Official Journal of the Air Line Pilots Association, International Air Line PilOt October 2017 Follow us on Twitter @wearealpa PRINTED IN THE U.S.A. ALSO IN THIS ISSUE: » Remembering 9/11 page 38 » Recently Retired page 44 » Our Stories page 43 CARGO: Every Pilot’s Concern page 6 and 29 STATE OF THE NORTH AMERICAN AIRLINE INDUSTRY page 21
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Official Journal of the Air Line Pilots Association, International
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OCTOBER2017CONTENTSVOLUME 86, NUMBER 8
38
Official Journal of the Air Line Pilots Association, International
Air Line PilOt
October 2017
Follow us on Twitter@wearealpaPR
INTE
D IN
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ALSO IN THIS ISSUE:» Remembering 9/11
page 38
» Recently Retired page 44
» Our Stories page 43
CARGO: Every Pilot’s Concern
page 6 and 29
STATE OF THE NORTH AMERICAN AIRLINE INDUSTRY
page 21
COMMENTARY5 OUR UNIONThe Time Is Now
6 PILOT COMMENTARYCargo: Every Pilot’s Concern
7 PILOT COMMENTARYContinued Positive-Trend Bargaining
8 PILOT COMMENTARYStrengthening the Connection Between ALPA and Its Members
9 GUEST COMMENTARYOutlook for the Airline Industry
FEATURES21 THE STATE OF THE NORTH AMERICAN AIRLINE INDUSTRY
29 AIR CARGO INDUSTRY GATHERS FOR SAFETY SYMPOSIUM
32 COLLECTIVE BARGAINING COMMITTEE PLANS FOR THE FUTURE
34 OPEN ENROLLMENT: QUESTIONS TO ASK AND DECISIONS TO MAKE
38 A DAY OF REMEMBRANCE
DEPARTMENTS10 PREFLIGHT
40 ALPA@WORKHighlighting the Importance of Serving ALPA Members; ALPA Committee Chairs Promote Diversity, Inclusion; ALPA Pilots Pay It Forward at OBAP Conference
43 OUR STORIESAir Wisconsin Pilot Commands Sea and Sky
44 RECENTLY RETIREDSee Who’s on the List
45 THE LANDINGDouble Take
46 WE ARE ALPAALPA Resources and Contact Numbers
ABOUT THE COVERA FedEx Express B-777 on the ramp at Oakland Internation-al Airport during sunrise.
Postmaster: Send address changes to Air Line Pilot, 535 Herndon Parkway, Herndon, VA 20170.
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October 2017 Air Line Pilot » 3
Air Line Pilot Feature Article » TITLE HEREBeyond the PageLook for these icons throughout the magazine to get access to even more information, including additional content, videos, and audio clips—or to get feedback on a question.
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L eo Tolstoy said that the strongest of all war-riors are time and patience. In Washington, D.C., and Ottawa, Ont., as well as at contract
bargaining tables across the United States and Canada, ALPA pilots are exhibiting extraordinary unity, discipline, and commitment to our union’s long-term cause and course: representing our pi-lots. Despite all the external noise and distraction, ALPA pilots are standing unified and resolved—focused on this union’s goals, which are, after all, not about ALPA but about our members.
In a powerful display of unity, ALPA pilots have met the terrible destruction wrought by no fewer than five hurricanes with enormous gen-erosity of spirit and support. Our members and other contributors have given more than $135,000 in donations to Pilots for Pilots, our union’s emergency relief program, since our first appeal re-lated to the storms. We’ve received more than 120 grant applications, and help is on its way to our mem-bers in need. In addition to offer-ing financial support, ALPA pilots serving in the Air National Guard and military reserves and those at JetBlue, United, and other airlines have flown relief supplies to Florida, Puerto Rico, and Texas.
ALPA pilots also stand strong together when we’re in contract talks. As you’ll read in this issue, many airlines that are in negotiations with ALPA pilot groups currently have the ability to pay pilots a market-rate contract. Add to this fiscal strength the stability that the company and its investors will gain by signing long-term pilot contracts, and it’s clear that the time is now for management to come to the table with propos-als that reflect their pilots’ contribution to their companies’ success (see pages 12–16).
The time is now––and ALPA pilots are turn-ing out to demonstrate their solidarity for their pilot group negotiating committees and for each other. At Frontier, for example, pilots have voted overwhelmingly to authorize a strike, and they’ve maintained momentum as they mark the one-year anniversary on October 1 of starting medi-ated talks with their company. JetBlue pilots just held another successful unity rally—this time in Boston, Mass., where more than 300 pilots turned out in support. Spirit pilots, who’ve also voted overwhelmingly to authorize a strike in a unified backing of their pilot negotiators, have kept the
spirit of unity strong with recent informational picketing in Detroit, Mich., and Las Vegas, Nev.
In Canada, WestJet pilots began negotia-tions recently, marking the first official labour negotiations under the Canada Labour Code in the history of the airline. The talks take place on the heels of WestJet pilots’ landslide vote to join ALPA just five months ago. The pilots at Encore, WestJet’s wholly owned subsidiary, also began collecting cards to certify ALPA as their bargain-ing representative. The Encore pilots have been living for years without legal standing in talks
with their management, and the time is now for the pilot group to experience the advantages of union representation.
All of these groups are benefit-ing from the strength of ALPA national’s vast resources, which are backing them every step of the way under the direction determined by their master executive council. F/O Kandy Bernskoetter (FedEx Express), ALPA’s new Membership Com-mittee chair, highlights in her column that every decision ALPA makes and every action we take
is about meeting our members’ needs (see page 8). Tolstoy’s mention of patience as the strongest
warrior holds true for ALPA’s efforts on FAA reau-thorization. While our union’s ultimate goal is to ensure a source of long-term, stable funding for the FAA, Congress has put in place a six-month ex-tension. We support the continuation of funding, but U.S. passengers, cargo shippers, and all who benefit from air transportation need a long-term reauthorization. Regardless of the timing, ALPA’s priority in FAA reauthorization remains the same—advancing our members’ safety, security, and pilot-assistance priorities.
Whether it’s donating to Pilots for Pilots or retweeting in solidarity with members on the informational picket line, determined ALPA pilots are themselves the strongest warriors in deciding and delivering on the goals of our union.
October 2017 Air Line Pilot » 5
PilotC mmentary
Cargo: Every Pilot’s ConcernBy Capt. Rich Hughey (FedEx Express), Chairman, ALPA President’s Committee for Cargo
I n August, ALPA hosted the Air Cargo Safety Symposium (see page 29). A literal “who’s who” of safety professionals participated, and I was
proud to see our union well represented, both in attendance and on discussion panels. We provid-ed our perspective to those in government and industry on how to manage the risks associated with cargo operations while listening to their
perspectives on the issues affecting us. It was beneficial for all, and I look forward to building on the conversations from this symposium.
This fact bears restating: Every pilot is a cargo pilot—which is one reason we continue to advocate one level of safety and security. On any given flight, we may not be 100 percent certain of what we’re transporting aboard our airplanes, but we should be 100 percent certain in know-ing what we aren’t transporting. Undeclared dangerous goods are a hazard for all commer-cial operations.
I’m honored to be teamed up with F/O Preston Greene (FedEx Express), vice chairman of the ALPA President’s Committee for Cargo. Preston is ALPA’s all-cargo security expert who pushes for airports to expand security identification display area (SIDA) access to include cargo operations in order to control access to cargo ramps and aircraft as well as strengthen cargo screening. He’s been outspoken in ALPA’s call to require security screenings for animal handlers, who frequently fly aboard cargo aircraft with hypodermic needles, tools, and other equipment that could be used against flight crews. Preston has led the charge to require installation of reinforced cockpit doors on all-cargo aircraft to afford cargo pilots a reactionary gap segregat-ing the flight deck against anyone on board who would do us harm.
The diverse cargo we carry requires us to re-think strategies regarding inflight fire suppres-sion. For many years, we relied on oxygen depri-vation and halon to suppress cargo hold fires, but items like lithium batteries are immune to such tactics. To mitigate the risk of lithium
battery fires, we continue to advocate a layered mitigation strategy via fire-suppression systems, fire-resistant cargo containers, and packaging to safeguard against this growing threat.
The nature of all-cargo operations requires us to fly at all hours of the day and night in and out of the same airports and in the same airspace as pilots flying passengers, yet cargo operations
don’t necessarily have the same level of services available. For example, requirements for aircraft rescue and firefighting don’t apply to all-cargo operations but should, with around-the-clock person-nel who are trained to handle a large volume and wide variety of
dangerous goods.The current FAR Part 121 regulation that
applies to cargo operations is outdated and inad-equate for what we now know about work, rest, sleep, fatigue, and human performance. Cargo pilots flying at night, who need science-based rules the most, are excluded on the basis of a flawed cost-benefit methodology. ALPA lauds Transport Canada for its foresight by including the all-cargo operational environment in its newly proposed science-based work-rest rules, raising the safety floor for all airline pilots in Canada.
I was recently asked to co-chair the Cargo Working Group of the Joint Implementation Measurement and Data Analysis Team of industry and government stakeholders who will review and study accidents, incidents, and the operational environment of all-cargo opera-tions. Clearly, the FAA and industry recognize the value of our perspective by not only having us at the table, but also leading the discussion on the future of the profession and indus-try we love.
Air cargo is a vital segment of the supply chain within commercial aviation. While we continue to enjoy the safest mode of transportation in the world, there are still ways to make it even safer and more secure in this time of robust economic growth (see page 21). By continuing to openly share our concerns and present our point of view on the issues affecting all-cargo pilots and operations, our message remains consistent: there should be just one level of safety and secu-rity for both passenger and cargo operations in the United States and Canada.
“This fact bears restating: Every pilot is a cargo pilot—which is one reason why we continue to
advocate one level of safety and security.”
6 » Air Line Pilot October 2017
PilotC mmentary
”ALPA’s history is full of negotiating accomplishments, and the union is confident that it will achieve more success in the next bargaining cycle....”
Continued Positive-Trend BargainingBy Capt. Phil Otis (United), Chairman ALPA Collective Bargaining Committee
A LPA master executive councils (MEC) face a rapidly changing environment in an increasingly complex world under the
Railway Labor Act. I’d like to update ALPA mem-bers on the Association’s Collective Bargaining Committee (CBC) and its work in support of our 33 negotiating committees (see page 32).
Our collective bargaining agreements provide the pay, work rule, benefit, and job security foundation for our daily work, our careers, and our families’ financial health and security, and I’m proud to be a contributor to our union’s suc-cess in these areas. As the CBC chairman, a pilot negotiator, and a former MEC status rep, I know our negotiations interconnect across pilot group lines, and I know that they really matter.
It’s an exciting time to negotiate pilot contracts, and substantial improvements are occurring dur-ing this negotiating cycle. Of course, there are still individual negotiations that aren’t progressing as smoothly as needed, and bargaining advances for some pilots still lag others—but overall the trend is positive, and we should continue our forward momentum. Let me tell you why I feel this way.
It was a long climb out of a deep hole following the mid-2000 bankruptcy-era negotiating cycle. Pay and benefits were diminished, jobs were lost, and favorable contract patterns fell apart. ALPA’s ongoing strategic planning initiatives, coordination between pilot groups, identification of developing contract patterns and goals, and corporate financial recovery helped mainline and cargo contracts begin to improve. The 2006 FedEx Express negotiations, the 2008 Delta/Northwest joint contract negotiations, and the 2010 United/Continental joint collective bargaining agree-ment, among others, were clear markers that an atypical concessionary cycle was ending. Recov-ery and improvements were evident elsewhere, too. Unfortunately, overcapacity and the restruc-turing of fee-for-departure carriers extended bargaining challenges for pilots in this segment of the industry.
The current positive five-year mainline and cargo bargaining cycle is even more widespread and robust than the last cycle, and the good news extends in some measure to all segments of the industry—albeit a little unevenly sometimes.
Contract improvements are now taking place in all segments of our profession due to indus-try consolidation, positive corporate financial results, a closer correlation between the number of jobs and the supply of pilots, and coordination of pilot pay and benefit goals across companies. Large pay increases, retroactive compensation, retiree benefit improvements, career-progression enhancements, continued profit sharing, and other gains are the obvious result. Negotiations at Delta, FedEx Express, Hawaiian, and United—along with ongoing negotiations at Endeavor Air, Frontier, JetBlue, and Spirit—are examples.
Another round of bargaining starts in 2020. Here’s a look at what ALPA, the CBC, and pilot ne-gotiating committees—backed by the Association’s professional negotiators and experts—are doing to consolidate and continue our positive rate.
The CBC is meeting regularly to identify, coordi-nate work on, and achieve enhanced cornerstone contract goals and favorable contract patterns over the next five and 10 years.
The annual CBC-sponsored ALPA Negotiat-ing Training Seminar, which takes place this month, ensures that new pilot negotiators are trained, practiced, and ready for the next round of bargaining. Approximately 70 pilot negotiators from almost all of ALPA’s pilot groups will receive instruction and take part in bargaining exercises and negotiation simulations.
ALPA continues its efforts to organize new pilot groups in the U.S. and Canada and continues to sponsor industry collective bargaining round-table meetings—even with pilot groups not repre-sented by ALPA—to ensure that everyone has the resources to succeed and to build pilot consensus on favorable pilot contract patterns.
The CBC is looking carefully at important issues for the future—new retiree health programs and retirement benefits, emerging family issues that will make the profession more attractive and help recruit new pilots, remotely piloted aircraft, and others.
With the current round of bargaining wind-ing down a bit, CBC pilot negotiators are making themselves available to other pilot groups to share their recent experiences.
ALPA’s history is full of negotiating accom-plishments, and the union is confident that it will achieve more success in the next bargaining cycle—and ALPA negotiators are excited to be a part of this effort.
October 2017 Air Line Pilot » 7
PilotC mmentary
Strengthening the Connection Between ALPA and Its MembersBy F/O Kandy Bernskoetter (FedEx Express) Chairman, ALPA Membership Committee
M aking connections that lead to content-ment and fulfillment is important in both our personal and professional lives. And
understanding how the Association works on our behalf can be that bridge some fellow pilots need to make such a connection with ALPA.
I believe that if pilots have a stronger understand-ing of the relevance and importance of ALPA, the connection between the union and its members, and the piloting profession, will strengthen—and that’s a goal of the Membership Committee.
When I was approached about leading ALPA’s Membership Committee, I knew it would be a challenge. I’ve been a Pilot Assistance volunteer for more than 12 years and at first didn’t see my connection to membership activities. But it quickly became clear how these past experiences benefit me in my new role.
I became involved in the FedEx Express Master Executive Council (MEC) Pilot Assistance Group in 2005. In 2015, I founded the Pilot Assistance Team Hotline (PATH), which helps connect mem-bers who have questions about physiological, psychological, and aeromedical issues with the appropriate subject-matter experts. The goals of ALPA’s Membership Committee complement Pilot Assistance work because both focus on providing support and referrals to our members.
My work with the committee is off to a good start, as the timing of my appointment aligned with ALPA’s recent Membership Committee Seminar. Attended by 34 volunteers, including both MEC officers and membership commit-tee volunteers, the seminar focused on member benefits, classifications, and obligations for both our U.S. and Canadian members. It was also an opportunity to discuss issues members are facing and exchange experiences and ideas. Updated new-hire presentations for both U.S. and Cana-dian groups were given, with a welcome video from Capt. Tim Canoll, ALPA’s president (see page 40). Over the next few months, I’ll be observing new-hire briefings at various ALPA pilot groups to explore ways to update materials and include key information.
The ALPA Furloughed Pilots Support Network (FPSN) and Veterans Affairs Committee fall under the purview of the Membership Committee. F/O
Drew Everett (Hawaiian), ALPA’s FPSN coordina-tor, is developing new materials so that we’re ready to support any pilot group facing a furlough event. The focus of ALPA’s Veterans Affairs Com-mittee is to help veterans who are transitioning to commercial aviation. The committee will be de-veloping materials to provide information about ALPA, the airline industry, and what to expect regarding pilot training and schedule bidding.
As a Women in Aviation International (WAI) member, I’ve seen the value in making connec-tions and mentoring others who are following in my footsteps. I recently attended the Organiza-tion of Black Aerospace Professionals (OBAP) conference for the first time and was impressed by OBAP’s history and inclusiveness (see page 42). Events such as the National Gay Pilots Association Diversity & Inclusion Summit, WAI and OBAP conferences, and EAA’s AirVenture in Oshkosh, Wis., provide ALPA an opportunity to network and promote the Association’s message and com-mitment to diversity and inclusion, which fulfils one of ALPA’s strategic goals.
