"Airline workers chafe at cuts to pay and benefits, struggle to adjust long-held expectations"

Saturday, February 26, 2005

Airline workers chafe at cuts to pay and benefits, struggle to adjust
long-held expectations
BY ADAM GELLER
The Associated Press


DES PLAINES, Ill. - The phone line in Dave Meyers' third-floor walkup has
been turned off to save cash, and the brown velour sofas, bought
second-hand, are bare in a few spots. Still, the modest apartment is about
what you'd expect for a single guy who spends most of what he earns.

The problem for Meyers - a United Airlines ramp worker whose pay has been
cut twice in the past two years - is that he consistently spends more. Child
support is nearly $700 a month. Of the remaining $1,600, rent claims another
$700 and is unpaid although it's the 11th of the month.

The financial juggling has Meyers fuming. This is not what he expected when
he went to work at United 7 1/2 years ago, trading the headaches of running
his own contracting business for the security of working for someone else.
The rules were clear, he says, feverishly paging through an old union
contract for the language to prove it.

That contract, however, was written for a company, UAL Corp., and an
industry very different from the one workers find themselves in today. It is
a reality that Meyers and many others, demoralized by pay and benefit cuts,
remain reluctant to accept.

"Everything keeps going up, man," said Meyers, leaning forward from one of
the sofas. "And we're just going backwards."

The airline industry - battered by record fuel prices, low-cost competition,
the lingering effects of the Sept. 11 attacks and other problems - is
squeezing workers long accustomed to generous union-negotiated pay, robust
pensions and enviable job security.

Analysts say the workers have no choice but to adjust. They note that
industries from steel to telecommunications are also cutting benefits, a
trend that will likely continue.

"I do not think this is the last time an American industry will go through
this kind of upheaval," said Darryl Jenkins, a professor of airline
management at Embry Riddle Aeronautical University in Daytona Beach, Fla.
"This world is very much changing and unstable, and in those kinds of
circumstances, this kind of change is inevitable."

Airlines have directed most cuts at labor costs that now account for nearly
a third of their operating costs. United baggage handlers shouldered an 11.5
percent pay cut in January, temporary until April. That is on top of an 18
percent cut two years ago. At USAirways Group Inc., flight attendants agreed
to pay cuts of about 9 percent late last year, their third cut in 2 1/2
years.

Some airline employees, like lead ramp workers at United, still earn close
to $20 an hour after the cuts - better than $41,000 a year before overtime
pay - and acknowledge they'd be hard-pressed to find a comparable job in the
current economy.

The cuts are a painful side effect of efforts by established carriers, known
in the industry as legacy airlines, to make themselves more like JetBlue and
other low-cost upstarts.

"It's one of the challenges of the legacy network airlines," said Michael E.
Levine, a former top executive at three airlines and now a law professor at
Yale University. "They start with a labor force that has grown used to and
felt entitled to work on terms that customers simply won't support."

Workers say they can't just ditch the mortgages, tuition bills and other
expenses based on yesterday's paychecks.

Consider the monthly budgeting worries of Eileen Zolinas, a 16-year flight
attendant for US Airways whose husband, a mechanic for the airline, died in
1993.

Zolinas flies on call and gets paid for 71 hours of flight time monthly. But
she figures that she needs to work at least 95 hours to pay the bills.

Limited hours and lower wages have pared her annual earnings from about
$40,000 a few years ago to about $31,000 last year. With the newest pay cut,
she expects them to drop to about $26,000.

For years, Zolinas and her children, now 21 and 23, were covered without
cost under her deceased husband's medical benefits. When the airline stopped
providing those, Zolinas enrolled in the company plan on her own, but that
costs about $200 a month.

Her son left Pennsylvania State University and moved back home to enroll at
the University of Pittsburgh because he couldn't afford to pay for housing
and she couldn't afford to help.

She considers whether to relocate to Philadelphia, where the airline is now
directing more of its flights, or to try another line of work but is
reluctant to leave her hometown and her children.

"I'm on pins and needles here," says Zolinas, of McKees Rocks, Pa., just
outside Pittsburgh.

For Meyers, the United ramp worker, the new airline economics is more about
losing the chance for bigger paychecks.

Meyers says he was making about $60,000 a year in the mid-1990s running his
own business, before applying for a job with the airline. He started at
$8.98 an hour. But the contract promised a jump to a higher wage scale after
five years.

He reached that point in 2003, when his pay nearly doubled to $25.06 an
hour, equal to roughly $52,000 before overtime. It lasted for one paycheck.

A new contract agreed to by the union cut Meyers' pay to $20.66 an hour.
Last month, workers' pay was pared again, leaving Meyers at $18.41 - about
$38,000 a year.

Meyers, with access to low-cost air travel, can still justify a recent trip
to Tampa for a few days of golf. But he also has to explain to his children
that he can't afford to take them out for fast food, since it's cheaper to
eat at home.

Meyers said it's too late to rebuild his contracting business and says he
can't afford to leave a job that provides health insurance for his children
and an increasingly tenuous grasp on a future pension.

Airlines acknowledge the cuts are difficult for workers but say they are
necessary sacrifice to keep companies afloat - and the workers' jobs intact.

"All the work we've been doing is difficult, but it's necessary," said Jean
Medina, a United spokeswoman. "We do think there's a new reality."

But with the parameters of that new reality in flux, workers are uncertain
about what comes next.

At 19, Craig Krzewina dropped out of college and took a job washing dishes
in the cafeteria at United headquarters, seeing it as a route to a better
job. By the mid-1990s, he was making good money as a ramp worker and, thanks
to an employee stock ownership plan, had accumulated a nest egg of shares
worth about $125,000.

Now, 27 years after he joined the airline, he's liquidated that account
after its value plummeted, settling for about $5,000. He's making $19.73 an
hour, a wage Krzewina admits he'd be thrilled with if he was out looking for
work. Except that puts him back at roughly what he was making 11 years ago.

"Back then when you started, pretty much everyone was a lifer because it was
a good job," he says. "But this isn't the job it was. And you see it now."


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