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EuroWire – July 2009
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Labour issues complicate US-European
e orts to cooperate on transatlantic air travel
The Delta-Air France-KLM joint venture mentioned above is
not the only example of US and European air carriers making
common cause in the hope of and cost- and revenue-sharing
advantages for all concerned. But joining forces on transatlantic
business has a chequered history. A pending bid by American
Airlines and British Airways, now under study by antitrust
examiners, demonstrates that such ventures are not launched
quickly or easily. American and its partners argue for antitrust
immunity for their alliance (oneworld) on grounds that two
competing alliances already have it: Star (composed of Lufthansa,
United, and, beginning later this year, Continental) and SkyTeam
(Delta, Air France-KLM). American also cites the ‘Open Skies’
treaty, signed since a previous, failed, attempt at a BA-American
alliance. The 2008 trade agreement that allows European and US
carriers to o er international ights between their regions has
lifted many restrictions and meant more vigorous competition
at BA’s busy Heathrow hub.
But Open Skies, created to foster US-European harmony, has
brought its own complications to the transatlantic air lanes. The
projected pairing-up of a US and an Irish carrier to outsource
pilots on overseas ights – written up in the
Chicago Tribune
this
spring – provides a case in point.
‘Incendiary’ labour issues
Tribune
reporter Julie Johnsson observed that other US carriers
and their unions were closely watching a venture conceived by
Chicago-based United Airlines and Dublin-based Aer Lingus
that would use non-union crews on new international ights.
The move to outsource some ying between Washington-Dulles
International Airport and Madrid was, she predicted, “likely to
spark an uproar” when United next entered contract talks with
its pilots. (“Clipping Union’s Wings,” 16
th
March). As outlined by
Ms Johnsson, the Europe-based partnership sees United as
contributing marketing muscle and passengers from Dulles,
its second-largest hub. Aer Lingus would contribute three new
Airbus A330 jets and recruit pilots who are employees of neither
airline. Service on the Chicago-Madrid route would commence
in March of next year, with two other cities to be added in 2011.
Analysts consulted by the Tribune noted that the venture, if
successful, could encourage United to seek partnerships with
larger European players, including Germany’s Lufthansa. With
its implicit promise of lower labour costs, it would also serve
as a model for other airlines. Most notably, the outsourcing of
transatlantic ying threatens to diminish the powerful in uence
of unionised pilots in airline operations.
This last aspect caused one aviation observer to describe the
labour issues raised by the plan as “incendiary” to American
airline workers. Nor would US limitations on foreign ownership
apply, since the partnership is to be based overseas. Ms Johnsson
also posed the question whether such “potentially contentious
and structurally awkward arrangements” are nancially feasible.
Aviation consultant Robert Mann commented, “It’s hard to
imagine how this makes money.”
Dorothy Fabian
USA Editor