The Association recently formed the Women’s Working Group, which has the overarching goal of identifying key issues associated with recruit-ing and retaining female airline pilots. The group is in the process of developing a survey and hold-ing focus groups to learn more about the issues that are important to female pilots across the industry. The group will collaborate with other ALPA committees to review and identify areas for improvement to help enhance the careers of female ALPA members and to help promote the piloting profession.
Watching a pilot’s career evolve is particularly rewarding. Many of the relationships I’ve formed as a result of my involvement and connection with ALPA’s Aviation Career Education clubs have continued well past the student’s graduation. It’s important to remember that the connections we form early in our careers could help develop the next generation of ALPA volunteers.
As a committee that falls under the Professional Development Group, the Membership Committee’s mission is detailed in the 2016 Board of Directors strategic plan. Using this plan, our course is charted to build unity and promote the benefits of ALPA membership both internally and externally. By making connections with our fellow members, I’m confident the committee will succeed.
“[I]f pilots have a stronger understand-ing of the relevance and importance of ALPA, the connection between the union and its members...will strengthen....”
8 » Air Line Pilot October 2017
GuestC mmentary
“Being a pilot is likely to be a great career again. Over the next decade, more than 21,650 pilots are due to retire, creating a major hiring spree at the top five U.S. air-lines.”
Outlook for the Airline IndustryBy Helane Becker, Managing Director and Senior Research Analyst, Cowen and Company
W e’re in the middle of an extended period of positive earnings for the airline industry, mostly due to lower jet fuel
costs. The industry has had seven years of net profits and mostly growing revenues; 2017 is expected to be another profitable year. Net in-come probably peaked in 2015, when U.S. airlines reported $25.6 billion on $168.9 billion of revenue for a margin of 15.2 percent. This is far superior to any prior cycle.
In our view, most of the improvement in net income has been due to lower jet fuel prices. Spending on jet fuel declined from the 2012 peak of $44 billion to last year’s $21.6 billion, a 51 percent savings. Airlines were profitable at higher jet fuel prices, and with oil down from approximately $110 per barrel to about $50, they aren’t keeping the $60 savings. The airlines passed approximately 33 percent on to their employees in the form of higher wage rates, approximately 33 percent to consumers in the form of lower ticket prices, and kept the remainder, although some airlines are doing their best to give some of that away, too.
We can’t ignore the positive effects of consoli-dation, but the decline in the number of airlines hasn’t resulted in the high fares many regulators and naysayers warned were coming. The fastest growing airlines are the ultra-low-cost airlines, and they’re growing more than 18 percent an-nually while the legacy airlines continue to grow in the low single-digit range. As a result of this spread, the ultra-low-cost carriers control 7 percent of industry capacity. Southwest Airlines is the largest low-cost airline with 22 percent of the market. Southwest thinks of itself as a low-cost carrier, and with its everyday low fares and free baggage policy, the airline can keep the rest of the industry honest.
This year started with higher labor and jet fuel costs, and we expected that fares would trend higher as a result. We anticipated margin pres-sure from higher costs until airlines took steps to raise ticket prices. Early in the year, we saw some higher fares, but airlines weren’t in a rush
to raise ticket prices, in part due to continued relatively low fuel costs. Around mid-year, we saw strong leisure demand, but corporate demand slowed, and airlines lowered fares to stimulate leisure travel.
As we look to the rest of this year, we see con-tinued price discounting, especially in Chicago, Ill.; Newark, N.J.; Denver, Colo.; and Houston, Tex., as United Airlines defends its domestic U.S. hubs from incursions led by ultra-low-cost airlines. Demand for air travel should be strong as fares are low and the U.S. economy is growing at a low single-digit rate. In addition, going into the December quarter, Thanksgiving, Christmas, and New Year’s are major leisure travel periods—and we don’t anticipate this year will be different.
We expect low fares to persist through at least mid-2018. In addition, we expect particular weak-ness in east Texas and south Florida. It will take time for these regions to recover from the Sep-tember hurricanes, and it’s unlikely that people
who don’t have roofs over their heads, or are
rebuilding after losing their worldly possessions, will travel.
We expect airlines to assess the dam-age to airports in the Caribbean and in
Florida and rebuild where needed in order to resume flights for the summer months.Finally, with jet fuel costs at current levels, the
industry’s largest cost item is once again labor. The airline industry has always been capital-in-tensive and labor-intensive. U.S. airlines continue to replace their older fleets with new aircraft that act as a hedge against higher jet fuel prices. In addition, new aircraft contribute to greater reli-ability, fewer maintenance events, and improved on-time performance. We believe reinvesting in the fleet and the product sends a positive message to employees that the airline is here to stay.
Being a pilot is likely to be a great career again. Over the next decade, more than 21,650 pilots are due to retire, creating a major hiring spree at the top five U.S. airlines. The opportunity for a great, well-paying career at these airlines should not be underestimated.
October 2017 Air Line Pilot » 9
Airline Industry News
> DOMESTIC NEWS
� Per the Los Angeles Times, the Transportation Security Administration gave airports approval in mid-September to begin testing a new model of scanner that creates a 3-D image of the contents of a bag through the use of computed tomography. This technology can speed more passengers through security checkpoints because the scanner displays the contents of a bag as a 3-D image on a screen that can spin 360 degrees to show the contents from every angle.
� Airline data company OAG reported that Delta Air Lines took the top spot for on-time arrivals in August. Despite dis-ruptions from Hurricane Harvey, Delta finished August with 83.8 percent of its flights arriving on time.
� According to the Associated Press, Chicago’s O’Hare Inter-national Airport will be home to a $7.4 million triple-deck, large-frame aircraft simula-tor that will help prepare first responders for rescues aboard superjumbo jets. The simulator and accompanying software will include a rotating cabin to simulate a jet that has broken apart.
� Boeing announced that it delivered its 600th B-787 Dreamliner in late September at its Everett, Wash., assembly plant. The 600th delivery comes less than a year after Boeing delivered its 500th Dreamliner to Colombian airline Avianca in December 2016, which marked the shortest amount of time a widebody program took to
reach 500 deliveries.
� CBS News reported that in mid-September all four runways at Los Angeles International Airport were once again fully operational following the com-pletion of runway safety area improvements begun in 2015.
� According to the Chicago Tribune, United Airlines CEO Oscar Munoz has pledged to donate up to $1 million of his own money to aid employees affected by Hurricane Harvey. In a letter to employees, Munoz encouraged his co-workers to contribute to United’s em-ployee relief fund and pledged to match up to $1 million in contributions.
> INTERNATIONAL NEWS
� Per China Daily, to meet passenger demand China will need 1,070 regional jets with 70 to 130 seats over the next 20 years, which would make it the third-largest regional avia-tion market after the United States and Europe, according to a report by aircraft manufac-turer Embraer SA.
� According to The Irish Times, Ryanair is canceling between 40 and 50 flights per day until the end of October to improve its ratio of on-time flights. The cancellations are designed “to improve its systemwide punctu-ality, which had fallen below 80 percent in the first two weeks of September,” the airline said.
� Reuters reported that Air France is proceeding with plans to launch a new lower-cost airline after receiving approval from the union that represents the majority of its pilots. Called Joon, the airline will launch this autumn, initially operat-ing medium-haul flights from Paris’s Charles de Gaulle Airport before beginning long-haul routes next summer.
� Qantas Airlines is com-mitted to flying the world’s longest nonstop flight between London, England, and Sydney, Australia by 2022, the airline’s CEO Alan Joyce told CNBC. The flight between the two cities will take 20 hours, reducing the current flight time by three hours, according to the airline.
� News in Flight reported
that Brazil’s government has approved a plan by American Airlines Group, Inc. to build a maintenance center at Sao Paulo’s Guarulhos Airport, a $100 million investment that will help American Airlines consolidate its South American operations. The maintenance center will consist of a $50 million two-bay hangar, with an additional $50 million spent on parts and tools.
� Qatar Airways Group Chief Executive Akbar al-Baker has been elected chairman of the board of governors of the Inter-national Air Transport Associa-tion, per Reuters. He will start his one-year term in June 2018, taking over from the current chairman, Singapore Airlines CEO Goh Choon Phong.
Front Lines \ DOT’s Norwegian UK
Decision Fails to Protect U.S. Airline Workers ALPA is disappointed by the U.S. Department of Transportation’s (DOT) decision to allow Norwe-gian Air UK (NAUK) to fly to and from the United States under the
Urge Congress to Maintain Aviation SafetyWith the legislative clock ticking and time running out, special-interest groups in Washington, D.C., like the Regional Airline Association, are trying to persuade Congress to put profits ahead of safety in the FAA reauthorization bill. Please participate in ALPA’s Call to Action and ask Congress to maintain current regulations regarding first officer qualifica-tion and training requirements.
Go to www.alpa.org/advocacy/first-officer-qualifications to make your voice heard.
U.S.–EU Air Transport Agreement (ATA) without knowing how the airline’s crews will be employed or whether its business model will affect U.S. jobs.
“The Trump administration’s decision to approve Norwegian Air UK’s application to serve the United States is another blow to
U.S. workers and doesn’t deliver on all the talk about defending U.S. jobs against unfair foreign competition,” said Capt. Tim Canoll, ALPA’s president.
While the employment model of NAUK, which is a UK airline, is not clear, related Norwegian Air companies are using pilots and
flight attendants who work under Asian employment contracts to lower labor standards. While NAUK will operate under UK labor law, the DOT failed to ask NAUK to disclose the terms of employment that would apply to its flightcrew members. Under the ATA, the DOT must evalu-
ate whether granting the NAUK application would be consistent with the public interest and with Article 17 bis, which states that the opportunities available under the agreement may not undermine labor standards.
“The fact that the Trump ad-ministration is saying one thing but doing another when it comes to defending fair competition drives home the urgent need for Congress to act to defend U.S. trade agreements and airline workers against foreign companies with anticompetitive business models in the future,” said Canoll.
The U.S. House of Representa-tives has introduced the Flags of Convenience Don’t Fly Here Act (H.R. 2150) expressly to direct the DOT to carry out its duty to apply a public-interest test, including a flags-of-convenience factor, to all foreign air carrier permit applications.
“By passing the Flags of Convenience Don’t Fly Here Act, lawmakers would make certain that the DOT’s future deci-sions encourage fair wages and working conditions and prevent foreign airlines’ anticompetitive practices from threatening U.S. jobs,” Canoll said.
\ DOT Likely to Announce New Opioid Screening for Airline Pilots Expanding U.S. airline pilot drug- testing procedures to include the screening for four kinds of opioid medications could be announced as early as the beginning of October, although the Department of Transporta-tion (DOT) informally reports that revised regulations may not be issued for a few more months. The DOT issued a notice of proposed rulemaking (NPRM) on Jan. 23, 2017, recommend-ing the addition of hydrocodone (Vicodin, Lortab, Norco, and others), hydromorphone (Exalgo ER), oxycodone (OxyContin,
Please remember to adhere to FARs or CARs and company
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Percocet, Percodan, and others), and oxymorphone (Opana ER) to the list of drugs airline pilots are tested for.
ALPA has long opposed random pilot drug and alcohol testing, citing the minuscule number of positive test results, the exorbitant cost of administer-ing the program, and the better approach of using such funding to further expand highly success-ful peer intervention programs like the Human Intervention Motivation Study (HIMS), which can more effectively address substance abuse and chemical dependency.
The NPRM was issued to provide stakeholders like ALPA a chance to comment, and the Association was quick to respond that in addition to its general ob-jection to testing, the proposed changes raise other concerns. Lacking clear guidance for the medical review officer (MRO) or affected pilots, the proposed language fails to define what a
legally valid prescription is. This omission and other flaws in the proposed rule could result in an MRO questioning a doctor’s course of treatment or an airline grounding a pilot pending inves-tigation. ALPA has also voiced serious concern with the current regulations that provide MROs with unreviewable authority in this regulatory scheme.
Opioid abuse and addiction have risen dramatically in the United States in recent years, likely contributing to this new policy proposal. DOT testing pro-tocols are outlined in 49 CFR Part 40 and are required to follow sci-entific guidelines set by the U.S. Department of Health and Hu-man Services. The DOT currently tests airline pilots for marijuana, cocaine, opiates, phencyclidine (PCP), and amphetamines.
Per Dr. Quay Snyder, ALPA’s aeromedical advisor, “A good rule of thumb pending specific guid-ance from the DOT is for a pilot not to use any personal narcotic
prescription more than 30 days after it’s been issued or for a dif-ferent condition than the original reason for the prescription. Using someone else’s prescription for narcotics is not legal.”
\ Encore Pilots Launch Representation CampaignIn mid-September, Capt. Tim Canoll, ALPA’s president, traveled to Toronto, Ont., to help kick off a card drive for the 450 pilots at Encore, WestJet’s wholly owned subsidiary. He gave a briefing on the state of the airline industry and provided the latest news about ALPA’s pilot groups.
“We really look forward to getting to know the Encore pilots better and ensuring that they have all the facts they need
about ALPA representation,” said Canoll. “We look forward to welcoming them into ALPA, just as we welcomed their brothers and sisters at WestJet in May of this year.”
This will be ALPA’s first cam-paign since Parliament amended the Canada Labour Code in June to repeal several antiunion mea-sures that made it difficult for employees to join a union.
\ Frontier Pilots Over-whelmingly Authorize StrikeIn early September, Frontier Airlines pilots told their leaders they’re ready to go on strike if a fair agreement can’t be reached at the bargaining table.
An overwhelming 100
Ready, Set, MobilizeIn the past weeks, we’ve seen ALPA members demonstrate their collective resolve with their votes, their voices, and their actions in demanding fair contracts in return for their critical
role in helping make their airlines successful.From informational picketing in De-
troit, Mich., and Las Vegas, Nev., a pilot rally in Boston, Mass., overwhelming pilot participation to authorize strike votes to nonunion pilots’ launching a campaign for representation, ALPA pilots in the United States and Canada have left no doubt that they’re determined. Pilots have earned—and deserve—a fair contract and enhanced quality of life, and they each make indi-vidual choices to take action to unify the entire profession.
And no matter what form unity takes, each step is a thoughtful tactic that fits into the overall strategic plan of each ALPA pilot group, which ultimately furthers the Association’s goal of representing our pilots and defending their interests. This strategy is developed, discussed, and refined during important information sharing and discus-sions among pilot leaders with assistance from ALPA’s expert staff.
The Representation and Economic & Financial Analysis (E&FA) Departments, sup-ported by all other ALPA departments, work closely with negotiating committees during contract negotiations. They provide exten-sive and pertinent financial information, identify trends in pattern bargaining, evalu-ate the global economy and market influenc-ers, and conduct U.S. and Canadian industry analysis to assist pilot leaders in making the most well-informed decisions possible for
their pilots. You’ll find E&FA’s most recent analysis of the state of the North American airline industry on page 21 of this issue.
Each pilot group sets its course of action relying in part on the information pro-vided by ALPA’s Representation and E&FA subject-matter experts and based on the strategic direction set by the pilots. You can read about the mobilization efforts of the pilots of Air Wisconsin, ExpressJet, Frontier, Jazz, JetBlue, Spirit, and WestJet (see pages 12–16) and the obstacles they face while negotiating fair contracts with some of the most challenging airline managements we’ve encountered in recent years.
With ALPA members standing strong together, backed by the Association’s professional and dedicated staff members, these mobilization efforts are sure to have positive outcomes.
Capt. Tim Canoll, left, ALPA’s president, listens as Capt. Dan Adamus (Jazz Aviation), ALPA Canada president, second from left, addresses the Encore pilots..
percent of the pilots voted to authorize their elected union representatives to lawfully call a strike if contract talks don’t result in a new collective bar-gaining agreement.
“This vote shows the deep anger our pilots feel toward the direction set by our manage-ment,” said Capt. Tracy Smith, the pilot group’s Master Executive Council chairman. “We’re the lowest-paid Airbus pilots in North America, but that pitiful status is definitely going to change.”
To go on strike, the National Mediation Board (NMB) must first decide that additional mediation efforts wouldn’t be productive and extend an offer to arbitrate the dispute. If either side declines arbitration, the parties enter a 30-day “cooling-off” period. After that time, they’re free to exercise self-help—a strike by the pilots or a lockout by the company.
