Call to Action: ALPA President addresses union's future

Capt. Duane Woerth first addressed an Air Line Pilots Association (ALPA) executive board meeting as the union’s president in May 1999, just five months after taking office. He said at the time that ALPA “in spite of numerous years of at least modest revenue growth, had allowed [its] costs—both fixed and variable—to out pace whatever revenue growth [it was] experiencing.” Consequentially, Woerth said, ALPA’s operational contingency fund (OCF) had evaporated “and even our operating cash reserves were at a very, very dangerously low level.”

ALPA has since recovered financially, after instituting some tough and often unpopular measures. This May, after having been unanimously reelected on Oct. 23, 2002 to his second four-year term as union president, Woerth spoke before ALPA’s 91st executive board meeting and outlined future initiatives for ALPA leaders and members who are again facing an uphill battle. Woerth’s speech (edited for space and clarity) is reproduced below:

Here we are in May of 2003 and I can report to you that, in spite of sustaining over 20 months of the most dramatic reversal of fortune that has befallen any industry, our union is still financially strong, vibrant, and resilient. This is true because we not only planned for success but we also responsibly managed the success we had achieved over the recent years. We saved for a rainy day. But, while it is true that we are currently financially strong, the deep and long-term concessionary contracts that have been forced upon us have so dramatically affected our future revenue stream that maintaining the status quo again is simply not an option.

We must re-engineer ALPA to ensure that we are able to fulfill our mission statement in a more streamlined and a more cost-efficient manner. The necessary re-engineering I’m talking about will not be a minor tweak; it will be significant, it will be substantial. In some cases it will seem painful. The 2004 balanced budget that the executive council must approve in September will involve serious cost cutting to match our reduced revenue stream. … The executive council and you, the executive board, over the coming months and weeks will be making numerous hard choices that will allow this union to plan for dramatic and remarkable success in the future, just like that May 1999 Board meeting.

As I travel across the country meeting with elected reps and line pilots, the most frequently asked question is: When is this industry going to bottom out and stabilize and hopefully start a long-term recovery? Nothing gets asked of me as much as that. I always reply that while I do not know precisely WHEN that will occur, I do know what conditions will be necessary to allow it to occur. At our board of directors’ meeting last October—a period of time when labor bashing in general and pilot bashing in particular were at their zenith—we put forward our position papers on the real reasons the industry was in such a nose dive. And, those reasons can be subdivided into at least three categories: extraordinary market forces; a continuing series of management failures; and government-imposed costs and unfunded federal mandates.

Now, the aftermath of the burst of the bubble economy and also the tragic events of September 11th were truly extraordinary events, triggering additional extraordinary market forces. But virtually every other reason for our industry’s demise can be laid at the feet of management and the government. First of all, low-cost carriers achieved critical mass because many of our managements failed to develop pricing and marketing strategies to effectively deal with the problem. I believe we have also demonstrated that management further lost control of their pricing via the Internet. And, instead of funding their pensions and retiring long-term debt, many of these managements spent $11 billion combined purchasing their own now-worthless stock.

More importantly, user fees that were already too high were increased, especially after September 11th, in the form of security fees and unfunded federal mandates — that’s purely a governmental decision. And worst of all, the White House subverted the congressional intent of the $10 billion in loan guarantees that left 80 percent of this program untouched, and as the pilots of US Airways and United know all to well, the conditions that were attached to the ATSB loans became simple labor extortion tools, pure and simple.

So, if those were the reasons why this industry is in such a mess, what has changed to allow stabilization and recovery? Well, so far the only across-the-board positive change is fuel prices are lower. The jury is still out on strategies to deal with low-cost carriers, but after months of bad mouthing by analysts many have changed their minds and now think both United and Delta may have strategies that will work. However, the only effective, long-term keys to airline industry stabilization and recovery are frankly still in the hands of the government.

Will security and user fees and taxes be rolled back and permanently be shifted to the Homeland Security Department? Will our especially desperate need for pension reform occur that will simultaneously protect our pensions and at the same time smooth out airline cash flows? The skyrocketing costs of health care—will anybody have a program to deal with that? Will the stimulus tax package ... have any chance at all to actually stimulate the economy and get people and business travelers back to work and flying again?

Also, what of the national airspace system and our modernization program which embodies the principals and protocols of free flight to alleviate congestion and relieve the $5 billion in annual delay costs that are still with us but have all but been forgotten while we have been focusing on security? These vital programs must go forward, and they’re at risk now. Until all these questions I just posed can be answered with a resounding “yes,” the industry may stabilize, but at some uncomfortable lower equilibrium.

