed, and secures AA pilot jobs. Further, as a percentage of total ASM’s, American’s commuter partners are significantly smaller than all our competitors.
So why is the pilots' union using contract negotiations to try to take back those scope exceptions? Its proposal demands all flying by or on behalf of AA be done by AA pilots – something the union supports because, as it says, “simpler is better.”
APA’s scope clause would force American to abandon its alliances with foreign carriers, offer fewer opportunities to international cities and fly far fewer international passengers on their travels within the U.S. – making us less attractive to consumers and less competitive. The less competitive we are, the more we’re likely to shrink rather than grow, resulting in fewer pilot jobs.
APA’s simple scope clause proposal also would force American to either end its relationship with American Eagle, or attempt some sort of merger between the two carriers. Under Allegheny-Mohawk labor protective provisions, which recently became law to govern future airline mergers, a merger would mean a combined mainline and commuter pilot seniority list based on “fair and equitable” integration. This determination has typically been made by an arbitrator, and could be based on date of hire. Such a method would put some AA pilots below AE pilots on the combined list. The divisive battle over seniority between pilots at US Airways and America West following the merger of the two airlines, which continues today, demonstrates the difficulty of this process.
Either way, changes would likely mean cancelling service to dozens of communities on routes American no longer could fly, as well as force other capacity cuts that negatively impact flight crew jobs.
Unfortunately, there’s no such thing as iron-clad job security in any industry. While we have offered furlough protection to the APA in conjunction with our efforts to improve productivity, the only real job security is a healthy and profitable company. Clauses that “protect jobs” only go so far, and frequently don’t accomplish the desired objectives, as rigid restraints on a company’s flexibility and competitive ability do more to jeopardize jobs than secure them.