The pilots’ contract became amendable in March 2017. The union and the company began contract talks in March 2016 and have been working with an NMB mediator since October 2016.
In related news, an arbitrator ruled in September that the air-line violated a 2011 contractual commitment to negotiate a pay increase in 2016 when the then-struggling airline was in danger of going out of business.
The arbitrator ordered Frontier to open negotiations on pilot pay as it had promised to do under the terms of a 2011 letter of agreement (LOA) known as LOA 67. The LOA 67 negotiation is separate from Frontier’s ongoing contact negotiations with the pilots.
“The arbitration decision confirms what we’ve known all along: that Frontier management has violated LOA 67 through its failure to bargain in good faith over further upward pay adjustments due to our pilot group,” said Smith. “In his award, the arbitrator has ordered the
company to bargain in good faith to establish new pay rates pursu-ant to the requirements of LOA 67, and has made it clear that he believes this process can be concluded within 45 days.”
Under the terms of LOA 67, pilots agreed to sacrifice $53 million in pay and benefits to save the carrier from another bankruptcy or possible liquida-tion. In testimony before the arbitrator, former Frontier CEO Bryan Bedford acknowledged that Frontier couldn’t have been restructured without the partici-pation of the pilots.
In exchange, the airline agreed to open negotiations on upward pay adjustments when the airline became financially stable and was making profits of 5 percent or more. However, even after Frontier began earning double-digit profits it refused to open talks on pilot pay, citing unfavor-able business conditions, even as it paid $273 million in dividends to executive management and private-equity investors and other bonuses to management employees.
The arbitrator’s ruling doesn’t mean that the higher pay rates that ALPA proposed for the interim period will be imple-mented automatically. Rather, the company is obliged to make a wage proposal consistent with its obligation to bargain in good faith over wage increases. Nego-tiations began on September 12.
\ Spirit Pilots Picket to Show Resolve for Attaining New ContractIn late September, Spirit Airlines
pilots picketed at Detroit Metro-politan and McCarran Interna-tional Airports to demonstrate their collective commitment for attaining a contract that reflects their contributions to the overall success of the airline.
“Our goal remains to negoti-ate a contract that protects both the work and the welfare of our pilots,” said Capt. Stuart Mor-rison, the pilots’ Master Executive Council chairman. “No one is more committed to the success of Spirit Airlines than our pilots, and it’s time for management to come to the table prepared to negotiate a contract that fairly reflects that commitment.”
Earlier in September, the pilot group sent a strong message to management with a 100 percent vote in favor of conducting a lawful strike once the National Mediation Board (NMB) releases them from negotiations.
“Spirit pilots absolutely do not want to go on strike. However, as this strike authorization vote un-equivocally shows, we’re willing to take any lawful steps neces-sary, including a legal strike, to achieve the contract every Spirit pilot has earned,” said Morrison.
If and when the NMB decides that additional mediation ef-forts won’t be productive, it can extend an offer to arbitrate the dispute. If either side declines arbitration, the parties enter a “cooling-off” period and are free to exercise self-help—a strike by the pilots or a lockout by the company—30 days later. Spirit pilots would legally be able to strike once the 30-day cooling-off period expires.
“This vote shows the unity of our pilots and our dedica-tion to reaching a deal with management that reflects our contributions to Spirit Airlines,” commented Morrison.
\ WestJet Pilots Begin Negotiations for First-Ever Collective Agreement WestJet pilots met with members of management in early Septem-ber for scheduled contract nego-tiations, marking the first official labour negotiations under the Canada Labour Code in the his-tory of the airline. WestJet pilots are currently the only unionized workforce at the airline.
“About five months ago, WestJet pilots voted to speak with a collective voice by joining the Air Line Pilots Association. Today marks a new high-water mark for the WestJet pilots as we formally begin negotiations for our airline’s first collective agree-ment with our pilots,” said Capt. Rob McFadyen, the pilots’ Master Executive Council chairman. “We look forward to productive talks that resolve our mutual concerns while continuing to build a constructive relationship with WestJet’s management team.”
Capt. Tim Canoll, ALPA’s presi-dent, commented, “As we often see in Canada, labour agreement negotiations move at a fast pace, which we expect will continue here as well. By coming to the table prepared and engaging in frank, open discussions, the par-ties can build an agreement that ensures WestJet remains a career airline for Canadian aviators.”
WestJet, headquartered in Calgary, Alb., is Canada’s second-largest airline with more than 1,400 pilots based in Calgary; Toronto, Ont.; and Vancouver, B.C. WestJet pilots operate an average of 425 flights per day with service to 100 destinations in Canada, the United States, Europe, Mexico, Central America, and the Caribbean.
Spirit pilots participate in informational picketing at Detroit Metropolitan Airport to demonstrate their resolve for achieving a fair contract.
October 2017 Air Line Pilot » 13
» Front Lines
\ Hundreds of JetBlue Pilots Rally in BostonMore than 300 JetBlue pilots rallied in support of “Contract Above All” in Boston, Mass., on September 20. Capt. Tim Canoll, ALPA’s president, commented on the size and energy of the crowd as he reassured the pilots that they have the full support of all ALPA pilots and access to the union’s unmatched resources. The group also heard from Capt. Patrick Walsh, the pilots’ Master Executive Council chairman; Capt. Brian Dawson, the pilots’ Strategic Preparedness and Strike chairman; and Capt. Jeff Harbison, the pilots’ Negotiating Committee chairman.
JetBlue pilots have been in ne-gotiations for two and half years and entered into talks facilitated by the National Mediation Board
in July 2017. In December, they’ll mark 1,000 days since negotia-tions opened.
“These rallies are not just an opportunity for us to communi-cate with our pilots, but a chance to show our company that every JetBlue pilot is ready for this fight,” said Walsh. “From the ne-gotiating table to the picket lines, JetBlue pilots will be putting con-tract above all to get a market-rate contract that recognizes how we’ve contributed to the success of the airline.”
Earlier in the month, the pilots’ MEC leaders held a special meeting in New York City, N.Y., to discuss negotiations and review communications strategies ahead of the Boston rally. The pilots began mediated negotiations in August and have two more scheduled sessions
this year. During the meeting, Phil Comstock of Wilson Polling updated the group on polling, and ALPA’s Economic & Finan-cial Analysis Department gave
an overview of the state of the airline industry. The pilots, who are ramping up their communi-cations efforts, also received a presentation from ALPA’s Com-
JetBlue pilots prepare to rally in Boston, Mass., to show their determination for achieving a market-rate contract that reflects the contributions they’ve made to the airline.
ALPA’s Pilot Resources at Your FingertipsAs a member of the Air Line Pilots Association, Interna-
tional, you have access to some of the best pilot resources
in the business, ranging from ALPA’s Aeromedical Office,
ALPA’s Incident/Accident Hotline, ALPA insurance, Pilots for
Pilots, and ALPA apps—including the Part 117 calculator and
guide—to information on career progression, the Known
Crewmember program, jumpseat policies and procedures,
what to do if you’re lased in flight, and so much more. Visit
www.alpa.org/resources for a list of resources available to
munications Department on how best to get their message out.
\ ExpressJet Pilot Leaders Approve Agreement for Industry Experience CreditExpressJet Airlines pilots reached a tentative agreement with management in late August on a new program that will allow current ExpressJet pilots (Atlantic Southeast Airlines pilots and legacy ExpressJet pilots) and new-hire applicants with similar experience at other carriers to count previous years of service toward their total longevity at ExpressJet.
“This agreement recognizes the vast professional experience that pilots bring to ExpressJet Airlines and allows them to transfer up to 10 years of indus-try experience they obtained at previous carriers,” said Capt. Dave Allen, the ExpressJet pilot
group’s Master Executive Council (MEC) chairman.
“We anticipate this agreement will encourage prospective pilots to apply to ExpressJet,” said Capt. Chromer Smith, the Atlantic Southeast pilots’ MEC chair-man (SkyWest Inc., the parent company of Atlantic Southeast, purchased ExpressJet in 2010).
Per the program, � pilots will be able to count up to 10 years of previous experience at FAR Part 121 carriers for purposes of hourly pay according to the specific equipment and status.
� previous experience will be counted toward benefits such as the 401(k) match, defined contributions, and vacation accrual. Applicants must have parted from their prior employer in good standing and have at least one year
of equivalent experience in order to qualify.
� current ExpressJet/Atlan-tic Southeast pilots who’ve previously separated in good standing from a Part 121 car-rier will receive the benefits of this agreement upon date of signing.
\ Jazz MEC Signs Agreement Protecting New-Hire Pilots’ SeniorityCapt. Claude Buraglia (Jazz Avia-tion), his pilot group’s Master Ex-ecutive Council (MEC) chairman, joined management in Thunder Bay, Ont., in mid-September to sign a new letter of understand-ing (LOU) that introduces the concept of “seniority portabil-ity” for Bearskin and Wasaya pilots who are hired through the Jazz Aviation Pathway Program (Jazz APP).
The MEC felt that the terms of the original Jazz APP agreements signed in 2016 with Wasaya and earlier this year with Bearskin would be disadvantageous to pilots at those airlines moving to Jazz, and Jazz management agreed. As a result, this new LOU ensures that pilots at both airlines will be able to carry certain aspects of their seniority (only for the purposes of bidding position, schedule, and vacation) with them if they move to Jazz in accordance with the Jazz APP application process.
“We’re pleased to reach an agreement with the company that will protect all pilots at Bearskin and Wasaya who wish to come to Jazz in the future,” said Buraglia.
\ Air Wisconsin Renews Flying as United Express CarrierAir Wisconsin pilots returned to flying under the United Express banner in early September after more than a 10-year absence.
Legislative Update
House Approves Bi-partisan Amendment To Improve Airport Perimeter SecurityIn mid-September, the U.S. House of Representa-tives adopted a bipartisan amendment offered by Reps. Eric Swalwell (Calif.-15) and Brian Fitzpatrick (Pa.-08), provid-ing $10 million to study improvements for airport perimeter security in Fiscal Year 2018.
The amendment to the Homeland Security provi-sion of H.R. 3354 provides for research, analysis, and testing of airport perimeter intrusion technology. The spending is offset by a reduction in the Depart-ment of Homeland Security Office of the Secretary and Executive Manage-ment account. Since 2004, more than 268 perimeter security breaches have been reported at U.S. airports that, together, handle three-quarters of U.S. airline traffic.
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1. Title of publication: Air Line Pilot2. Publication number: 0002-242X
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16. Publication of Statement of Ownership—Publication required—Published in October 2017 issue.
I certify that all information furnished on this form is true and complete. I understand that anyone who furnishes false or misleading information on this form or who omits material or information requested on the form may be subject to criminal sanctions (including fines and imprisonment) and/or civil sanctions (including civil penalties).
The airline announced the new agreement with United Airlines earlier this year.
Air Wisconsin’s first revenue flight for United took off from
Virginia’s Norfolk International Airport to Washington Dulles In-ternational Airport on September 6. The airline plans to open pilot bases at Dulles and Chicago’s
O’Hare International Airport, both hubs for United, later this fall. At the same time, the airline will gradually phase out its flying as an American Eagle carrier by February 2018.
“Air Wisconsin pilots have a long and proud history provid-ing quality regional service to several mainline carriers, including American Airlines and US Airways,” said Capt. Chris Suhs, the pilot group’s Master Executive Council chairman. “But United was our first mainline partner, and we’re excited to renew our long-term relation-ship with United as a United Express carrier. For some of us at the airline, today’s flight feels as though the company is returning to it roots.”
Under the new United Express agreement, Air Wisconsin pilots now have access to a career pathway program that will give pilots access to jobs at United if they meet the airline’s hiring standards and other conditions.
“While each airline’s operation differs, the professional pilots of
Air Wisconsin remain a constant. Our priority is a safe and secure flight, with each and every takeoff and landing. And the pilots will ensure that continues during our transition to United,” Suhs said.
\ P4P Issues First Set Of Grants for Recent HurricanesThe Pilots for Pilots (P4P) board of directors held a pair of meet-ings in September to approve the first two rounds of grant ap-plications related to Hurricanes Harvey and Irma—with most of the pilots already receiving the funds they requested.
“I can’t thank enough the ALPA pilots who have stepped up with donations,” said F/O Mark Segaloff (United), the P4P president. “Be-cause of you, we’ve been able to help so many members in need of assistance. Your donations are already in the hands of your colleagues, helping them rebuild their homes and their lives.”
P4P provides grants to ALPA members to cover the immedi-ate and extraordinary ex-
Air Safety Organization UpdateASO Trains Future Accident Investigators
Twenty-one pilot safety representatives from 11 airlines gathered at ALPA’s Confer-ence Center in Herndon, Va., in mid-Sep-tember to take part in ALPA’s Air Safety Organization (ASO) Acci-dent Investigation Course. “Every one of our 57,000 members is a safety advocate,” said Capt. Joe DePete, ALPA first vice president and national safety coordinator, who thanked the pilots for their time and participation. “It’s really our primary job as pilots—the safety of our passengers. So when government or industry representatives see that ALPA is in the room, they always ask and respect our insights on the issues, because they know our members
are the leaders in aviation safety.” Capt. Michael Wickboldt (Spirit), the
course director, stated, “Your role when working with the NTSB or the Transportation Safety Board of Canada is to bring the line-
pilot perspective to the investigation. This is what makes us uniquely qualified to assist in their efforts. Because when the unthink-able happens to our fellow pilots, everyone involved is on the same team and has the same goals—to identify any safety issues and make recommendations to keep these
events from happening again.” The four-day course covers
topics such as accident notifica-tion and dispatch to the site, the resources available from various ALPA departments, investigative agency policies, membership in various investigative groups, bloodborne pathogen precautions, representation of flight crews, the use of Critical Incident Response Program resources, and respond-ing to international investigations.
Pilot representatives participate in ALPA’s Accident Investigation Course.
InMemoriam“To fly west, my friend, is a flight we all must take for a final check.”
AUTHOR UNKNOWN
2016F/O Raymond A. United March Malacarne Capt. Lawrence V. Irsik MarkAir AprilCapt. Richard R. Davis United December
2017Capt. Donald F. Rainbow Kelowna January Flightcraft Capt. Allan C. Vasterling TWA FebruaryCapt. Stephen R. Barnes United MarchCapt. Howard W. Bailey United AprilS/O T.J. Bigelow Eastern AprilCapt. Russell T. Copeland Delta JulyCapt. G.R. Edberg Eastern JulyCapt. Herb F. Kerr, Jr. Delta JulyCapt. Tyshara D. Murrell Endeavor Air JulyCapt. Richard E. Pan American July Phenneger Capt. Harvey D. Sheren United JulyCapt. Peter V. Vinsant Northwest JulyCapt. George W. Weller III Eastern JulyCapt. Richard V. Adams US Airways AugustCapt. Marty C. Berg United August
Capt. H.T. Carter Delta AugustCapt. Robert L. Cassedy Delta AugustCapt. Trulan A. Eyre Delta AugustCapt. Bradley J. Herron United AugustCapt. Donald R. Leatham Northwest AugustCapt. Ronald A. Lord Delta AugustCapt. C.H. Quinn Delta AugustCapt. Alvaro D. Romero United AugustCapt. Terry R. Saul Northwest AugustCapt. Joseph H. Schulz United AugustCapt. John R. Sellmer Delta AugustF/O John T. Skinner Flying Tigers AugustCapt. Wescot B. Stone Delta AugustCapt. D.P. Stratton Eastern AugustCapt. Robert L. Tilton FedEx Express AugustF/O Vincent J. Uryc Envoy Air AugustF/O Brian T. Ward United AugustCapt. Jack Wiesbrock TWA AugustCapt. Lloyd F. Wittenburg Delta AugustCapt. Clyde B. Hudson Eastern SeptemberCapt. Flavio Pavone Jazz Aviation SeptemberCapt. Joseph R. Petersen Alaska SeptemberCapt. Wayne Van Eastern September Valkenburgh
Compiled from information provided by ALPA’s Membership Administration Department.
16 » Air Line Pilot October 2017
penses that follow widespread, catastrophic events and helps expedite the recovery process, allowing ALPA families to return their lives to some semblance of normalcy.
