Higher Airline Labor Costs and Fewer Route Auctions Could Fall Under Obama’s Watch

Obama pledged to keep limits on foreign ownership of U.S. airlines’ stock, and may accelerate air- traffic control upgrades and improve controllers’ working conditions, according to industry groups and unions.

The Democratic senator from Illinois comes to the White House with home-state ties to the industry. Chicago’s O’Hare airport is the world’s second-biggest by passengers and United Airlines, the third-largest U.S. carrier, is based in the city.

“We would expect an Obama administration would live up to its strong commitment to not only support, but strengthen, the collective bargaining right of workers,” said Ed Wytkind, president of the AFL-CIO’s transportation trades department.

After industry losses the Air Transport Association trade group projects at more than $5 billion this year, airlines may post a collective 2009 profit, thanks to fare increases and fuel prices that have tumbled about 50 percent since a July peak.

Delta, the world’s largest airline, is also the U.S. industry’s least unionized, with only pilots represented. Unions including the Association of Flight Attendants will try organizing drives next year at the Atlanta-based carrier.

A National Mediation Board under Obama appointees may make decisions different from one on Sept. 30 that found Delta hadn’t interfered in a union organizing campaign, Wytkind said. The board rules on airline labor disputes.
Obama’s mediation board may take steps such as granting quicker releases from mediation, which would let unions start countdowns to possible strikes sooner, said Andrew Steinberg, former transportation assistant secretary under President George W. Bush.

Those actions might prove “significant” in giving unions leverage in talks over wage increases and work rules, said Steinberg, a partner at the Jones Day law firm in Washington.

Carriers with contract talks pending include AMR Corp.’s American Airlines, now in a third year of negotiations with its 12,000-member pilots union.    

Under Obama, American, Continental Airlines Inc. and other carriers have a better chance of protecting their flights in New York, the nation’s to save costs, said Kevin Mitchell, chairman of the Business Travel Coalition in Radnor, Pennsylvania.

Mitchell, who worked with Teamsters in calling for greater oversight of so-called outsourcing, advocates a public database so consumers could see records of where maintenance was performed on specific planes.

Obama pledged to maintain status quo on limiting foreign ownership of U.S. airlines to 25 percent of voting stock and 49 percent overall, said Downey, the adviser.

Bush failed in a bid to raise the voting-stock ownership limit to 49 percent. Labor groups opposed raising the cap, citing possible job losses.      

There are other ways foreign-ownership provisions might be loosened, such as allowing a single transaction to go forward with no other change in the underlying law, said Dorothy Robyn, a former senior aviation adviser to President Bill Clinton.

“A Democratic White House can have a conversation with labor,” said Robyn, a principal with the Washington consulting firm Brattle Group. “That issue becomes more flexible, ironically, in a Democratic White House.” 

Souce:  John Hughes Bloomberg