Leeham News and Analysis
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Leeham News and Analysis
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- Boeing 2024 Proxy Statement: Executive Compensation includes retirement gifts for Calhoun, Deal; housing support for Ortberg, Pope, and other stuff March 17, 2025
- Bjorn’s Corner: Air Transport’s route to 2050. Part 13. March 14, 2025
Unions Flying High: Book Review
Reviewed by Scott Hamilton
Unions Flying High: Airline Labor Power in the 21st Century
Ted Reed
McFarland & Co.
Feb. 25, 2025, © Leeham News: Ted Reed has been an aviation reporter for as long as I can remember. He also worked in corporate communications for US Air. Among his focus areas is labor relations in the US airline industry. He’s also the co-author of American Airlines, US Airways and the Creation of the World’s Largest Airline.
Reed’s new book, Unions Flying High: Airline Labor Power in the 21st Century, provides a detailed look at how labor unions have resurged from a long era in which their power was eviscerated through a series of airline bankruptcies (in some cases, more than once) and carriers that ceased operations.
This painful era began with the deregulation of the US airline industry in 1979. It continued through the 1991 Gulf War, which dramatically spiked fuel prices. Then came the 9/11 terror attacks in 2001, which decimated US airlines. Add SARS (a pandemic largely limited to Asia) and other events, and unions lost most of their power. Wages and benefits were cut, and defined pension plans were terminated.
I lived through this era, first as a member of middle management with the first Midway Airlines beginning in 1979. Midway was the first airline to be certified by the then-ruling agency, the Civil Aeronautics Board (CAB), in 40 years, right on the eve of deregulation.
The CAB liberally granted applications to cut fares and awarded new routes with abandon before deregulation became official. This led to the 1982 bankruptcy of Braniff Airlines and the following year of Continental Airlines. It was Continental’s bankruptcy that truly began the series of labor defeats that existed for the next three decades, ending with America’s 2011 bankruptcy.
Union battles and surviving deregulation
Frank Lorenzo, Continental’s CEO, details the story of that 1983 battle with labor and surviving under deregulation in his recent book, Flying for Peanuts: Tough Deals, Steep Bargains, and Revolution in the Skies. (Disclosure: I helped finish Lorenzo’s book.)
Reed brings the union story to the modern day. In the last few years, labor has won huge pay increases (anywhere from 25% to 40%) with new contracts, which were unheard of during the last three decades. In fact, these contract gains influenced the demands of the IAM 751 union in its demands last year with Boeing Co. The union won a 43% wage hike over the life of the contract, along with other gains.
Focus on personalities
Reed focuses not on the wins’ details but on the personalities who led the fight back from what some considered to be an abyss of the labor movement. To be sure, Reed covers specific contract disputes. He also reports on how key labor leaders recognized some of the overarching threats to the viability of airlines, notably 9/11 and the COVID-19 pandemic. The US federal government provided bailout monies in each case.
Sara Nelson is the president of the largest flight attendants union in the US. She’s no pushover. But she is also one of those rare labor leaders who (at least in my view) can balance what’s reasonable vs what’s not, and looks at the bigger picture about what’s best in the long term for the industry. Reed essentially views her as a hero, which is fine—and he makes a reasonable case for this accolade.
In the current DOGE firing effort under Elon Musk, Nelson is again at the forefront of protecting her union members. She doesn’t mince words: “You can build all the dick rockets you want to go to Mars while you try to leave the rest of us on the burning Earth. We’re gonna take control. This is our world, and it’s our government, and it’s our money,” she said at a rally.
Reed is clearly sympathetic to unions. His book provides an insight not often seen about the labor movement.
The one problem
The one problem: Publisher McFarland priced the book at a ridiculous $39.95 for a 195-page paperback, the price of many hardback books. (McFarland did the same for another book I will review in the coming days.) Even the Kindle e-book is a high $25.99. Lorenzo’s Flying for Peanuts last year was priced at $32.99 and it’s a 369 hardback (now on sale for $19.13). My book, Air Wars, The Global Combat Between Airbus and Boeing, was a 244-page paperback priced at $24.95.
Other than the price, I recommend Unions.
The stupidity of the AA contract paying an FA over 100k when they pick all the perfect routes to fly is stupidity.
Dumb contracts like this is why the Airline will get back into Chapter 11.
Right.
It wouldn’t be because of buybacks and dividends, a lack of investment back into the company or the c-suite walking away with massive compensation packages for failing.
Nope.
It’s that darn organized labour, where people want to make a living wage.
But hey – don’t let that get in the way of a good narrative:
https://fortune.com/2024/05/21/american-airlines-flight-attendant-starting-salary-ceo-food-stamps-union/
The starting salary for a new American Airlines flight attendant is low enough to qualify for food stamps in some states
May 21, 2024 — The starting salary for a new flight attendant is about $27,000 per year, which is just a fraction of the CEO’s $31.4 million earned last year
————————————–
Those evil flight attendants….