Some of the covered costs include
�medical expenses not covered by insurance,
� temporary housing not cov-ered by insurance,
� debris removal from primary residence not covered by in-surance,
� repairs to primary residence not covered by insurance,
� relocation expenses,
� transportation or evacuation expenses,
� replacement of medical
equipment, vehicles, or other personal property not covered by insurance,
� temporary child or elder care,
� travel expenses including air-fare, meals, and lodging, and
� counseling.
To apply for a grant, make a do-nation, or get more information, go to www.alpa.org/relieffund.
\ United Pilots Deliver Smiles to Kids in NeedUnited Airlines pilots in Denver, Colo., recently conducted a spe-cial Pilots For Kids (PFK) event for the children of Families First—a local shelter that serves kids who are victims of abuse, neglect, and trauma and one of the five chil-dren’s shelters that the Denver United pilots have sponsored for more than a decade.
Longtime Families First coor-dinator Capt. Jolanda Witvliet led the effort, which included a tour of the Wings over the Rockies aviation museum, a flight training center simulator experience, lunch, and a crowd-pleasing balsa wood airplane fly off. The United pilot volunteers, F/Os Missy Phil-lips, Mark Bomber, Erik Phillips, and Ashley Ogden and Capts. Jeff Lewis, Dave Chancellor, and Witvliet, were happy to work with Families First to provide a once-in-a-lifetime experience that these severely in-crisis children could normally only dream about.
This event was hosted by United Council 33, but Pilots For Kids is an international, nonprofit organization that’s been dedi-cated to helping hospitalized children for more than 24 years. All ALPA pilots are encouraged to get involved.
For more information, visit www.pilotsforkids.org.
ALPA Negotiations UpdateThe following is a summary of the status of ALPA contract negotia-tions by airline as of September 26:
Air Georgian—A notice to bargain was sent on Feb. 22, 2017. Nego-tiations to be scheduled.
Air Transport International—A Section 6 notice was received on Dec. 5, 2014. An application for me-diation was filed on July 21, 2017, and meetings will be scheduled.
Air Wisconsin—A Section 6 notice was filed on Oct. 1, 2010. Air Wis-consin filed for mediation on June 17, 2013. Pilots and management reached a tentative agreement on Aug. 4, 2015. The pilots rejected the tentative agreement on Oct. 7, 2015. Mediation continues.
Frontier—A Section 6 notice was filed on Dec. 3, 2015. An ap-plication for mediation was filed on Sept. 22, 2016. Mediation continues.
Jazz Aviation—A notice to bargain was filed on March 28, 2016. Nego-tiations are under way.
JetBlue—A Section 6 notice was filed on March 2, 2015. Negotia-tions continue.
Spirit—A Section 6 notice was filed on April 28, 2015. Mediation continues.
Virgin America—A notice to bargain was filed on Jan. 11, 2016. Negotiations were suspended due to the merger with Alaska Airlines. Arbitration continues.
WestJet—A notice to bargain was filed on June 6, 2017. Negotiations continue.
New ALPA Reps
As of August 29, the Election Ballot and Certification Board (EBCB) certified elections results for the following local councils:
• WestJet 230 Capt. David Colquhoun, Chairman (Capt. Rep)
• WestJet 230 F/O Roman McLellan, Vice Chairman (F/O Rep)
• WestJet 230 F/O Michael Taylor, Secretary-Treasurer
• WestJet 234 Capt. Don Pardiac, Chairman (Capt. Rep)
As of September 8, the EBCB certi-fied elections results for the follow-ing local council:
• First Air 240 F/O Christian Smith-eram, Vice Chairman (F/O Rep)
The Human Intervention Motivation Study (HIMS) is a proven, peer-based alcohol/substance abuse assistance program for airline pilots. ALPA HIMS is part of the Association’s Air Safety Organization Pilot Assistance Group.
SPOT THE SIGNS Irregular work attendance.
Declining work performance.
Changes in personal appearance.
Mood swings.
Unusual behavioral patterns.
Withdrawal from normal responsibilities.
Relationship and family strife.
The above is not a comprehensive list. Please visit www.HIMSprogram.com for assistance and to learn more. Click the Get Help Now tab, followed by the Pilot Referral Info link.
Aviation Insignia of the United States of AmericaBy Capt. Stan Baumwald (Northwest, Ret.) with Joe Weingarten
A fter maintaining a website that resembles a museum on the Internet (www.stanwing.com/catalog_index.html), Stan Baumwald
was finally convinced to publish a book depict-ing the insignia worn by airline pilots and flight attendants in the United States. Often compared to an encyclopedia, Aviation Insignia of the United States of America is organized in alphabetical order and includes the years a particular emblem was worn and details about the airline. The book highlights wings from more than 900 airlines, fixed operators, and other agencies. You truly get a feel for the history of commercial aviation in America.
Badges for aviation started in 1913 when the U.S. Army issued the first ones to its pilots. Only about three dozen were made, as the Army believed that number would be enough. World War I found nations building large air armies, and the pilots coming home continued
to fly—and soon the airline industry came into being. Some of these pilots worked for the Post Office, providing faster mail delivery, and many commercial pilots wore the U.S. airmail wing. Today, airline pilots and crews still proudly wear their wings.
Now in its sixth edition, Aviation Insignia of the United States of America includes more wings and badges—most of which are from Baumwald’s personal collection, likely the most complete col-lection in the world.
While the book focuses on insignia from U.S. airlines, it also covers government agencies, corpo-rate flight departments, and the U.S. military. The book contains more than 900 entries and more than 4,000 color photos.
As with any endeavor like this, the information is difficult to keep up to date and will never be complete. However, the website is constantly be-ing updated while the book is also revised as new printings are warranted.
—Reviewed by Capt. John Whitehead (FedEx, Ret.)
Publisher: 1903 press, www.1903.com
Pages: 410
Available at: www.1903.com (Item BK-2-6) and Amazon.com
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Ultra-Low-Cost CarriersUltra-low-cost carriers (ULCCs) in the United States have benefited from pretax margins well above industry average that have allowed them to continue strong growth patterns. Allegiant Air, Frontier, and Spirit are the major U.S. ULCCs. The domestic market share of these three carriers, as measured by available seat miles (ASMs), has increased at a rapid pace since 2010. In 2017, ULCC domestic ASMs made up approximately 7.6 percent of the market based on scheduled capacity, compared to just 1.8 percent in 2010. Legacy carriers represent approxi-mately 59.7 percent of the domestic market in 2017, based on scheduled capacity, compared to 67.4 percent in 2010.
During the past few years, ULCCs have gained domestic market share in the U.S. as a result of a number of key factors. First, the overall U.S. travel market continues to grow at about 3–4 percent in excess of gross domestic product levels (about 2 percent), which has allowed ULCCs to enter smaller markets to capitalize on this growth and stimulate new demand for air travel by offering lower fares. Secondly, ULCCs have a cost advantage over their peers by using single fleet types, denser aircraft configuration, higher air-craft utilization levels, and lower labor costs. This cost advantage permits these airlines to compete in markets that would other-wise be unprofitable for larger
legacy carriers. Finally, as a result of low financing costs and reduced lease yields, ULCCs have been able to readily acquire new aircraft to support their substantial capacity growth.
While ULCCs have been a force in the domestic market for a number of years, long-haul low-cost carriers (LCCs) such as Norwegian Air and WOW Air are now posing a threat to legacy carriers in the international market. Since 2014, long-haul LCCs have experienced relatively rapid capacity growth, particularly in the Atlantic market. Currently, long-haul LCCs represent approximately 10 percent of total North Atlantic seat capacity from the EU with more growth planned for 2018. The growth of long-haul LCCs could have an effect on legacy carriers’ profitability, as a sizeable percentage of each carrier’s capacity is in
the transatlantic market. U.S. legacy carriers are beginning to respond to the long-haul LCC threat by further segmenting cabin space. These legacy carriers are considering implementing basic economy fares and are focusing more on premium passengers and updating their product offerings. Although long-haul LCCs do pose a threat, U.S. legacy carriers are currently focusing more on the competition they’re facing from domestic ULCCs.
A strong economy, a less-volatile fuel environment, and industry consolidation have resulted in a more sustained level of profitability for legacy carriers. As such, the stronger financial performance of legacy carriers, along with the growth in domes-
tic market share by ULCCs, has resulted in legacy carriers focusing more on compet-ing aggressively with ULCCs through both pricing (i.e., fare wars) and capacity growth. Given the increased competi-tion between legacy carriers and ULCCs, it appears ULCCs are moderating their growth plans based on the schedules recently released for the remainder of 2017. Even this moderated growth, however, is well above the growth rates for mainline legacy carriers.
MARKETWATCHAIRLINES PARENT COMPANY STOCK SYMBOL 8/31/2016 8/31/2017 % CHG.
Air Transport International Air Transport Services Group, Inc. NASDAQ: ATSG $14.48 $22.96 58.56%
Air Transat Transat A.T., Inc. TSX: TRZ.B $6.50 $9.20 41.54%
Jazz Aviation Chorus Aviation, Inc.1 TSX: CHR.B $5.99 $8.27 38.06%
Bearskin, Calm Air Exchange Income Corporation6 TSX: EIF $34.36 $33.26 -3.20%
Hawaiian Hawaiian Holdings, Inc. NASDAQ: HA $46.98 $42.85 -8.79%
Spirit Spirit Airlines, Inc. NASDAQ: SAVE $39.99 $34.05 -14.85%
1 Chorus Aviation, Inc. announced a monthly dividend of $0.04 per Class A and Class B shares for August on Aug. 22, 2017.
2 FedEx Corporation declared a quarterly cash dividend of $0.50 per share on Aug. 18, 2017.
3 Delta Air Lines declared a quarterly dividend of $0.305 per share on Aug. 9, 2017.
4 SkyWest, Inc. declared a quarterly dividend of $0.08 per share on Aug. 9, 2017.
5 Alaska Air Group declared a quarterly cash dividend of $0.30 per share on Aug. 4, 2017.
6 Exchange Income Corporation declared eligible dividends totaling $0.175 per share for the month of August on Aug. 17, 2017.
U.S. Domestic Capacity Growth for ULCCs: 2014 to 2017F
CARRIER
2014 Domestic Capacity
Y/Y
2015 Domestic Capacity
Y/Y
2016 Domestic Capacity
Y/Y
2017F Domestic Capacity
Y/Y
Allegiant 9.7% 18.5% 16.9% 10.1%
Frontier 11.2% 21.1% 30.8% 18.2%
Spirit 19.2% 33.2% 20.1% 20.7%
Source: OAG and ALPA Economic & Financial Analysis Department analysis
1.8%
30.9% 67.4%
7.6%
32.6% 59.7%
ULCCs LCCs Legacy Carriers
U.S. Domestic Market Share 2010 2017
Allegiant, Frontier, and Spirt Alaska/Virgin America, Hawaiian, JetBlue, and Southwest
American, Delta, and United
Source: OAG and ALPA Economic & Financial Analysis Department Analysis
20 » Air Line Pilot October 2017
Air Line Pilot Feature Article » STATE OF THE INDUSTRY
The State of the North American Airline IndustryBy ALPA Economic & Financial Analysis Department Staff
Note: The data used in this article do not reflect the impact of Hurricanes Harvey and Irma on the financial performance of the airlines nor the impact to fuel prices going forward. In addition, as this issue went to press, Frontier Airlines had not yet released data for the second quarter, so the airline isn’t included in the industry results.
Amidst rising fuel prices and higher labor costs, North American pas-senger airlines’ overall profitability
declined in the first half of this year. While publicly traded U.S. passenger air-lines earned nearly $9.7 billion in pretax profits through the first half of 2017, this was down from the almost $12.3 billion earned over the same time last year. However, perhaps the most notable event this year is that, for the first time since the December quarter of 2014, U.S. carriers experienced a year-over-year improve-ment in PRASM (passenger revenue per available seat mile) in the second quarter of this year.
U.S. ECONOMIC INDICATORS REMAIN STRONGWhile real gross domestic product (GDP) in the first quarter of this year grew only 1.2 percent, the U.S. economy rebounded in the second quarter and registered a 3.1 percent annualized growth rate (see Figure 1, page 22 ).
Consumer spending, which accounts for about 70 percent of the economy, grew 3.3 percent in the second quarter, after increasing 1.9 percent in the first quarter.
The U.S. economy just recorded its 97th month of growth since the Great Reces-sion, making it the third-longest economic expansion in U.S. history—behind the tech boom of the 1990s (120 months) and the growth experienced in the 1960s (106 months).
During the next two years, the U.S. economy is projected to grow at a similar
rate to what has been seen over the past several years, with the International Mon-etary Fund (IMF) forecasting GDP growth of 2.1 percent in 2017 and 2018.
The unemployment rate continues to fall. Unemployment stood at 4.7 percent at the end of 2016 and as of the end of August had declined to 4.4 percent.
Through August, the economy added 1.4 million jobs, somewhat less than the 1.55 million jobs added over the same time in 2016. While wages have started to rise, the pace of wage growth is still low. Through the first eight months of this year, hourly wages were up about 2.6 percent com-pared to the first eight months of last year.
Many economists, including members of the Federal Reserve, believe that a healthy rate of growth for wages should be between 3 percent and 3.5 percent a year.
Due to consumers’ more favorable outlook for their own personal financial prospects, the consumer sentiment for the first eight months of this year was higher than in any year since 2000, which was the peak year of the longest economic expansion in U.S. history. Overall, the data point to gains of 2.4 percent in real consumer expenditures during 2017.
GLOBAL ECONOMIC ACTIVITY ACCELERATESAfter a lackluster 2016, the expected pick-up in economic activity remains largely on track. According to the Organization for Economic Cooperation and Develop-ment (OECD), all 45 countries tracked by the OECD are projected to grow. This will
be the first time since 2007 that all are growing at the same time.
The IMF is projecting global GDP to grow 3.5 percent this year and 3.6 percent in 2018 (see Figure 2, page 22). While the overall forecast has not changed from ear-lier this year, the unchanged global growth projections mask somewhat different con-tributions at the individual country level.
U.S. growth projections were revised downward, primarily reflecting the as-sumption that fiscal policy will be less expansionary than previously anticipated. Growth has been revised upward for Japan and especially the euro area, where positive economic activity in late 2016 and early 2017 showed solid momentum. China’s growth projections have also been revised upward, reflecting strong first quarter 2017 growth and expectations of continued fiscal support.
The risk factors affecting economic pro-jections remain skewed downward in the medium term. The combination of rich market valuations and high governmental policy uncertainty raise the likelihood of a market correction, which could dampen growth and confidence. China’s reliance on economic growth through increased credit comes with rising downside risks to medium-term growth. In addition, threats of a turn toward inward-looking policies could limit global trade and reduce demand for business travel. And geopolitical risks continue to remain salient downside risk factors.
Trending Positive but Threats Loom on the Horizon
October 2017 Air Line Pilot » 21
JET FUEL PRICES INCREASEFor the first half of the year, publicly traded U.S. passenger airlines saw their fuel bill increase $1.9 billion from last year. While some of this increase is due to a 3.4 percent higher use of fuel, the bulk of the increase can be attributed to higher jet fuel prices. Compared to the first half of 2016, the average price per gallon of jet fuel rose $0.19 (see Figure 3).
As of early September, the year-to-date price of a barrel of West Texas Intermedi-ate (WTI) crude oil was $49.22, compared to $40.90 for the same period last year. Meanwhile, the year-to-date average price of jet fuel was $1.47 compared to the average price of $1.18 seen over the same period last year (see Figure 4).
While jet fuel prices have been relative-ly stable this year, Hurricane Harvey sub-stantially disrupted the supply chain and caused a spike in fuel prices. Just more than half of all U.S. refinery capacity is located in the U.S. Gulf Coast, with Texas, where Harvey made landfall, represent-ing 31 percent of all U.S. refinery capacity. Output from Gulf Coast refineries fell 34 percent for the week ending September 1, compared to the prior week. Coupled with the effects of Hurricanes Irma and Maria, it may take several weeks to assess the full impact of these weather events on fuel prices. However, while the price of jet fuel has spiked, the futures market for crude oil remains relatively steady.
U.S. MAINLINE PASSENGER AIRLINES EARN PRETAX PROFIT While pretax profits through the first two quarters of 2017 were down $2.6 billion from last year, the industry still posted a very respectable 12.0 percent margin, down from the 15.9 percent pretax margin generated in the first half of 2016 (see Fig-ure 5). Airlines generated more than $80 billion in revenue, a 4.2 percent increase compared to last year.
