Ready for another labor showdown in the volatile airline industry?
It's coming right up at Republic Airways, the Indianapolis, Ind.-based regional carrier that on Thursday afternoon plans to present what it calls a "last, best and final offer" to International Brotherhood of Teamsters Local 357, which represents some 2,200 Republic Airways pilots.
This airline labor battle is of particular interest in the Chicago market because this is where the largest number of Republic pilots, 350, are domiciled.
And both United Airlines, which has its largest hub in Chicago, and American Airlines, which has its third largest hub at O'Hare International Airport, contract with Republic to fly large numbers of their regional flights out of O'Hare.
Republic operates approximately 72 American Eagle regional flights out of O'Hare daily on weekdays, while Republic handles 35 United Express flights a day out of O'Hare. Republic also handles another 16 O'Hare flights for Delta Connections, the regional arm of Delta Air Lines Republic and the pilots who fly all its planes have reached a critical juncture in their turbulent relationship.
The pilots' Local 357 and Republic management have been trying to negotiate a new contract since the previous one became amendable in 2007.
Do the math. That's eight long years of negotiating between the two sides. By comparison, Southwest Airlines has been in talks with its ramp agents for around five years and with its flight attendants for two years. Southwest flight attendants late last month resoundingly voted down a tentative contract suddenly presented to them for approval in early July.
Neither Republic nor its pilots are particularly interested in stretching out bargaining any longer. Which is why Republic has decided to make an unusually high-profile event of the presentation of its last and best contract offer to pilots on Thursday in Washington, D.C.
The tentative contract, which a Republic spokesman called "industry leading," is expected to be made public at the same time it is presented to Local 357.
A spokeswoman for Local 357 declined comment on the state of negotiations with Republic or on Thursday's meeting or a tentative contract. The spokeswoman also did not make available for comment any other executive with Local 357.
The big question, of course, is what will happen in the immediate wake of Republic's tentative contract offer on Thursday.
The short answer? No one knows.
But whatever happens, there's no disputing these are tough times for regional airlines, which handle a large number of the total flights operated every day by legacy carriers such as United and American Airlines. At United, upwards of half of all its daily flights are now operated by regional carriers such as Republic and SkyWest Airlines and others.
Though these are not easy times for anyone on the front lines in the airline business, it can be especially brutal in the regional airline sector, where well-trained pilots at Republic, for example, can expect to start at salaries around $22,000 a year.
Because of the low pay scales and the demands of being a pilot on any commercial aircraft, Republic has a had a tough time attracting skilled pilots, forcing the carrier to contract its operations. Republic departures last month were down 1 percent year over year, and traffic on flights it operates was down 5 percent year over year.
Republic pilots are obviously looking for a new contract that betters their situation financially. But they also want work rule improvements to help ensure, among other things, that pilot fatigue doesn't become a major problem.
But as the long and on-going battle between Southwest flight attendants and management demonstrated last month, both sides at the bargaining table in the modern-day aviation industry have to get a contract they can live with for several years in a business that is nothing if not increasingly unpredictable.
(Lewis Lazare - Chicago Business Journal)