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Airline Division News, Week Ending October 15, 2016

Amerijet Pilots reach Agreement in Principal with new management 

Into the early hours of Friday morning, after nearly four years of bargaining and arbitration, the Airline Division of the International Brotherhood of Teamsters, Teamsters Local 769 and the Amerijet negotiating committee announced that an Agreement in Principle had been reached by all parties for a new collective bargaining agreement.  

According to David Renshaw, Local 769 Business Agent for the Miami based carrier; significant gains over the previous collective bargaining agreement have been achieved. 

“We anticipate having the final language and agreement ready in the near future for the membership to review and vote upon,” said Renshaw. “After years of arbitrations, lawsuits and the Company doing everything it could to refuse to honor the existing CBA, we are moving forward under the direction of the new ownership. With the willingness of their management team, we anticipate a better and more productive relationship to take place where labor is concerned.   

A tremendous amount of credit belongs to Airline Division Director David Bourne, Assistant Division Director Steven Nagrotsky and Lead Attorney Nick Manicone, as we would not have been able to proceed to obtain this agreement without their outstanding leadership, unyielding efforts, guidance and their steadfast commitment to all Teamsters in the airline industry. 

Furthermore, I would also like to thank the I.B.T Economics Department and the due diligence of our collective bargaining committee, as their tireless efforts are validated through a successful agreement having been reached by all parties,” he concluded.

NetJets Mechanics respond to company subcontracting critical maintenance 

Recently, aircraft mechanics, fuelers, cleaners and stock clerks passed out hundreds of handbills to their NetJets co-workers in the company cafeteria in response to their employer’s decision to subcontract critical maintenance work to third-party vendors. 

Teamster representatives handed out fliers titled, “Broken Planes, Broken Promises,” which stated, “Subcontracting maintenance reduces jobs and decreases oversight...keep the jobs and the oversight at NetJets for the good of all of us.” The handbill also said, “When an aircraft breaks, NetJets mechanics and support employees know how to fix it with skill and dedication.”

The International Brotherhood of Teamsters, Teamsters Airline Division and Local 284 represent mechanics, maintenance control, aircraft fuelers, aircraft cleaners and stock clerks at the Columbus, Ohio based airline. The business jet operator is owned by Berkshire Hathaway (BRK.A and BRK.B). 

NetJets Aviation, Inc., and NetJets Sales, Inc., employ a mere 111 mechanics to perform maintenance work on its fleet of approximately 400 aircraft. By comparison, a major airline employs over 7,000 mechanics to service its fleet of approximately 700 aircraft. The number of mechanics employed impacts other jobs, including positions related to oversight and maintenance support. Increases in maintenance subcontracting could affect hundreds of other jobs at NetJets and other carriers. 

NetJets recently announced that its sister company, Executive Jet Management, intends to phase out maintenance operations in White Plains, N.Y., and Cincinnati, Ohio. However, the company refuses to commit that its own aircraft technicians rather than lower cost vendors will perform maintenance work on NetJets aircraft at those locations and others around the nation. 

“There is no good reason for NetJets to continue down the path of outsourcing more critical maintenance functions,” said Paul Suffoletto, President of Local 284. “They have highly skilled technicians sitting idle while subcontractors work on NetJets aircraft across the nation. The trend with NetJets management is more subcontracting in the future, not less.” 

As part of an effort to publicize their labor dispute, workers plan to distribute similar handbills at locations frequented by NetJets’ customers. Contract negotiations between the Teamsters and NetJets have stalled over the company’s refusal to limit subcontracting and assign more safety-sensitive maintenance to its own workforce.
 
“The Teamsters are standing up for these hardworking and professional men and women,” said Capt. David Bourne, Director of the Teamsters Airline Division. “We are committed to the success of maintenance operations at NetJets and our efforts to bring subcontracted maintenance work in-house are good for the workforce, the company and customers.” 

 

UPS Mechanics head to negotiations work while management demands cuts

With the start of the holiday shopping season just weeks away, mechanics and other workers who ensure UPS’s (NYSE: UPS) fleet of jet engine aircraft are operational and safe are heading into negotiations with the company.  

UPS, a multi-billion-dollar company, is calling for a massive reduction in both active and retiree health benefits for 1,200 maintenance workers who are critical to the company’s supply chain. Most do physically demanding and often dangerous work around jet engine aircraft and equipment, and toxic fuel, chemicals and exhaust. 

“Every day I go to work to service the planes that are essential to UPS’s success and to customers all over the world getting their important deliveries like text books, medicine and building supplies on time. Without operational aircraft, these important deliveries and holiday gifts won’t be delivered on time. I take my job very seriously, but it takes a toll on my body,” said Ralph Neapolitan, a 10-year mechanic at UPS in Louisville, KY. “UPS is hugely profitable because of the dangerous work we do, and it isn’t right that the company is trying to deny us of basic health benefits. We are standing up to UPS together to protect our health and our retirement.” 

UPS is proposing to increase health care costs for families by as much as 430 percent in just the first year of a new contract with increases each year after, while the company’s record profits, huge dividend payouts, and massive executive compensation packages dominate headlines. In September, the company announced additional stock incentives and 10 percent raises for its top executives: Chairman and CEO David P. Abney, Senior Vice President and CFO Richard N. Peretz, CCO Alan Gershenhorn and President of U.S. Operations Myron A. Gray. The company predicts another quarter of record-setting earnings. 