For the first time since the Decem-ber quarter of 2014, PRASM (passenger revenue per available seat mile) had a year-over-year improvement in the second quarter of this year. Prior to that, consoli-dated PRASM had fallen for nine straight quarters, with the low point coming in the first quarter of 2016.
The U.S. domestic market PRASM start-ed turning the corner in the first quarter
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
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-2.0%
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6.0%
1Q12Source: Historic data from the U.S. Bureau of Economic Analysis and forecast data fromThe Wall Street Journal Economic Forecasting Survey, August 2017
Figure 1 | U.S. GDP Continues to Grow by 2 Percent
Figure 3 | Fuel Costs Rise Significantly from 2016
Air Canada and WestJet fuel costs are CAD$/gal and include fuel costs for third-party carriers.Source: Corporate press releases and SEC filings (excludes out-of-period hedges)
Real GDP Growth and Forecasts
Figure 2 | Global Economy Maintains Momentum
Source: IMF World Economic Outlook Update, July 2017 Note: (E) Estimated, (P) Projected
2015E 2016E 2017P 2018P
World 3.4% 3.20% 3.5% 3.6%Advanced Economies 2.1% 1.7% 2.0% 1.9%United States 2.6% 1.6% 2.1% 2.1%Euro Area 2.0% 1.8% 1.9% 1.7%United Kingdom 2.2% 1.8% 1.7% 1.5%Japan 1.1% 1.0% 1.3% 0.6%Emerging & Developing Economies 4.3% 4.3% 4.6% 4.8%Developing Asia 6.8% 6.4% 6.5% 6.5%Latin America & Caribbean 0.1% -1.0% 1.0% 1.9%Commonwealth of Independent States -2.2% 0.4% 1.7% 2.1%Central & Eastern Europe 4.7% 3.0% 3.5% 3.2%Middle East/North Africa 2.7% 5.0% 2.6% 3.3%Subsaharan Africa 3.4% 1.3% 2.7% 3.5%
Air Line Pilot Feature Article » STATE OF THE INDUSTRY
22 » Air Line Pilot October 2017
of 2017, and the second quarter saw all carriers report positive PRASM trends, with overall first half industry PRASM up 1.7 percent (see Figure 6). The transatlantic market saw improvements, primarily due to strong business-class demand, but re-mains challenged by high industry capac-ity levels. The Latin market continues its strong rebound, having now posted four straight quarters of PRASM improvement. The transpacific market, like the transat-lantic market, continues to be hampered by increases in industry capacity, which is offsetting some of the improvements seen in front-cabin demand.
CASM (costs per ASM), excluding fuel, increased 5.0 percent in the first half of 2017. One source of this cost increase came from the 20 new labor agreements that were negotiated in 2016.
Through the second quarter of 2017, mainline carriers increased capacity, as measured by ASMs, by 2.8 percent. For full-year 2017, it’s estimated that U.S. industry systemwide capacity will grow 3.1 percent. Overall domestic capacity (mainline, low-cost carriers, and others) is forecast to grow 3.6 percent, while international capacity is expected to grow 2.1 percent.
CANADIAN CARRIERS CONTINUE TO ELEVATE CAPACITY GROWTH Among all the advanced economies, Canada has made the biggest gains in real GDP growth in the past year. Cana-dian GDP grew 4.5 percent in the second quarter of 2017, which was the largest gain since the third quarter of 2011, while the 3.7 percent year-over-year increase in GDP was the best in 11 years (see Figure 7, page 24). The Canadian economy is supported by rising consumer confidence, some stability in the energy industry, and a rebounding jobs market. The Canadian economy has created the most new jobs in nine years and lowered the unemploy-ment rate to a near-decade low of 6.3 per-cent. In addition, the oil and gas sector has rebounded, with oil sands output reaching record highs and fully recovering from the impact of the wildfires in Alberta last year. Reflecting the relative strength of Canada’s economy and recent rate hikes from the Bank of Canada, the Canadian dollar has been the best performing cur-rency among the major currencies in the
Crude Oil & Jet Fuel Prices (Per Barrel)
Figure 4 | Crude Oil Tops 2016 Prices
Source: EIA (data through Sept. 5, 2017) and NYMEX (futures curve as of Sept. 8, 2017)
Source: Company press releases, SEC filings, and ALPA Economic & Financial Analysis analysisExcludes special items (other than fuel hedging se�led in the current period).
Figure 6 | Passenger Revenue Improves
Industry average includes U.S. carriers only, SSL adjusted.Air Canada and WestJet PRASM is reported in CAD$ and not SSL adjusted.
past several months (see Figure 8).Business activity within Canada contin-
ues to gain momentum, lifted by indica-tions that foreign and domestic demand will further improve, although risks from potential U.S. policy changes distort the outlook. The threat of protectionist
measures by the U.S. administration poses one of the biggest risks to the Canadian economy. As part of the North American Free Trade Agreement negotiations, the U.S. administration has already targeted Canada’s lumber, steel, dairy, and aero-space industries for concessions.
Despite the risk of a possible reduction in passenger traffic stemming from more protectionist trade policies, Canadian carriers continue to generate high levels of capacity growth. Capacity continues to grow at a faster pace than the GDP, with scheduled capacity growth projected to be 12.7 percent for Air Canada and 5.1 percent for WestJet in 2017. Air Canada’s capac-ity growth is primarily due to scaling up its Pacific flying, while WestJet’s capacity growth is attributable to domestic growth from WestJet Encore services and its expanding charter business.
Many Canadian carriers continue to record significant operating revenues due to high traffic demand in the transborder and international markets. Air Canada, WestJet, and Jazz Aviation posted pretax margins of 2.1 percent, 6.3 percent, and 12.0 percent, respectively, for the first half of 2017. Margins were slightly down compared to the first half of 2016 due to increased costs (see Figure 9). Air Canada and WestJet were impacted by higher costs resulting from increased flying and fleet expansion. Jazz was impacted by higher aircraft rent due to additional aircraft leased from Air Canada.
Improvements in the Canadian econo-my this year will benefit passenger traffic and help to absorb some of the incremen-tal supply. Additionally, the surge in the Canadian dollar will help reduce airline costs that are incurred in U.S. dollars. Yet despite the stronger than expected eco-nomic growth in the first half of 2017 and the strong Canadian dollar, the elevated capacity growth at the large Canadian carriers will continue to put pressure on unit revenues, causing industry margins to trend downward.
CARGO INDUSTRY SHOWS ROBUST GROWTH After several years of struggling, the air freight sector bounced back last year, with freight ton kilometers (FTKs) growing 3.8 percent in 2016, as global economic conditions started improving beginning in mid-2016. Freight movement experienced gains through an increase in consumer spending growth and strengthening trade, especially in emerging economies.
The momentum has continued into 2017, with several months having double-digit FTK growth (see Figure 10). Through
Figure 8 | Canadian Dollar Outperforms U.S. Dollar
Source: CanadianForex
U.S. Dollar Per Canadian Dollar
$0.68
$0.70
$0.72
$0.74
$0.76
$0.78
$0.80
$0.82
$0.84
9/9/
2016
10/9
/201
6
11/9
/201
6
12/9
/201
6
1/9/
2017
2/9/
2017
3/9/
2017
4/9/
2017
5/9/
2017
6/9/
2017
7/9/
2017
8/9/
2017
Source: Statistics Canada and BMO Capital Markets
Canada Real GDP (Chain-Weighted) % Change(Quarter-Over-Quarter Annualized % Change)
Figure 7 | Canada’s Economic Growth Strong Through First Half of 2017
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
1Q10
2Q10
3Q10
4Q10
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F4Q
17F
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F2Q
18F
Forecast
Figure 9 | Canadian Carriers’ Overall Pretax Margins Decrease
Note: EIF information is shown for aerospace and aviation segment only (EBITDA margin).Source: Company reports
Air Line Pilot Feature Article » STATE OF THE INDUSTRY
24 » Air Line Pilot October 2017
July, FTKs grew 10.6 percent compared to the same seven-month period in 2016, with European and Asian carriers accounting for more than two thirds of the growth. FTK growth this year has far surpassed the post 2008–2009 global financial crisis average of 3.0 percent and has even surpassed the pre-crisis trade volume growth of 5–7 percent. Positive growth was recorded in all geographic regions.
This robust growth in air cargo de-mand is consistent with an improvement in global trade, rising export orders, and positive business-confidence indicators. These freight volumes have been consis-tent with the typical pattern seen during upturns in the economic cycle. Begin-ning in the second half of 2016, demand growth has exceeded capacity growth (see Figure 11).
Yields, including fuel and other surcharges, have risen by 4.5 percent in seasonally adjusted terms since bottoming out in mid-2016. However, when adjusted for inflation, the 2017 annual estimated rate paid for freight is still 69 percent less than the rates paid when compared to 1996 freight rates.
A number of key freight airports saw significant changes to cargo throughput (see Figure 12, page 26). This growth in volume has been particularly driven by outbound traffic from Asia. Demand, in general, has been healthy on all of the major routes to, from, and within the Asia Pacific region. Consistent with figures from earlier in the year, most major Asian cargo airports saw double-digit rate increases in May. Meanwhile, conditions in the Middle East remain soft, with Dubai only recording modest increases and Abu Dhabi seeing significant drops in cargo throughput.
U.S. publicly traded cargo carriers’ earnings increased in the first half of 2017. Adjusted pretax profits grew 22.4 percent, from $5.5 billion during the first half of 2016 to $6.7 billion for the same period in 2017. FedEx accounted for most of the increase, as FedEx’s pretax profits grew nearly $1.1 billion. Revenues for these carriers increased 12.3 percent from $56.7 billion to $63.6 billion during the same period. As a result, total pretax margin for cargo carriers rose from 9.7 percent in the first half of 2016 to 10.5
percent in the first half of 2017 (see Figure 13, page 26).
Two divergent views currently exist re-garding the near-term outlook for cargo. One school of thought believes that air freight demand will drop off as the recent uptick in cargo traffic has met the inven-tory requirements for the upcoming peak shipping season. In addition, the prospect of countries turning toward more inward-looking and protectionist trade policies could put a further damper on the cargo industry. The other viewpoint believes that growth has gained momentum and will continue into the peak season. Sur-veys indicate that business leaders have become more optimistic about future prospects. These leaders see the global economy experiencing renewed optimism
and stronger growth. This optimism is fueled by expectations of continued fiscal support in China and the continued loose monetary policy in the United States. Furthermore, as e-commerce continues to expand and redefine itself, it presents more opportunities for freight operators as a result of real-time delivery solutions.
While the expansion of e-commerce presents opportunities for freight op-erators, it also presents a challenge. As Amazon begins to build its own domestic air network, it’s beginning to shift its freight business away from FedEx and UPS and onto planes operated by ATSG and Atlas. While the current plan is for 40 aircraft (20 each to be operated by ATSG and Atlas), the hub Amazon is building at Cincinnati/Northern Kentucky Interna-
Source: IATA Air Freight Market Analysis, July 2017
YTD July 2017 Seven-MonthFreight Traffic Growth by Region
Industry 10.6%
Figure 10 | Global Freight Traffic Grows Double-Digits Through First Seven Months of 2017
27.2%
10.3%
13.3%
1.1%
7.9%
0%
5%
10%
15%
20%
25%
30%
Africa Asia Pacific Europe La�n America Middle East North America
9.7%
Figure 11 | Air Freight Demand Growth Exceeds Capacity Growth
Source: IATA Air Freight Market Analysis Reports
-10%
-5%
0%
5%
10%
15%
20%
Jan-
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FTK AFTK
Demand Growth ExceedsSupply Growth
October 2017 Air Line Pilot » 25
Note: Results are based on calendar year; therefore, FedEx fiscal year adjusted to a calendar basis.Source: Company reports and ALPA Economic & Financial Analysis analysis
Adjusted Pretax Margins
Figure 13 | Industry Pretax Margin Increases Nearly 0.9 Points
tional Airport will support a fleet of 100 cargo planes.
FFD SECTOR CONTINUES TO SHRINK The fee-for-departure (FFD) industry continues to face challenges that are the direct result of that sector’s unique business model. The sector has recently increased the transfer of flying obliga-tions among FFD carriers via contract extensions, realignments, and discontinu-ation of certain capacity purchase agree-ments with mainline carriers (see Figure 14). Air Wisconsin announced a new five-year capacity purchase agreement with United Airlines, transitioning away from a 12-year partnership with Ameri-can Airlines. ExpressJet, a wholly owned subsidiary of SkyWest, Inc., realigned its capacity purchase agreement with United Airlines with a new five-year extension, and is also winding down its agreement with Delta Air Lines, with most of the 76-seat CRJ900s transferred to Endeavor Air, a wholly owned subsidiary of Delta. Although these new agreements still do not give the FFD carriers the ability to increase the revenue negotiated for the duration of these long-term agreements and continue to place pressure to limit cost increases, they do provide more struc-tural stability and a more clearly defined long-term strategy.
FFD carriers continue to favor 70-plus seat aircraft as they compete for even fewer contracts with the remaining domi-nant mainline carriers (see Figure 15). As a result, their capital costs have increased in the short term as they replace 50-seat jets with more fuel-efficient 70-seat jets. Based on FAA estimates, the FFD carrier fleet is forecast to decline by 14 percent between 2016 and 2025.
In addition to capital costs, labor costs at the FFD carriers are also increasing, as these carriers are making an effort to provide higher wages and benefits and more career-progression opportunities to pilots to combat attrition. Many of the FFD carriers have been forced to increase the amount of signing bonuses and reten-tion payments being offered to attract and retain pilots and to remain competitive in the recruiting market (see Figure 16).
Furthermore, as part of the new capac-ity purchase agreements signed with mainline carriers, many FFD carriers have
implemented career pathway programs that will give pilots access to jobs at larger mainline carriers if they meet specific hiring standards. While these wage and short-term and temporary bonus solutions certainly benefit prospective pilots, they don’t necessarily secure their long-term compensation and benefits packages nor do they solve the quality-of-life issues pi-lots are seeking to resolve at FFD carriers.
Pilot retention at FFD carriers will also
be exacerbated as pilot retirements at the mainline carriers begin to significantly increase in 2021 and peak in 2025, with an estimated 23,000-plus pilots expected to retire between now and 2025 (see Figure 17). These retirements will have a nega-tive impact at FFD carriers as FFD pilots transition to mainline flying.
Challenges in the FFD sector can’t be overcome by the managements of FFD carriers alone. Mainline carriers that
*Air Wisconsin’s flying for American expires in early 2018, while flying for United will begin in September 2017. Source: OAG and ALPA Economic & Financial Analysis analysis
FFD Partners
Percent Share of Scheduled Regional 2017 ASMs
Figure 14 | Fee-for-Departure Landscape Continues to Evolve
Data for April 2017Source: IATA Cargo Chartbook, 2Q17
Tons of Cargo Throughput (% y/y, May 2017)
Figure 12 | Volume Increases at Most Major Cargo Airports
-15% -10% -5% 0% 5% 10% 15%
Abu Dhabi (AUH)*
Dubai (DXB)*
Frankfurt (FRA)
Seoul (ICN)
Los Angeles (LAX)*
Tokyo (NRT)*
Miami (MIA)
Singapore (SIN)
Hong Kong (HKG)
Shanghai (PVG)
EXPRESSJETSKYWEST
ENVOY AIRPSA
PIEDMONT
REPUBLICSHUTTLEAMERICA
TRANSSTATESGOJET
COMPASS
MESA ENDEAVORAIR HORIZON AIR
WISCONSIN*
AS ASAA AA AA AA AA AAUA UA UA UA UADL DL DL DL
Air Line Pilot Feature Article » STATE OF THE INDUSTRY
26 » Air Line Pilot October 2017
extensively rely on the feed of these FFD carriers need to realize that they can’t continue to whipsaw FFD carriers against each other in a quest for the lowest cost, as this will exacerbate the problem the sector has in attracting and retaining pilots. And, ultimately, this will hurt mainline carri-ers, as a large portion of their pilot hiring pool comes from the FFD industry. Collab-oration by both partners will contribute to the growth of the U.S. airline industry as well as help secure the long-term develop-ment of the piloting profession.
OUTLOOK FOR THE REMAINDER OF 2017 The U.S. mainline passenger industry has posted seven straight years of profits and remains on track for an eighth consecu-tive year of profitability. However, it’s ex-pected that the profit levels achieved this year will be lower than 2016 levels, even before taking into account the impact of Hurricanes Harvey, Irma, and Maria.