…it’s going to be ignorant people who believe your drivel, that will be the downfall. FAFO
Exactly 💯, give the lower wage FAs at AA a better wage and working conditions don’t add to the 100k of the others!
Huh?
The point is – that AA flight isn’t ‘paying an FA over 100k’
Or, Pay employees well and you get fantastic service and returns.
Beat them about the head and shoulders, you get lousy service and they quit and go someplace else.
Employees are what makes the company money, a good CEO sets them up to do so.
I was a sub contract employee for 25 years. The pareent company finally decided that contracting out our type of work was a total failure, 4 years after I quit.
Instead of a transition, they lost everything I knew and will pay 100s of thousands over the years in bringing in outside techs to fix the issue I did day in day out.
And if you think I am blowing smoke, I quit another company. My replacement then quit and the guy who replaced him was lazy and never learned.
He burned up $100,000 worth of batteries due to failure to maintain the cable lugs. That also meant the computer center was exposed to the power line variations that they spent $500,000 to ensure they did not loosed millions in process runs or equipment.
Capitalism is messy and eventually finds equilibrium. We have seen this before: wages rise and fall, or companies end up in Chapter 11 bankruptcy. If you don’t like it, then do an ESOP.
Not a problem sir – then stop bailing out corporations with socialism, i.e. welfare, when the bosses run the company into the ground.
Capitalism is messy, especially when it needs to be bailed out by the adults in the room.
We have seen this before…we’re seeing it now.
Frank P:
I hope you are not saying the Politicians are the adults in the room.
That is who bails out the Corporations.
The ones who pay for it are the people that work for a living and we got no say. Said Politicos are owned by their investors and now their not so fearless leader (who just happens to be rich but by golly he identifies with us).
I agree on the bailouts, but it’s telling that there are not more ESOPs. If Unions truly believe they have all the answers, then they should take the reins of the company.
Let’s look at mostly non-union Delta (see what I did there). If the employees owned the company, then those profit-sharing checks would be bigger.
williams:
Its a shame you went from 0 to Mach 4 ripping the treads off the dragster tires.
Employees buy out is not an option so even bringing that up is an attempted distraction.
Employees have an interest in how the company is doing and Boeing has proven again and again that management can be the worst enemy.
Everyone has a role to play and none of it works without managers, financial people and employees.
It when management thinks its the answer that problems take place and that is not just true of Boeing obviously.
You can replace managers, you can’t replace all or even 10% of your employees without a complete meltdown.
@TWA
You have have been around, the United ESOP was not a dream. ESOPs are a thing.
@williams
‘If Unions truly believe they have all the answers, then they should take the reins of the company.’
Well – there’s a leap. I never said unions have all the answers, but that capitalism run amok (like BA, for example) or perhaps the banks in the 2008 investment crisis is just…
https://www.youtube.com/watch?v=S1kE0MMfr20
Listen to the girls, they know what they’re talking about.
🙂
There is a balance and Boeing went way past sanity and have put Boeing’s very existence in peril.
I can wreck something, keeping it running on a managerial level, no.
The unions may not have the all the answers (they do hire the same MBAs to take of their retirement portfolios that run companies) but going ESOP is a way to control the narrative.
True about the unions not having all the answers. If the Union had a seat or two on the board, does the 737 fiasco still happen? Does the 787 fiasco happen?
@williams
You raise an excellent point and perhaps, and if someone in particular reads this point, perhaps he/she will respond to you, with a very insightful response.
My view of the 737/787 messes:
The engineering talent at all the OEM’s is probably very, very good. Smart people.
I would hazard a guess that someone DID say something, but was ignored. Or bought off. Or was shifted to another position. Or threatened with their job, to shut them up.
This individual in particular, I am referencing, was asked to go work on one of the aforementioned programs…and refused.
People knew what was going on.
On the BoD:
I think the sole employee representative, on a Board, gets shouted down, by the others. Perhaps nicely. Maybe everyone listens kindly, then when it comes time to vote, it goes 10-1, or something like that.
Historically there is much wrong with the management at Boeing. They create issues and then offer you these promotions without compensation to allow you to have the prestige of retrieving bad situations for them. When the 787 was demobbing out of Everett and they were standing up the Charleston Factory, they offered many long time Speea Techs in BCA the chance to resign from their pension, health care and negotiated SPEEA labor agreement to go to Standup Charleston on the Boeing Salaried standard benefits plan. I laughed at them when they wanted me to go cross country to join the Tupperware Cowboys…….. We knew where the bodies were buried and watched the new graves being dug. Someday, somebody will be able to write a book without fear of retribution about the 787. Every time you think you can stop shaking your head in disbelief, theres more…..
If I remember correctly, deregulation of the US airline industry came in 1978, not 1979.