“Our breakrooms and offices fill up with toxic fumes when aircraft are moved in and out; jet engine blasts are a continual risk as is hearing loss due to dangerous working conditions; not long ago a member’s leg was crushed by a main landing gear wheel that fell on it; and we’ve had numerous members whose backs have been ruined by lifting massive charging cords with no assistance,” said Tim Boyle, President of Teamsters Local 2727, who represents the mechanics and other workers.  

“These are just a few examples of the dangers facing mechanics, and it is unconscionable that UPS is coming after our members’ health care and retirement benefits during this holiday season. The company, millions of customers and pilots all rely on mechanics to keep this multi-billion-dollar company operating and delivering on time,” added Boyle. 

In 2008, OSHA cited UPS for violations that led to, among other injuries, a worker breaking his neck when a truck he was parked in was blown over by the jet blast of a Boeing 747 aircraft. A recent OSHA complaint asserts these dangerous conditions persist. This physically strenuous and often dangerous work of aircraft mechanics, inspectors, utility employees and others is a key reason why health care cuts are a non-starter for Local 2727 members.  

“Often there is just one mechanic assigned to an airport, and that takes a serious toll on us physically. Repetitive stress and lifting injuries are common because maintenance staff is operating solo and fast, in order to keep things moving on-time,” said Kevin Gawlik, a mechanic  at Rockford, Illinois for the past 22 years. “We have members who are out on long-term disability at 60, who may never return to work because of injuries sustained after years of this demanding labor. What happens to them and their families if UPS guts their health benefits?”

Workers have held protests and informational pickets in front of retail giants like Amazon (NASDAQ: AMZN), a major customer of UPS, calling on UPS to preserve good, middle class jobs for these vital, skilled workers. More protests and pickets are scheduled to occur as UPS attempts to deliver more than 1.6 million packages a day during the lead up to the holidays, which is peak season for the package delivery giant. 

FlexJet Negotiations continue, ASAP ERC now has a member selected by the union

Negotiations to attain a Joint Collective Bargaining Agreement (“JCBA”) resumed on Tuesday morning, September 27, 2016, in Cleveland, OH. This was the second of two bargaining sessions held in September.

The two sides began discussions with Senior VP of Flight Operations Joe Salata immediately began discussions about the Flexjet Aviation Safety Action Program (“ASAP”) Memorandum of Understanding (“MOU”). This MOU, which follows the Federal Aviation Administration (“FAA”) template, would give the Flexjet ASAP representative selected by the Union full participation and voting power during the ASAP Event Review Committee (“ERC”) meetings.  

This individual would be the exclusive representative of the Flexjet pilots in the ASAP program. The other two parties of the ERC are the FAA and management. Discussion concerning the MOU and a companion ASAP Letter of Agreement (”LOA”) consumed the rest of the morning’s session.

The Company had taken the position that the ASAP LOA had to be signed before the MOU could be executed. For a number of technical and practical reasons the union strongly disagreed, which resulted in extended debate. Discussions continued throughout the day and the union successfully secured the pilots’ position to have the ASAP MOU signed first, followed shortly, thereafter, by the signing of the Flexjet ASAP LOA. 

An overview of the sessions and the content of all proposals and counter-proposals showing the contrast between the Union and management proposals is accessible on the IBT Local 1108 Virtual Union Hall (“VUH”) at http://forum.ibt1108.org, a read-only forum specifically dedicated to JCBA negotiations has been developed for viewing.

 

Airline Industry News 

Governmental and Regulatory

The Federal Aviation Administration has endorsed a global plan to ban shipment of lithium-ion batteries aboard airplanes, a practice blamed for bringing down two jetliners when the batteries burst into flames. 

Speaking at an aviation cargo industry summit, Peter Neffenger, who heads the US Transportation Security Administration, said his agency has been studying using canines to screen cargo at off-airport sites. As a way to improve screening, Neffenger said he was a fan of the idea. 

Airlines, Industry and Labor

Delta Air Lines’ Trainer, Pennsylvania oil refinery is expected to incur an operating loss of about $100 million for the full-year 2016 after posting operating profits in both 2014 and 2015.

Researchers have found that scientists collaborate more after Southwest Airlines enters their market, reducing the cost of travel to meet with other scientists. They found this was true across disciplines. 

Southwest will add international cargo service to its business model next year. The airline is currently upgrading back-office systems to handle international orders. 

Atlas Air and Boeing on Tuesday announced a deal that would convert nine 767 wide-body passenger planes into converted cargo freighters, up from the four planes planned initially. Atlas in May announced it would provide air cargo services to Amazon.com. 

Beginning in 2018, Airbus will reduce  its production pace of the A380 to one aircraft per month. The manufacturer currently builds 2.5 A380s per month. 

Buoyed by Labor Day travel, American Airlines and United Airlines both posted better-than-expected unit revenue for September. Both carriers raised their profit margin forecasts for the third quarter.  

Stamford, Connecticut-based commercial aircraft lessor Intrepid Aviation has revised a firm purchase commitment with Boeing for six 777-300ERs, canceling two of the 777-300ERs in favor of two new 747-8 freighters.