Even prior to the recent hurricanes, fuel prices had increased. Between July 3 and August 23, jet fuel prices had risen by about 15 percent.
Airlines had also started to reduce rev-enue expectations, citing close-in domestic yield pressures and increased competition, in some cases resulting in fare wars.
The industry continues to be challenged by outside forces, such as government regulation and taxation, increased inter-national competition from subsidized car-riers, and emerging business models, such as the recent rise of long-haul low-cost competition across the Atlantic Ocean.
While FFD carriers are affected by some of these challenges as well, their most immediate test is attracting and retaining pilots.
For the freight carriers, while the start of this year has been promising, the out-look for the rest of the year is a bit mixed. Although the export order books are growing, capacity growth has outpaced traffic growth in the past few months. This decrease in load factor will put pres-sure on yields.
ALPA’s Economic & Financial Analysis Department will continue to track and ex-amine the various economic and financial indicators that impact the airline industry, as these factors play a crucial role in the career of the Association’s members and the overall airline piloting profession.
Source: Regional Airline Association annual reports, FAA aerospace forecast, and ALPA Economic & Financial Analysis analysis
Total Regional Aircra� Fleet
Figure 15 | Fee-for-Departure Fleet Is Shrinking
0
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2008 2009 2010 2011 2012 2013 2014 2015 2016
Fewer than 50 seats More than 50 seats Total Regional Turbojets
Note 1: Figures are based on available data as of July 1, 2017.Note 2: Figures apply to a first officer hired in 2017 and remains employed as a first officer for at least two years.Note 3: Additional retention bonuses available at Air Wisconsin, Endeavor Air, Great Lakes, PSA, Piedmont, and Trans States a�er a firstofficer’s second anniversary.
Source: Company reports and ALPA Economic & Financial Analysis analysis.
Bonuses Available Through Year Two
Figure 16 | Fee-for-Departure Carriers Relying on Bonuses to Attract and Retain Pilots
By Christopher Freeze, Senior Aviation Technical Writer
I n mid-August, more than 100 pilots, government represen-tatives, and industry leaders
attended ALPA’s one-day Air Cargo Safety Symposium held in the Association’s Hern-don, Va., Conference Center. Participants discussed various safety issues affecting air cargo transportation worldwide.
“There are numerous safety concerns for those in our pro-fession,” said Capt. Joe DePete, ALPA’s first vice president and national safety coordinator, who opened the conference. “The risks posed by the car-riage of lithium batteries and other undeclared hazardous materials, for instance, keeps
me awake at night. Pilots may not be 100 percent certain of what they’re carrying on board their aircraft, but they should be 100 percent confident in knowing what is not on board.” DePete reminded the group that almost every airline flight is a cargo flight, so cargo is-sues affect all ALPA members. Keeping aviation the safest and most secure form of travel, one of the Association’s strategic goals, is in ALPA’s DNA.
Discussing all-cargo operations, Ali Bahrami, FAA associate administrator for aviation safety, spoke about the agency’s focus on air cargo safety, stating, “We became aware of the shortcoming in a highly specialized segment of aviation after a horrific crash
was captured for millions to see through the lens of a dash cam. There are certain images that will always stay with us—and the accident at Bagram [involving the loss of an all-cargo B-747 and its seven crewmembers in 2013] is definitely one of those.”
Bahrami continued, “In your position as an economic driv-er—a million jobs and revenue of more than $100 billion—you have as many business models as you have clients…. There’s no doubt that everyone in this room recognizes the need for learning the key lessons from that accident and doing all we can to prevent similar unfortu-nate events. However, the first step is to recognize that there’s a problem.
“We’re moving in the right
direction. But if you walk away from the Bagram accident thinking it’s only a lesson in special cargo and tie-downs, I think you’re missing the point,” remarked Bahrami. “The NTSB made its point clear on inadequate restraint procedures and that operators must remain vigilant about the carriage of cargo—what they’re carrying, how they’re loading it, and how they’re restraining it.”
GOVERNMENT AS A TEAMMATEMembers of the FAA’s Cargo Focus Team reviewed the inves-tigative results and recom-mendations from the NTSB on the Bagram B-747 crash and
Air Cargo Industry Gathers For Safety Symposium
Air Line Pilot Feature Article » CARGO
Capt. Joe DePete, ALPA’s first vice president and national safety coordinator, ad-dresses symposium attendees on the industry’s importance to global trade.
Ali Bahrami, FAA associate admin-istrator for aviation safety, highlights the recent successes of the FAA’s Cargo Focus Team.
George Padalec, a member of the FAA’s Cargo Focus Team, details how different operators handle restraining cargo.
Continued on page 30
October 2017 Air Line Pilot » 29
the impact on cargo handling. George Padalec, a member of the team, talked about practices and procedures for restraining cargo, noting, “When our team asked [cargo flying] certificate holders the question ‘show us where the operations you’re handling are approved,’ no one could do it.”
Padalec acknowledged that “air cargo issues aren’t limited to supplemental air carriers…or just widebody airplanes. Narrowbody aircraft have their own issues. Training was an issue, as pilots were flying the planes and loading them, too.”
Stephen Moates, an FAA safety inspector for Part 121 air carrier operations, discussed standardization and risk mitigation for special cargo. “When the FAA Cargo Focus Team first started, we began with manual reviews and quickly found that the cargo world was all over the map. There was no consistency among the operators, and little consistency within the FAA in our oversight. But we worked with industry to create opera-tion specifications so that…we can come from a place of common understanding. That collaboration provided us the baseline for developing our guidance to others, and has allowed us to work to refine practices without additional rulemaking—especially considering how dynamic the world of cargo flying really is. The challenges of special cargo require greater training as they present greater risk, and therefore greater risk mitiga-tion is needed.”
Mindful that training and work experience are critical components of safety, Mark Phaneuf, an ALPA senior staff
engineer, and Martin McKin-ney of UPS—the co-chairs of the FAA’s Aviation Rulemaking Advisory Committee Load-master Certification Working Group—spoke about develop-ing requirements for profes-sionals who handle special car-go. “Our 12-person team was tasked to see whether safety would be enhanced if individu-als engaged in loading and in supervising the loading of special cargo be certificated,” said Phaneuf. “We’ve unani-mously determined that safety would be enhanced and are studying different approaches to do this and are scoring them
for costs, impacts, and the overall effectiveness of such a requirement. We plan to issue our report to the FAA within the next few months.”
In a panel discussion on the risks of undeclared hazardous materials and lithium batter-ies, Janet McLaughlin, director of the FAA’s Office of Hazard-ous Materials Safety, stated, “Right now, we’re reactive—and typically too late as the materials have already entered the air transportation system. We react to 100 percent of the reports that come into our office from the DOT or the FAA. But that isn’t getting to the preventive side. That starts with shippers, who—most of the time—don’t know that what they’re shipping is con-
sidered dangerous. Hazardous materials are now something consumers buy at the gro-cery store…. People simply don’t realize that they carry things with special-handling requirements on a daily basis. So it’s hard to educate folks on the risks in their pockets and shopping carts.”
LITHIUM BATTERIESDr. Tom Chapin, a mate-rial safety scientist with UL, presented the scientific basis for the risks lithium batteries present in the framework of his company’s research. “What we do is deconstruct products in their elemental state, evalu-ate them, and then reconstruct them. And while all batteries are potentially reactive, all can fail. When a battery has an in-ternal short circuit, the results are predictable—you get a temperature rise to a thousand degrees, the cell bursts, the contents are ejected—which are usually electrolytes that have a flashpoint around room temperature, and then they ei-ther ignite, catch fire, explode, or propagate.”
Capt. Scott Schwartz (FedEx Express), ALPA’s Air Safety Organization Dangerous Goods director, provided the pilot perspective to attendees. “The primary method of fire risk mitigation on commercial airplanes is prevention—the
Air Line Pilot Feature Article » CARGO
Janet McLaughlin, director of the FAA’s Office of Hazardous Materials Safety, discusses educating shippers about the risks posed by transporting dangerous goods.
Continued from page 29
Capt. Scott Schwartz (FedEx Ex-press), ALPA’s Air Safety Organization Dangerous Goods director, emphasizes the role of prevention in combating airborne fires.
“ While air cargo represents only 7 percent of the industry, the differences between cargo and passenger operations are wide and varied. The question is do these differences account for greater risk?”
30 » Air Line Pilot October 2017
fire-suppression systems installed on our planes are secondary and are far from foolproof. Lithium batteries are unique in their ability to start and maintain a fire in flight and can overwhelm fire-suppression systems. It’s abso-lutely false to conclude that the only battery we have to worry about is that in an undeclared shipment—fully declared compliant shipments still have to be handled carefully with appropriate precautions to ensure their safe transport. This includes batteries shipped by themselves; batteries in or with equipment; and batteries in checked baggage, carry-ons, or shipped as cargo.”
Schwartz noted that “the remarkable safety record of our aviation system is based on individual responsibility. The difference between pilots and mechanics versus ship-pers is the system of training, licensing, and recordkeeping to which pilots and mechanics are subject. There is no such structure in place for nondan-gerous goods shippers, and, ac-cording to our regulators, they may not have the authority to impose dangerous goods train-ing requirements on those who don’t intend to ship dangerous goods. So we’re caught in a Catch-22. How does someone know they’re breaking the rules if they aren’t required to be trained as to what the regulations are?
“While ALPA supports all ef-forts to mitigate the problems,” Schwartz said, “before we devote a significant portion of our limited resources, we need to ensure our fixes are indeed solving a safety problem and not simply adding more com-plexity and costs to a system that already has very complex and confusing regulations. Initially, however, we can focus on education.”
Mike Wentz, a dangerous goods compliance manager at American Airlines, shared several case studies of lithium batteries being both acciden-tally and intentionally shipped within passenger airline cargo holds and focused on the need for consumer education. “Less than 1 percent of the popula-tion understands how lithium batteries work and how dan-gerous they can be. We need to help the other 99 percent un-derstand that a fire at 35,000 feet is unacceptable.”
NEW TECHNOLOGIESAmerican Airlines has adapted a multilevel, collaborative ap-proach to controlling lithium battery transport. The airline has partnered with UL to con-duct additional research into fire-containment development and testing, fire-suppression testing, detection methods for undeclared lithium batteries in cargo and baggage, and bat-tery database validation via the Worldwide Environmental & Regulatory Compliance System to eliminate counter-feit and “twilight batteries.” American has also partnered with the NTSB, the FAA, and UL to educate battery re-searchers and industry on the challenges air carriers face in order to safely transport lithium batteries.
Capt. Bob Brown, chairman of the UPS/Independent Pilots Association Safety Task Force, addressed his association’s efforts regarding managing fire risks. “We knew that the solutions we were seeking didn’t really reside in the aviation industry, so we found ourselves going to various organizations outside aviation and asking what they did…for instance, the U.S. Navy or the U.S. space program and even the Russian space program. We looked far and wide for
potential solutions.”Those efforts have culminat-
ed in the development of the E-ULD—the enhanced unit load device. Made of a composite material called Macrolite, the E-ULD has a built-in fire-detection and sup-pression system. In testing, a fully loaded E-ULD with Group A plastics has detected fires within a minute of ignition and extinguished the blaze within 20 seconds. The E-ULD design is currently being tested on lithium batteries and is nearing FAA certification.
Brown also detailed the Safe2Fly program, a voluntary certification program under development that lists known shippers and products. Using radio frequency identifica-tion technology, the program allows third-party verification of a battery being sent from a known shipper to ensure that a battery can be fast-tracked for air transport or deemed unsafe and deferred to an alternate process or disposi-tion per current regulatory requirements.
Representatives from the FAA discussed the work of the Commercial Aviation Safety Team’s (CAST) Cargo Working Group, explaining the chal-lenges the agency faces. “There are risks in the cargo operating environment that differ from those in the passengers-carry-ing environment. And while CAST has developed many safety enhancements, cargo has a different risk signature that those enhancements may not be as effective in mitigat-ing,” said Vivek Sood, an FAA technical advisor.
Darcy Reed, an FAA aircraft repair station branch man-ager, spoke about foreign air carriers that work under FAR Part 129 and operate under different rules than Part 121 airlines. When asked what
pilots and the public should do if they see a violation, Reed replied, “Report the occurrence to the Flight Standards District Office in the vicinity of the airport where you see it, and the agency will investigate. Investigators will check to see
if the actions are in compli-ance with the airline’s foreign certificate.”
Capt. Rich Hughey (FedEx Express), the ALPA President’s Committee for Cargo chair, addressed the demographics of current aircraft fleets in terms of age, technology, size, and ca-pabilities, as well as differences between passenger and cargo-only operations. He noted that “while air cargo represents only 7 percent of the industry, the differences between cargo and passenger operations are wide and varied. The question is do these differences account for greater risks? Some believe so, and we’re going to studying that.” (See page 6.)
In closing, Hughey re-marked, “It’s going to take some time and some effort, as all-cargo operations are the segment of the industry that has the most improvement to make. But with us all work-ing together—government, industry, labor—for a common cause, I know there’s a future where safety in cargo opera-tions is at the same level as that of passenger operations.”
Capt. Rich Hughey (FedEx Express), the ALPA President’s Committee for Cargo chair, talks about the need for continued cargo safety and security improvements.
October 2017 Air Line Pilot » 31
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Collective Bargaining Committee Plans for the Future
By Kevin Cuddihy, Contributing Writer
Members of ALPA’s Collective Bargaining Committee (CBC) met in the Association’s Herndon, Va.,
offices in early August to review their continuing efforts to assist the negotiating committees of ALPA’s 33 pilot groups. In support of one of the union’s three overall strategic goals of representing pilots, the group discussed its backing for master executive council (MEC) initiatives to in-crease wages, improve working conditions, and enhance benefits and implementing ALPA’s overall strategic plan. The com-mittee also welcomed new members and began work on a report it will present to the Board of Directors (BOD) in October 2018.
Capt. Tim Canoll, ALPA’s president, and Capt. Phil Otis (United), the CBC chair, opened the meeting (see page 7). Canoll recalled his four years as a negotiator, telling CBC members that he understood the difficulties of the job. “It’s the last job anyone wants to do,” he said. “But when you ask pilots what they want ALPA to focus on, 99 percent of them say it’s getting them a good contract.”
The committee was joined by staff from ALPA’s Representation, Economic & Financial Analysis (E&FA), and Retirement & Insurance Departments. Betty Ginsburg, director of the Representation Department, assisted Otis in moderating the meeting and facilitated conversations regarding the committee’s priorities and plans. The group discussed four main topics:
Best practices for negotiating commit-tees,
Family leave and how to get the topic on the negotiating table,
Preserving pilot jobs that could poten-tially be threatened by drones, and
Improving retirement plans to cover longer periods of retirement.
All of the CBC members have partici-pated in negotiating recent agreements and shared their experiences throughout the meeting, compiling their insights for a planned “best practices” document. One example that made it on the group’s best practices list is inviting E&FA staff to provide MECs with regular economic reports—not just when entering negotia-tions—to give pilot leaders a deeper under-standing of the economic factors that may affect their ability to achieve their pilots’ bargaining goals.
Canoll also asked the CBC to review is-sues specific to women and families. The committee examined numerous related topics and talked about ways to address these items in negotiations. “We’re just beginning to discuss this from the CBC perspective,” Otis acknowledged. But the evolving environment, he said, makes resolving these issues even more relevant. Lori Garver, ALPA’s general manager, spoke with the committee members about the newly formed Women’s Working Group and encouraged the committee to
work with this group to identify areas for advancement. “Many of these improvements are easy to do yet wildly increase a feeling of welcome in the job,” she said.
Regarding drones, Canoll asked that the committee address a range of bargaining-related issues, including whether to rec-ommend a resolution to the BOD that ALPA represent all pilots in North America—whether they’re commanding airplanes from the flight deck or operating them remotely. While there are many details to iron out as this tech-nology emerges, the committee
noted that pilot representation should not be in question.
And with longer lifespans creating longer retirements, the committee dis-cussed the need to encourage increased contributions to retirement plans as well as a means to add lifestyle enhancements and noncash benefits to contracts that enhance value for the growing number of pilots who are bumping up against annual contribution limits.
The CBC members also reviewed the current economic climate and potential changes; specific issues in the cargo, Cana-dian, and fee-for-departure pilot groups; and the changing structure of the National Mediation Board due to the results of the 2016 U.S. presidential election. They also explored ways to extend favorable bargaining targets, first outlined in ALPA’s 2010 strategic plan, through the next five and 10 years.