Legislation was introduced but not yet passed in 1978.
President Jimmy Carter signed the Airline Deregulation Act into law on October 24, 1978.
Midway Airlines began service on Oct. 1, 1979, and it was the first scheduled passenger airline to be certificated by the CAB in 40 years; the application was filed before deregulation. I was there.
IMHO- local unions often take a beating- spiral downward when the ‘ national ‘ union “presidents” and similar take over the local and have undue influence.
For example in the early 2000s, the ‘ national ‘ IAM president really took over the 751 local during contract negotiations. And while not as obvious, the ‘ national’ did not really help SPEEA during the same era.
@Bubba2 – SPEEA affiliated with IFPTE in October 1999, and went on strike in February 2000. IFPTE locals, IFPTE international, and the AFL-CIO were huge help to SPEEA, before, during, and after the strike. Maybe I’m misunderstanding what you mean by “the nation did not really help SPEEA.”
Stan- true IFPTE did help then – but go forward a few years during the next two -3 contracts and remember how much ‘ help ‘ was really provided and why SPEEA essentially got steamrolled. Up thru 2000-2001 SPEEA used an outside professional firm to help evaluate benefits and pension issues. And national did NOT help re the internal nepotism and improper games re an executive also dipping into other ” union” benefits and sandbagging the local auditor. And the total mess made as a result of internal SPEEA not using an outside professional firm that did know the difference between SPD and Legal Plan documents. I could add a bit more but this is NOT the place. And with a bit of thought, you do/did know me during that time frame.
for the sake of variety
Reuters
Boeing says Stephanie Pope is no longer its chief operating officer
“Boeing said on Tuesday Stephanie Pope is no longer the chief operating officer at the planemaker as of February 19.
Pope will continue to serve as Boeing’s commercial airplanes chief, the planemaker said.
Boeing had appointed Pope to the newly created role of COO in December 2023.”
Is the union subject boring you?
no, but having major changes in Boeing executive branch is noteworthy
“As of February 19th, Pope’s former position of chief operating officer (COO) was eliminated, and her responsibilities have been significantly narrowed down. She remains the company’s second-in-command, serving as the executive vice president, president, and CEO of Boeing Commercial Airplanes. Boeing noted that the COO title will no longer be used at the company and that it has no plans to fill the currently unstaffed role.”
It is also totally off topic. You seem to have an attention disorder.
@TW: Watch it. Stop insulting others.
Hamilton
I don’t find @DP’s post on Stephanie Pope to be off topic. Have you forgotten how her actions prior to / during the recent strike only added fuel to the union fire? I can imagine that the shop floor won’t miss her at all now that she’s ex-COO.
Well the topic is a book about Airline Unions not Boeing or Boeing Unions.
So yea, its not on that topic. Scott of course decides what rides or not but trying to make a square peg argument fit a round circle is sophism.
So, here’s a quote from one of your comments above.
Kindly explain what possible relevance this has to “a book about Airline Unions”:
Quote:
“And if you think I am blowing smoke, I quit another company. My replacement then quit and the guy who replaced him was lazy and never learned.
“He burned up $100,000 worth of batteries due to failure to maintain the cable lugs. That also meant the computer center was exposed to the power line variations that they spent $500,000 to ensure they did not loosed millions in process runs or equipment.”
—
Does the aforementioned “book about airline unions” in any way concern itself with the minutiae of your past career?
People: I try to exercise some liberties about what is or isn’t on topic and generally avoid getting into the weeds because (1) I don’t have time and (2) because while some things are clearly tangential, they aren’t going off into “left field” like bringing up nuclear wars or stuff like this.
TW begins his latest comment on topic and dives into personal experience. I don’t find this objectionable. Pritchard’s insertion of Stephanie Pope, while not on topic, is a fair addition because it was breaking news, so-to-speak. TW’s reply was out of order.
One reason I allow breaking news or tangential news items to be included, especially with URLs, is that this often brings something to my attention that I otherwise might have missed.
So I exercise tolerance and latitude. What I drop the hammer on is insulting each other, going off on geopolitical stuff that is clearly irrelevant, and–unless political actions are the topic–I won’t tolerate getting into MAGA, Libs, AfD or any of this type of political commentary because LNA is not a political venue.
Even when a topic, like tariffs, is political, comments must be civil or I will drop the hammer.
Hamilton
Scott:
Thank you. I had not seen an explanation for your reasoning in that regard (I have asked) and I am of the school you do not have to explain it to me, its your blog.
It also has caused me a great deal of puzzlement. So while not owed its much appreciated.
I am going to print that out so I can have it as a reference in my postings as well as future response (or just shutting up as impossible as some may find that!).
Out of respect for you, Mr. Hamilton, I do not often respond to certain posts or posters. We all appreciate this venue to express our opinions, although some individuals mistakenly think their opinions are facts. LOL.
Thanks for the reminder.