However, it is unlikely to enter into a period of sustained recovery with growth and prosperity unless we make changes. And the bottom line is this: without a change in political leadership and philosophy, especially in the White House, most of what ails us is going to be with us for the future and threaten our long-term viability.

With the 2004 elections only 18 months away, it is not too early for ALPA’s leadership and membership to begin becoming educated as to what political alternatives we have and how we may most effectively influence events to produce a more secure and promising future for our members and their families.

How many of our members have forgotten that after only a couple of weeks in office, President Bush made a speech where he said that there would be no airline strikes on his watch. Except for the Comair strike, that was right; it’s been nothing but PEBs (Presidential Executive Boards) and threats of a PEB ever since. We wouldn’t be worrying about a McCain-Lott baseball arbitration bill if the President of the United States hadn’t set us up with a record-breaking number of PEBs and a clear message he doesn’t want airline strikes.

After September 11th, the White House wanted no—zero—airline financial aid package. Bush would accept no language to include COBRA health care benefits for airline workers in the bill; he even had Republican senators filibuster to make sure the Democrats didn’t have a right to vote on it. The White House turned the ATSB loan process on its head to crush pilots in particular. They opposed our arming-of-pilots legislation. They fought the second relief package for the airlines after the war with Iraq. It provided no help and only roadblocks to the pension reform. They don’t want any airline security fees to be transferred to the Homeland Security where general treasury money will be used instead of user fees because that would detract from the larger income tax cuts they need for corporate CEOs.

With corporate scandals everywhere, they proposed LM2 reports so that unions have a 20-foot thick report that will cost over $3 million in the first 18 months alone here at ALPA to implement. Ladies and gentlemen, we have to go to that clue store; we have to tell our pilots what’s going on in their lives and what they have to do to change it.

Now I’m proud of all of you for helping us increase ALPA PAC (Political Action Committee) to record levels. We are now the 25th-largest PAC in the country—any kind of PAC, not just union PACs. Just last week alone we had to stop a cargo cabotage rule from being attached to the FAA reauthorization bill. We got a cargo security bill that allows the arming of cargo pilots as well. We also got a markup of a technical corrections bill to end the TSA’s rights to declare a pilot a security threat with no due process and no appeal process.

The Communications Department has been just as busy fighting pilot bashing, fighting CESTA and they’re getting our message out. I hope all of you master chairmen had a chance to review ALPA’s new strategic plan for communications. If it’s true that all politics are local, it’s nearly as true that all communications are local, too.

We need to expand our reach with the local markets, both TV, radio and print. And only a trained motivated pilot volunteer will be available and accessible all across the country can do that for us. I’m exited about its potential and urge your support for the plan that was endorsed by the Executive Council.

Now much of this same type of field mobilization that worked for communications can also help us directly out in the field in politics. Now, how do I mean to impose that? We can take these members, and know your members out there want to work very hard with us in helping fight for their agenda. We have the single best inside the Beltway team that’s ever been assembled in Paul Hallisay, Brendan Kenny, and Jerry Baker; that team is the best. Inside the Beltway we’ve got it covered.

Where we don’t have it covered are the Congressmen’s home offices back in the field. That’s where you come in. That’s where your Legislative Affairs people come in. An awful lot of people have gotten a free ride because they may think the pilots out in the field are either politically agnostic, or they’re not getting it, or they’re voting for the very people that are opposing them. The only way we can connect the dots is to have our pilots go to home districts, not here in Washington, but at home, and let them know where the voters are—we’re paying attention, and we can do that.

Since we can expect no political relief for at least 18 months, actually longer since the presidential inauguration won’t be until January 2005, we must do everything here at ALPA we can in the meantime to reserve, protect, and defend this union, to plan for and prepare for a future of success, so that when opportunity does arrive for us to be able to move more aggressively to take the offensive once again and put gains on the table for our members we will be ready.

Now I know every single person in this room—every pilot—didn’t come here to play defense. You all came here to score for your pilots and it’s extremely frustrating for you. It’s the same for everybody at this head table. Nobody up here is a defensive player—everybody wants to go on the offensive—and we will. But to be able to do that we’ve got to stabilize this union so that when that chance comes we can make to the most of it.

We need to support this agenda and use these building blocks to make a very much stronger union. I know everybody came here wanting to make a difference and not make excuses. I know those are kind of master chairmen we have at this table right now and that’s why the May 2003 Board and certainly our Fall Board next year are going to be the boards where chairmen make the hard decisions to make sure this union is going to be the strongest airline pilots union ever for the 21st Century.