Moving forward, the CBC will continue its efforts to reach out proactively to MECs, especially those entering negotiations. Meanwhile, work will continue on BOD reports as well as researching any needed edits or updates to the committee’s sec-tion of ALPA’s Administrative Manual in advance of next year’s meeting.
“We want to create a process that will be easy to keep going from year to year,” said Otis, who also stressed the importance of collaboration. “We’re working to tie together ALPA’s strategic plan with all 33 pilot groups,” he explained, “aligning the goals of the Association with the goals of each pilot group.”
Air Line Pilot Feature Article » COLLECTIVE BARGAINING
Capt. Tim Canoll, ALPA’s president, third from left, welcomes members of ALPA’s Collective Bargaining Committee.
32 » Air Line Pilot October 2017
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Questions to Ask & Decisions To MakeBy Marian Tashjian, Senior Benefits Specialist, ALPA Retirement & Insurance Department, and Kevin Cuddihy, Contributing Writer
W hile the exact dates differ, most airlines have their open enroll-ment for health insurance in the
fall. Generally speaking, employees have a few weeks’ window every year when they can make any desired changes to their company health insurance cover-age. While this article won’t give you a yes or no answer to the question “should
I change?” it may help you evaluate your options and reach a decision. But before we explore how to determine if you should make any changes during this upcoming open-enrollment period, there are two important points to note.
At some airlines, you must reselect your health insurance coverage during open enrollment, even if you want to keep the
same coverage. This is called active enroll-ment, as opposed to passive enrollment, where you continue with your current coverage unless changes are made. Flexible-spending account elections must be made each year even if your airline’s open enrollment is passive.
Pilots who experience what’s termed a “qualifying life event”—e.g., a birth, marriage, divorce, loss of job, just to name a few—can adjust their health insurance within 30 days following the event, no matter when it occurs.
VARIABLES
There are four main monetary consider-ations involved in your decision: premi-ums, deductibles, copayments/coinsur-ance, and the out-of-pocket (OOP) limit. The premium is your monthly contribu-tion toward the cost of your health plan. Most health plans generally require you to satisfy an annual deductible before any plan benefits are paid. For example, a plan with a deductible of $2,000 means that you’ll pay the first $2,000 of your covered medical expenses each year (although the deductible is waived for certain
34 » Air Line Pilot October 2017
preventive-care services as mandated by law). Even while working through your deductible, you’ll still be eligible for any network discounts by your health-care administrator.
Once the annual deductible is satis-fied, you pay the applicable coinsurance and copayments, if any, for all covered expenses until the total amount you’ve paid reaches the plan’s OOP limit, your maximum financial exposure under the plan. After the OOP limit is reached, all additional covered expenses you incur during the year are paid in full by the plan. Copayments (or “copays”) are a fixed amount you pay for things like office visits, prescriptions, or emergency room visits, while coinsurance is the percentage of the cost you’ll pay for covered services. For example, you might have a $20 copay for a visit to your primary physician, a $10 copay for a generic drug, or a $250 copay for a visit to an emergency room—or you might be required to pay 20 percent of the total cost instead, depending on how the plan is designed. Generally, the higher the deductible and your share of the coinsur-ance, the lower the cost of your plan and your premium contribution. Coinsurance amounts can also vary depending on if the doctor is in network or out of network, and you may be responsible for amounts over usual and customary charges when you go out of network.
TYPICAL TYPES OF INSURANCE
Your airline may not offer the full range of health plan options available, but chances are your selections include some of the following:
Health maintenance organization (HMO)
Preferred provider organization (PPO)
PPO with a health reimbursement ar-rangement (HRA)
PPO with a health savings account (HSA)
It’s important to understand that the underlying health plan is usually exactly the same for all the self-insured plan options made available by the employer.
Most airline plans, with the exception of HMOs, are self-insured. In other words, each self-insured health plan option of-fered by your airline generally covers the same services. If one plan covers acupunc-ture, chiropractic care, and treatment for autism, for example, then all the self-in-sured plan options offered by your airline will likely cover these services. The only difference is your cost for each health plan option, including your monthly pre-mium contribution, deductible, coinsur-ance, etc.
An HMO is a type of health insurance plan that usually limits coverage to care from doctors who work for or contract with the HMO. It generally won’t cover out-of-network care except in
an emergency. An HMO may require that you to live or work in its service area to be eligible for coverage. A PPO, on the other hand, is a type of health plan in which you pay less if you use providers in the plan’s network. You can use doctors, hospitals, and providers outside of the network, but your out-of-pocket expenses for out-of-network care will be higher. Generally speaking, a PPO provides more flexibility in choosing your caregiver than an HMO.
ACCOUNT-BASED HIGH-DEDUCTIBLE HEALTH PLANS
If you’re considering enrolling in a high-deductible health plan option, it’s important to understand the two types of accounts often associated with these plans—health reimbursement arrange-ments (HRAs) and health savings accounts
(HSAs). Both accounts are tax-preferred. This means contributions to, and distribu-tions from, the accounts for otherwise unreimbursed eligible medical expenses aren’t included in income for federal (and most state) income taxes and federal em-ployment (FICA) taxes. HSA contributions made directly to a financial institution and not via payroll deduction aren’t ex-empt from FICA taxes. Account balances may also grow tax-free if invested, though this generally applies only to HSAs, as HRAs for active employees are usually just notional accounts that aren’t invested and don’t accrue interest (as opposed to retiree-only HRAs, which are typically funded and held in trust).
HRAs and HSAs are very different in many respects. HSAs must be linked
to a high-deductible health plan for HSA contributions to be permitted,
while HRAs are often coupled with one but it’s not a requirement. Health plans with HSAs have government-mandat-
ed guidelines for minimum deductibles and maximum OOP expenses, while HRAs have no such government-mandated guidelines.
Funding and control under these two types of accounts also differ. HSAs may be funded by employers, employees, or both, and there are limits on the total amount that may be contributed. HRA plans must be funded solely by the employer, and there are no government-mandated limits. An HRA (for active employees) is typically a notional account controlled by the employer. Unused funds typically roll over from year to year, but the employee is usually not permitted to take unused funds if he or she changes to a different type of health plan or terminates employ-ment. HSA funds, on the other hand, must be held in trust at a bank or other financial institution and always belong to the employee, who is free to use the funds for eligible out-of-pocket health-care expenses as they are incurred or to invest the balance and allow it to grow tax-free regardless of whether they later change to a different type of health plan.
As mentioned, health plans with HSAs have specific requirements with respect to minimum deductibles that must be satisfied before the plan pays any benefits. Except for expenses for preventive care and preventive prescriptions, an HSA-eli-Q “There are four
main monetary considerations
involved in your decision: premiums,
deductibles, copayments/coinsurance, and the out-of-pocket limit.”
October 2017 Air Line Pilot » 35
gible plan can’t pay any expenses, includ-ing prescription drug expenses, until the applicable deductible is met. Most HRA plans cover prescriptions with a copay-ment or coinsurance, and the deductible applies only to other covered medical expenses. You should confirm how the HRA-based plan(s) offered by your airline work in this regard.
An often-misunderstood difference between HRA- and HSA-based health plans is how the deductible and OOP limits are applied when you elect coverage for one or more dependents. HRA-based plans generally operate like traditional PPO plans, where the single deductible applies to each individual when multiple family members are covered, and the family deductible is simply the maximum deductible that would apply to you and all your covered dependents collectively.
For example, in an HRA-based plan with a deductible of $1,500/single and $3,000/family, usually no one individual in the family would be required to satisfy more than a $1,500 deductible. However, the family deductible would be satisfied once the family’s collective expenses total $3,000. The same principle applies with respect to the OOP limit.
This is not the case with HSA-based plans. The minimum deductible of $1,350 (as of 2018) for single coverage applies to single coverage only. When the employee covers one or more dependents in an HSA-based plan, the minimum family deductible of $2,700 (as of 2018) must be satisfied, by one covered individual or collectively by all, before the plan may pay benefits other than for preventive care and preventive prescriptions. (Any embed-ded deductible in an HSA-based plan covering more than one individual must be at least $2,700). So any single member of a covered family must continue to pay the full cost of his or her health-care expenses until he or she, or the family col-lectively, spends at least $2,700 for covered expenses. This assumes the HSA-based health plan uses the minimum required deductibles; your HSA-based health plan option(s) may have higher deductibles.
Similarly, with respect to the OOP limit, though your plan may have embed-ded individual OOP limits, there is no government-mandated embedded single OOP limit when more than one individual is covered. Regardless, no individual in a family—even in an HSA-based plan—can be required to meet an OOP limit for
in-network covered services that exceeds $7,350 (2018), the OOP limit under the Af-fordable Care Act.
For a more detailed chart on the differ-ences between these two types of ac-counts, visit www.alpa.org/hsa-hra.
MAKING A DECISIONWhen reviewing health plan options dur-ing open enrollment, it’s typical to focus on the deductibles and OOP maximums. But you should also focus on the premium contribution required for each of these plans. While the higher deductible and OOP maximum often seen in high-de-ductible health plans may seem daunting, consider that many people won’t incur enough medical expenses during the year to meet the deductible, and most will never meet the OOP maximum—but every individual electing coverage will pay the annual premium. And as expected, the premium is highest for the plans with the lowest deductible.
Consider the three sample plan designs illustrated in Table 1. A pilot electing single coverage with a $400 deductible under the traditional PPO will pay $1,800/year in premium even if he or she never
uses any benefits that year. This pilot could choose to elect the HRA/PPO with the $1,000 deductible instead. The $500 HRA seed money the employer will con-tribute to reimburse the pilot’s OOP ex-penses reduces the deductible to $500 (the “effective deductible”). This is still $100 more than the $400 deductible under the traditional PPO, but the annual premium for single coverage under the HRA/PPO is $1,200—a $600 savings. If this pilot meets the deductible, he or she is no worse off; but if the pilot doesn’t, he or she is ahead of the game because of the $600 premium savings.
A pilot with family coverage consider-ing these same options would pay $5,400 per year for coverage under the traditional PPO with an $800 family deductible or instead the pilot could consider family coverage under the HSA/PPO. After taking into account the employer’s HSA seed con-tribution, the effective family deductible under the HSA/PPO is $3,000. However, this pilot will only pay $1,800 per year in premium, a savings of $3,600 over the premium he or she would have to pay for the traditional PPO whether or not the family ever uses any benefits. The premium savings alone is more than the effective family deductible.
If you typically meet your deductible, you may want to do a similar analysis using the plan’s OOP maximums. Once again, take into consideration that the company-paid account seed and/or well-ness rewards offset the OOP maximum (the “effective OOP maximum”). By adding each plan’s annual premium to the plan’s effective OOP maximum, you can deter-mine the total maximum exposure for single and family coverage. In a worst-case scenario in which health-care expenses meet the plan’s annual OOP maximum, the maximum exposure for family coverage, including the annual premium, would be $8,400 under the PPO, $10,100 under the HRA/PPO, and $9,800 under the HSA/PPO. But if your expenses are lower, and you don’t meet the plan’s OOP maxi-mum—you could be ahead of the game by choosing an account-based plan.
These are only examples intended to illustrate the factors you should consider. You should take into account your own circumstances and expected health plan utilization. And if you’re covering family
members—especially young children—you’ll want to consider the habits of all family members on your plan. While wellness visits for children aren’t subject to the deductible (if the plan is not grand-fathered under the Affordable Care Act), you’ll still need to account for anticipated treatment for each member of the family, not just you.
SUMMARYNow that you know more about the types of plans available and the variables included in the plans, you have the tools needed to determine whether you should change your current coverage. As you ap-proach your open-enrollment period, take these three steps:
Examine your current coverage.
Research the options your company provides (contact your company’s HR Department for details, reach out to your master executive council R&I Committee, or e-mail R&[email protected] with your questions).
Review the health-care spend-ing for you and your family (if applicable) for the past few years.
Once you’ve done that, you should have enough information to begin plugging in the variables and determining which health plan is the best one for your cover-age needs. And remember, there’s an open-enrollment period every year. If you change plans and find that it ends up being a wrong decision, you can always change back next year.
ALPA INSURANCE: Optional Plans for MembersOne final variable to consider is that ALPA offers supplemental insurance to all members in good standing. ALPA’s plans are designed by pilots, for pilots, and include disability, critical illness, accident, and loss of license. If you’re worried about the financial impact of a major illness or accident while on a high-deductible health plan, ALPA insurance might be able to help. Depending on the cost of your airline’s health-care plans, you might be able to change to a high-deductible plan and purchase ALPA insurance for a lower total cost than a lower-deductible plan, allowing you to save money while still keeping your peace of mind. Learn more at memberinsurance.alpa.org.
A Day of RemembranceBy John Perkinson, Senior Staff Writer
A LPA pilots, family mem-bers, friends, and staff gathered in the Remem-
brance Garden at the Associa-tion’s Herndon, Va., offices for a commemorative ceremony on the morning of September 11 to honor those who perished in the 9/11 terrorist attacks. Under a bright blue sky reminiscent of the one in New York; Washington, D.C.; and southwestern Pennsylvania on that fateful day, attendees paid their respects.
“The sting of those horrific acts, no matter how long ago, will never fade,” said Capt. Tim
Air Line Pilot Feature Article » 9/11 REMEMBRANCE
In Memoriam: Sept. 11, 2001UNITED FLIGHT 93• Capt. Jason Dahl
• F/O LeRoy Homer, Jr.
• Flight Attendant Lorraine Bay
• Flight Attendant Sandra Bradshaw
• Flight Attendant Wanda Green
• Flight Attendant CeeCee Lyles
• Flight Attendant Deborah Welsh
UNITED FLIGHT 175• Capt. Victor Saracini
• F/O Michael Horrocks
• Flight Attendant Robert Fangman
• Flight Attendant Amy Jarret
• Flight Attendant Amy King
• Flight Attendant Kathryn Laborie
• Flight Attendant Alfred Marchand
• Flight Attendant Michael Tarrou
• Flight Attendant Alicia Titus
• Customer Service Agent Marianne MacFarlane
• Customer Service Agent Jesus Sanchez
AMERICAN FLIGHT 11• Capt. John Ogonowski
• F/O Thomas McGuiness
• Flight Attendant Barbara Arestegui
• Flight Attendant Jeffrey Collman
• Flight Attendant Sara Low
• Flight Attendant Karen Martin
• Flight Attendant Kathleen Nicosia
• Flight Attendant Betty Ong
• Flight Attendant Jean Roger
• Flight Attendant Dianne Snyder
• Flight Attendant Madeline “Amy” Sweeney
AMERICAN FLIGHT 77• Capt. Charles Burlingame
• F/O David Charlebois
• Flight Attendant Michele Heidenberger
• Flight Attendant Jennifer Lewis
• Flight Attendant Kenneth Lewis
• Flight Attendant Renee May
Above: Attend-ees gather at ALPA’s Remembrance Garden to honor those who lost their lives in the terrorist attacks of Sept. 11, 2001.
Right: Capt. Joe DePete, ALPA’s first vice president, rings a bell after Capt. Tim Canoll, ALPA’s president, reads the name of each crewmember and employee.
Capt. Tim Canoll, ALPA’s president, front, addresses those attending the ceremony in ALPA’s Remembrance Garden as Capt. Joseph Genovese (United), his pilot group’s executive administrator, looks on.
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Canoll, ALPA’s president, in his opening remarks, adding, “even with the passage of time, it’s a constant reminder of why vigilance is so critical and why the safety and security work we do is so important.
“Mothers, fathers, sons,
daughters, husbands, wives—loved ones died a senseless death, but their legacy is a reminder of how we are able to take some meaning from that day,” Canoll noted. “And on this 16th anniversary, we recommit to serve as the
guardians of their legacy and our profession.”
Capt. Joseph Genovese (United), executive admin-istrator for his pilot group’s Master Executive Council, also addressed the gathering. “We honor the legacy of those lost by continuing to work as a country to make the world a safer place,” he observed. “As time goes on, we grow, we get stronger, we heal, but we will always remember.”
In honor of those lost, Capt. Joe DePete, ALPA’s first vice president, rang a bell after Canoll read aloud each of the names of the pilots, flight attendants, and other airline employees aboard United Airlines Flights 93 and 175 and American Airlines Flights 11 and 77 on Sept. 11, 2001.
