Employee call backs and hiring have begun, but labor woes still plague the industry as especially at Comair, Mesaba (MAIR), Atlantic Southeast, and Northwest (NWACQ). Airlines hired 727 pilots in August, according to AIR, Inc, which specializes in tracking pilot hiring. The third highest hiring month this year, August saw majors and nationals - which include regional operators - lead the hiring with 457 pilots with more expected later this year. Even so, the Department of Transportation reported that airline employment continues to fall with passenger carriers employing 5.9 percent fewer workers in July 2006 than in July 2005, the 19th consecutive month that employee levels dropped.

As Delta (DALQ) issued call backs for both pilots and flight attendants, Republic Airways Holdings (RJET) is hosting recruiting sessions this week in Greensboro, N.C. as part of its plans to grow its flight attendant corps by more than 300. All three of RJETs carriers - Chautauqua, Republic and Shuttle America - expect to add flight attendants for its partnership programs with American (AMR), Continental (CAL), Delta, United (UAUA) and US Airways (LCC).

"The regional airline industry continues to generate the bulk of the growth and jobs in aviation and as we lead the sector in expanding and flying even larger jets, we are excited about the future of the airline and the opportunities for our employees," said Republic CEO Brian Bedford. Chautauqua has a crew base of 37 flight attendants at Piedmont Triad International Airport, the site of the recruiting drive. Its corps of 1,100 attendants will grow to 1,400 by 2007. The three carriers also have flight attendant bases at Indianapolis, Louisville, St. Louis, LaGuardia, Columbus, Richmond, O'Hare, Washington National, Pittsburgh and Orlando.

Delta, which expects to emerge from bankruptcy in the first half of 2007, is recalling up to 65 pilots and 200 flight attendants as it expands operations. This is the second pilot recall for the carrier having returned 64 pilots to its active roster in June. Delta has added more than 50 new international routes recently and is expected to announce more routes later this year in its effort to build a profitable network.

Despite the good news for Delta crews, Connection carrier Atlantic Southeast pilots greeted the fourth anniversary without a contract with informational picketing at Hartsfield and the opening a strike center in Atlanta. The airline's pilots have been in negotiations since September 2002, although the airline was acquired by SkyWest Airlines (SKYW) this time last year. Negotiations were conducted with the National Mediation Board since May 2004, talks that were recessed this past May. The Board indicated the two sides were too far apart on open sections of the contract to make any progress.

Bankruptcy rulings have impacted progress at both Mesaba and its major-carrier partner Northwest. Mesaba's flight attendants managed to overturn an earlier ruling allowing the airline to abrogate its labor agreements. (RAN, July 25. p.7) However, the U.S. District Court agreed that the airline needed 19.4 percent in wage and benefit cuts over six years and confirmed the need for an eight percent profit margin, according to the airline. Flight attendants charge that such reductions would reduce the annual income of some flight attendants with a family of four to under $10,000 after paying for insurance benefits.

While the court overturned the bankruptcy court's ruling on abrogating contracts, it cited the need to discuss with unions wage restoration or snap backs, already underway with the carrier's pilots. The court is also reviewing union concerns about the relationship between Mesaba and its parent company MAIR Holdings (MAIR) which unions contend is taking tens of millions of dollars from Mesaba and paying exorbitant management salaries. (RAN, July 24, p.7) Mesaba said before the decision was handed down, it invited all three unions to meet to share detailed information on the company's cash position.

In the meantime, the Air Line Pilots Association (ALPA) authorized a $2 million fund each for pilot groups at both Mesaba and Comair. "Our union is resisting a protracted and deliberate campaign to whipsaw pilots by playing them off against each other using bankruptcy courts and 'request for proposal' mechanisms to perpetuate the fee- for-departure business model," said ALPA President Captain Duane Woerth. "By pledging $2 million to each group, we are putting the industry on notice that we are in this fight to win. We will give our pilots the resources they need to stand up to these divisive tactics."

Woerth indicated that the airline labor environment has turned a corner. "We have reached a point in our economic recovery where we are no longer completely driven by the disastrous tidal waves that engulfed our industry for the past five years," he said. "Management can no longer plead helplessness and poverty as justification for making outrageous demands at the table. Airline workers paid a terrible price to keep this industry afloat, but now it is time to draw a line beyond which we will not be pushed. The pilots at Mesaba and Comair have the desire and the resolve to stand up to predatory management tactics. Now they have the means to do so, too."

The Mesaba money is in addition to a previous grant of $2 million designed to help pilots stave off "a management ploy to use bankruptcy to impose draconian pay cuts."

Comair and ASA pilots recently joined together to share information on management contract proposals as ALPA developed a task force on the impact of fee-for-departure contracts on pilot wages and benefits. (RAN, July 24, p.1)

"Management is under the illusion that it can force us to make hasty decisions," said Captain J.C. Lawson chair of the Comair pilots' unit. "They seem to forget that these are the same pilots who persevered through years of negotiations, and eventually, a strike in 2001. Another work stoppage is the last thing we want, but we're not going to just fold our cards and give in, either. ALPA has given us the staying power to achieve our goals and we intend to use it."

Meanwhile, a separate court also granted Northwest's request for a preliminary injunction to prevent a threatened strike or work actions. For their part, flight attendants are continuing their strike and disruption preparations while appealing the latest decision and have asked the National Mediation Board to declare an impasse and release them from formal mediation. Northwest and the unions representing flight attendants have reached two tentative agreements designed to meet the targeted $195 million in annual labor cost savings, which have been rejected by rank and file. The court allowed Northwest to implement the cuts unilaterally. The airline has also reached agreement with ALPA, the International Association of Machinists and Aerospace Workers (IAM), Aircraft Technical Support Association (ATSA) the Transport Workers Union (TWU) and the Norwest Airlines Meteorologists Association (NAMA). Two rounds of salaried and management employee pay and benefits cuts have also been imposed and needed aircraft maintenance employee labor cost savings have been accomplished, all in an effort to reach a goal of achieving $1.4 billion in annual labor savings. Since entering bankruptcy in September 2005, the airline has worked to realize $2.5 billion in annual business improvements in order to return the company to sustained profitability.

Finally American pilots began what is expected to be a two-year negotiating process to win back some of the $660 million in annual concessions made when the airline narrowly avoided bankruptcy in 2003. The contract is amendable in 2008, according to Reuters. Key issues center on compensation, job and retirement security and what the pilots call "gain sharing," sharing the rewards resulting from their sacrifices. High on the agenda are the $90 million in bonuses awarded this year to about 1,000 top managers as well as the 23 percent pay raise granted AMR CEO Gerard Arpey. APA President Denis Breslin said the bonuses unraveled all the work American did in improving labor relations in the effort to avoid bankruptcy. (RAN, June 5, p.5) Reuters quoted American as saying its labor costs are among the highest in the industry owing to the slashes made at bankrupt and former bankrupt carriers.