In addition to pilot officers, Ron Rindfleisch from the Association’s Representation Department participated in the ceremony, asking those gathered to recall where they were that day. He recounted an exchange he had with his youngest daughter and the importance of reminding “our youth what happened on that horrific day.” He then led a brief prayer.
Jody Krazeise from ALPA’s IT Operations and Services Department led the group in singing Amazing Grace. She
later led ceremony attend-ees in singing America the Beautiful as Capt. Bill Couette, ALPA’s vice president–admin-istration/secretary, and Capt. Randy Helling, the Associa-tion’s vice president–finance/treasurer, placed a wreath at the center of the memorial.
ALPA’s Remembrance Gar-den was dedicated on Sept. 11, 2006, the fifth anniversary of 9/11. The area includes a 10-ton stone from a western Pennsyl-vania quarry, split to represent the break that the terrorist attacks created in the airline industry. Two sections of steel I-beams from the World Trade Centers and a piece of the Pen-tagon’s outer wall also adorn the garden.
Nearly 3,000 perished, in-cluding 265 on four airplanes, and more than 6,000 were injured as a result of the 9/11 terrorist attacks. In addition to the ceremony at ALPA’s offices, 9/11 memorials and services are held around the country each year to ensure that as a nation we never forget.
Capt. Randy Helling, ALPA’s vice president–finance/treasurer, left, and Capt. Bill Couette, ALPA’s vice president–administration/secre-tary, place a wreath at the memorial.
Remembering
9/11For more coverage and photos of ALPA’s 9/11 ceremony, go to www.alpa.org/911ceremony.
To view a video of the event, go to www.youtube.com/watch?v=CjkmuDFNl1E.
Highlighting the Importance of Serving ALPA Members
“Y ou’re usually the first person from ALPA your members will
meet,” F/O Kandy Bernskoet-ter (FedEx Express), chair of the Membership Committee, told attendees at the Member-ship Seminar, held in mid-Sep-tember at ALPA’s Herndon, Va., Conference Center (see page 8). She stressed their “important responsibility” as they present the first impression about ALPA to fellow pilots.
With that in mind, Bern-skoetter—along with Capt. Bill Couette, ALPA’s vice president–administration/sec-retary; Membership Commit-tee members; and staff from ALPA’s Membership Adminis-tration Department—took the volunteers on a two-day jour-ney to fill their “ALPA toolbox” with the items necessary for success. Couette promised, “We’re going to give you all the tools you need—names and faces and phone numbers—so that you can do what your pilots need.” Added Bernskoet-ter, “You don’t need to know everything—just who to ask
when you have a question.”Erin Philbin, ALPA’s Mem-
bership Administration super-visor, introduced staff mem-bers throughout the event as they presented information or provided instruction. She told pilots, “It’s our job this week to get you the information you want…. Every master executive council [MEC] is unique, so anything we can do to make your job easier—we’ll do it.” Philbin and Amy Eno, ALPA’s Balloting & Local Council Support supervisor, reiterated a message that has become al-most a theme for their depart-ments: “Help us help you.”
Thirty-four pilot volun-teers—membership commit-tee chairs and members, MEC and local executive council of-ficers, a communications com-mittee chair, and a military af-fairs committee chair—from 17 pilot groups attended the event. And while there were many first-time attendees, more than a few seasoned vol-unteers were at the meeting to learn more and share their expertise. “This was one of the
largest Membership Seminars we’ve had,” said Bernskoetter. “It’s exciting to see the level of involvement and the work ethic of these volunteers.”
Representatives from two of ALPA’s newest pilot groups were impressed with the support available to them through the union. Capt. Dave Colquhoun and F/O Mike Taylor, chair and member of the WestJet MEC’s Membership Committee, were at ALPA’s Herndon offices for the first time. “Seeing the building and everyone here was impressive,” said Colquhoun. “We came wanting to find out what other pilot groups are doing and what we can learn from them. We all seem to have similar issues, so being able to share strategies is extremely useful.” Taylor added, “A lot of what we learned reinforced that we’re on the right track, which is very helpful. And the Canadian side of issues was presented as well, which we certainly appreciated.”
Frontier has yet to establish a Membership Committee,
leaving those duties to F/O Andrew Fischenberg, his pilot group’s secretary-treasurer. “I’m here to start building our Membership Commit-tee by learning how other pilot groups are doing it,” he explained. “We’ve been able to hear about what others are doing for their new hires, for example, and we can learn from that and benefit from it.” He was impressed with the openness of his colleagues and their willingness to share. “There are so many robust and high-quality ideas in this room,” he said.
Sessions during the two days covered new-hire briefings, administrative aspects such as classifications and financial obligations, and how to access member reports. Attendees also learned more about the benefits of ALPA membership and how to best communicate them to new members—things like pilot assistance, the orange card, insurance, the Pilots for Pilots Emergency Relief Fund, and Known Crewmember®. They heard from F/O Drew Everett (Hawaiian), ALPA’s Furloughed Pilots Support Network coordinator, and F/O David Pond (United), ALPA’s Veterans Affairs chairman, about the important work those two groups are doing.
Throughout the seminar, the need to support each and every ALPA member and provide them the services they require was reinforced. “With-out our 57,000-plus members, we wouldn’t be sitting here today,” said Couette. “We need to let them know that we are with them throughout their entire career, from the time they sign the membership ap-plication until they retire.”
—Kevin Cuddihy, Contributing Writer
Attendees listen intently to Capt. Bill Couette, ALPA's vice president–administration/secretary, as he discusses ALPA’s vast toolbox.
F/O Kandy Bernskoetter (FedEx Express), ALPA’s Membership Commit-tee chair, stresses the importance of making a good first impression.
“ We need to let [our pilots] know that we are with them throughout their entire career,
from the time they sign the membership application until they retire.”CAPT. BILL COUETTE, ALPA VICE PRESIDENT–ADMINISTRATION/SECRETARY
M embers from multiple ALPA national commit-tees and approximately
20 ALPA pilot groups joined the National Gay Pilots Asso-ciation (NGPA) in mid-August to show their support for and engage with the next genera-tion of airline pilots at the first NGPA Diversity & Inclusion Summit. Continuing the conversation about diversity and nondiscrimination in the cockpit was F/O Richard Swin-dell (United), chair of ALPA’s Professional Development Group; F/O Kandy Bernskoet-ter (FedEx Express), chair of ALPA’s Membership Commit-tee; and Capt. John Rosenberg (Delta), chair emeritus of ALPA’s Professional Standards Committee.
Swindell noted that the As-sociation’s three main reasons for attending the summit were safety, pilot supply, and cultural change. “Any form of discrimination or prejudice can cause a communication
breakdown that can trigger a degradation of operational safety,” he said, observing that increasing the diversity of air-line pilots could help overcome discrimination and increase the number of potential pilots. “ALPA is encouraging the best and brightest to consider a career in aviation as an airline pilot,” Swindell commented. “By demonstrating that this is an open and inclusive industry and profession, it encourages more people to enter our ranks and increase the available pool of pilots in North America,” he said. “As an Association, we must acknowledge and understand corporate and flight deck demographic changes, as well as our own membership cultural changes. It’s important to understand what these changes mean to our industry, our profession, and our union.”
Bernskoetter pointed out that attending events like the NGPA summit dovetails with
ALPA’s strategic plan by help-ing to build unity and advance a diversified workforce today and in the future.
The event included presen-tations from pilots, small-group discussions, and an open conversation about inclusion, diversity, and dis-crimination. “The authenticity of the participants was really powerful,” said Bernskoetter. “Hearing their stories and experiences gave me a further understanding of, empathy for, and acceptance of what
they’ve had to deal with.”
Bernskoetter was enthused to
see such a wide variety of ALPA participation at the event. “There was a great col-lection of airlines and a huge ALPA presence,” she said. “The big airlines, fee-for-depar-tures, and Canadian carriers attended the event—both management and pilots. It was great to see so many ALPA faces addressing the issues and participating.”
Rosenberg discussed the shared goals of the two as-sociations and explained how working together can benefit pilots and the industry. He noted that many pilots in attendance seemed to have a misconception about how professional standards com-mittees work. “We were able to educate them,” he explained, “on the breadth of Professional Standards and how much it can help. When you sit in the cockpit, we’re all wearing the same uniform as a profes-sional pilot. If you have an issue, we’ll address it just like
we would for anyone else.” Rosenberg also spoke about
the training videos the NGPA offered to all summit attend-ees and about ALPA poten-tially using them for Profes-sional Standards purposes, saying they were “absolutely, without question” valuable. “We’re discussing developing a module on inclusiveness and awareness.”
One of the NGPA’s major goals in hosting the event was to communicate the importance of messaging, according to F/O David Pettet (American), NGPA’s executive director. “We discussed ways to communicate both with pilots and with management. We encouraged people to talk about it—to be open about it,” he explained. “It becomes a much more inclusive environ-ment.
“Our desire was to have ALPA involved at the national level because it comes back to messaging,” said Pettet. “We wanted ALPA to contribute to the discussion, be part of the conversation, and help guide the implementation of any ideas. We need to all collective-ly work on this industrywide issue together.”
“We’re constantly looking for opportunities to engage throughout the industry to promote diversity and inclusion within the airline piloting profession,” said Swindell, “Events such as the NGPA summit, Oshkosh, the Women in Aviation confer-ence, and the Organization of Black Aerospace Profession-als conference provide ALPA with a distinct opportunity to engage with our members and potential future members of the Association.”
—Kevin Cuddihy, Contributing Writer
Attendees share their ex-periences at the first National Gay Pilots Association Diver-sity & Inclusion Summit.
To find out how you can promote diversity and inclusion in the
ALPA Pilots Pay It Forward At OBAP ConferenceA s part of the Associa-
tion’s continuing efforts to secure the future of
the profession, ALPA pilot representatives recently at-tended the Organization of Black Aerospace Profession-als (OBAP) 41st Convention and Career Exposition. With more than 3,000 members, OBAP focuses on promoting diversity in the aerospace and aviation industries, and the convention was an excellent opportunity for the Associa-tion to reconnect with current members, promote the union to non-ALPA pilots, and talk with those interested in learn-ing more about becoming an airline pilot.
Capt. Jephter Augustin (Mesa), who’s been a mem-
ber of OBAP for three years, volunteered at ALPA’s booth during this year’s conference. “You need to remember that when you’re looking ahead trying to further your own ca-reer, there’s always someone behind you who needs advice and encouragement,” he said.
Augustin credited his own mentor, Capt. J. George “Paco” Sulmers (United, Ret.), a founding member of OBAP, with giving him the encour-agement he needed to gain confidence and a stronger belief in himself. Augustin went on to become a Mesa flight instructor prior to being hired as a pilot for the airline in 2015.
In addition to the many presentations and events,
the OBAP convention pro-vided numerous chances to network. Last year, Capt. Lou Freeman (Southwest), who stopped by the Association’s booth, mentioned that his son, Stephen, had graduated from Purdue University with his flight certificates but needed to build flight time. The first African-American chief pilot at a U.S. carrier, Freeman acknowledged that things had changed since he started flying and that he wasn’t sure what Stephen’s next step should be. That simple conversation led to a tip from Augustin about an employment opportunity at a
flight school.This year, the younger Free-
man stopped by to personally thank Augustin for his advice. Stephen is now a certified flight instructor working in New Smyrna Beach, Fla. He believes that the skills he’s de-veloping while increasing his flying time will significantly enhance his résumé when he’s ready to take that next step to become an airline pilot.
Supporting the next generation of aviators was a recurring theme at this year’s OBAP conference. Looking at his own career, Augustin re-marked, “As I talk about what it’s like to be an airline pilot, I hope I’m able to add value to someone else’s personal and professional growth, just as others, like Paco, did for me.”
—ALPA Staff
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From left, Capt. J. George “Paco” Sulmers (United, Ret.) and Capt. Jephter Augustin (Mesa) pose for a photo in front of ALPA’s booth during the Organization of Black Aerospace Professionals 41st Convention and Career Exposition.
From left, Capt. Lou Freeman (Southwest), Capt. Jephter Augustin (Mesa), and Stephen Freeman meet up at this year’s Organization of Black Aerospace Professionals Convention and Career Exposition.
Become a MentorAre you interested in mentoring and helping to inspire the next generation of airline pilots? Contact ALPA’s Education Committee at [email protected] or go to www.clearedtodream.org for more information.
Air Wisconsin Pilot Commands Sea and SkyBy John Perkinson, Senior Staff Writer
A s pilot-in-command, Capt. Bob Burgess (Air Wisconsin) wears two distinct hats. When he isn’t
flying CL65s out of his home domicile in Philadelphia, Pa., Burgess is an excursion vessel captain for a company based in Minnesota. He helms each of the opera-tion’s six charter yachts, carrying as many as 150 passengers on Lake Minnetonka and the Mississippi River, in and around Minneapolis.
Burgess acknowledged that he has to carefully manage both his flying and seafaring work schedules, noting, “I’m senior at Air Wisconsin so I can bid the flying I need. I try to focus my vacation in the summertime. Basically, I give my flight schedule to the cruise company, which accommodates me as best it can.”
As an excursion vessel captain, Burgess manages a crew of up to 10, depending on the boat’s size and the number of passengers. Primarily overseeing dinner cruises and party charters, his responsi-bilities include monitoring the safety and security of the operation, providing some narration during the trip, and engag-ing with the ship’s passengers. Cruises typically run up to three hours, with an additional hour for prep and another to wrap up. Burgess usually runs two to three cruises a day.
Among his various certificates and ratings, Burgess holds a 100-ton U.S. Coast Guard near coastal master license, which he secured more than 30 years ago. “In Minnesota, you need a Coast Guard license to run boats for hire carrying passengers on the Mississippi. On Lake Minnetonka, you can either have a Coast Guard license or a state-issued boating pilot’s license,” which he attained when he first got started in the business.
Burgess moved to the Minneapolis area at the age of 13. His family’s new house
was just three blocks from a local marina on Lake Minnetonka, where he spent his next eight years working. He eventually be-came the marina manager. “The boating thing kind of evolved over time. I knew the lake really well. A local company had a house boat it asked me to run,” said Burgess, who networked with other lake-side businesses and said that one job led to another.
The ship captain also developed a fascination with flying. Burgess was initially interested in enlist-ing in the Air Force but, with 20/30 vision, could only be considered for a weapons officer or navigator position at the time. He declined, opting instead to build his hours flight instructing and later flew Beechcraft King Airs for a small Syracuse, N.Y., operation. Burgess went on to fly for Air Cargo Masters, AirVantage, and the new iteration of Pan Am, endur-ing numerous furloughs before moving on to Air Wisconsin in 1998.
How do boating and flying compare? Burgess acknowledged that “there’s more involvement in customer service on the boat because you manage the food and beverages and you communicate more frequently with your passengers. With flying, passenger interaction is mostly handled by the cabin crew.” He added that in both scenarios, you monitor the vehicle’s systems, watch the weather, and make timely safety decisions. You also navigate while watching out for other craft, “so there are a lot of parallels,” he added.
“My ALPA volunteerism is another
important component in all of this,” remarked Burgess, who’s the chair of both Air Wisconsin’s Local Executive Council 51 and the pilot group’s Negotiating Com-mittee. The consummate time manager, he said, “I’m busy seven days a week and spend at least two to four hours each day reviewing e-mails and responding to questions, especially now” with the Air Wisconsin pilot group in late-stage media-tion for a new contract.
As for colorful experiences afloat, Bur-gess commented, “I’ve seen everything but birth and death. Like the airline business, you learn to hope for the best and plan for the worst.” He recalled one boating excur-sion dealing with a large, rowdy group of passengers. “I literally had to wrestle several people away from the controls,” he said, noting that he returned the ship to the dock early that day.
As to whether he prefers boating or flying, Burgess said that it’s nice to do both. He confided, “If I could only do one, I wouldn’t appreciate either as much.”
One of six vessels Burgess operates, the Queen of Excelsior II is an 80-ton, 125-passenger ship.
Burgess mans the helm of the Queen of Excelsior, a 100-ton, 150-passenger charter yacht.
October 2017 Air Line Pilot » 43
RecentlyRetired
Compiled from information provided by ALPA’s Membership Administration Department. Names only appear once in the print version.
Fellow ALPA Members,
Every year we say good-bye to many proud airline pilots who retire from the ranks of airline flying. They have served the profession during some of our industry’s most turbulent times.
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