Airbubba
16th Jul 2001, 23:41
I spoke yesterday with a friend at Cathay, he painted a pretty bleak picture, this article may be right...
_____________________________________
July 16, 2001
Asia's Airline Unions See Little Result
From Following in U.S. Labor Path
By ZACH COLEMAN
Staff Reporter of THE WALL STREET JOURNAL
HONG KONG -- It took 37 years for pilots at Cathay Pacific Airways to vote to take industrial action against the airline.
They may wish they had waited longer.
While their counterparts in the U.S. and Europe are winning ever-larger raises and a say in mergers and business strategies despite a steep global airline slowdown, Asian airline unions have much less to show for their activism.
Unions at four Asian airlines have gone on strike in the last month, but at three of the four -- Japan Airlines, Japan Air System and Korean Air Lines -- union members returned to work without the higher pay they had demanded. The raises won at the fourth, Asiana Airlines of South Korea, fell far short of union goals, although the carrier's flight attendants did win the right, literally, to let their hair down.
As Cathay pilots are learning, Asian airline unions are no match for their employers. Their power is checked by a combination of legal, political, economic and cultural factors. The unions have had a few successes: The Cathay union has twice forced the carrier to cancel lower wage scales for pilot subgroups, and the pilots' unions at Korean Air and Asiana won legal recognition and raises last year. Unions at Air India have staved off outsourcing initiatives, forcing the carrier to keep far more employees than other carriers its size.
De-Fanging Unions
But more often the airlines have in the end gotten their way, frequently with government backing. In April, a "work-to-rule" campaign by pilots at Pakistan International Airlines forced a change in the airline's management, the reopening of contract talks and benefit improvements. Soon afterward, however, the government suspended union activities at the airline. After pilots struck for two weeks in 1998, Philippine Airlines, armed with a government back-to-work order, fired most of them. "Before, they used to be the king," says airline President Avelino L. Zapanta. "We virtually don't have any pilots' union anymore."
Just last month, the Korean Air pilots ran out of luck with the administration of South Korean President Kim Dae Jung, an advocate of labor while an opposition leader. The government declared their strike illegal and arrested several union leaders. The strike came to an abrupt end as the airline announced it would fire those who didn't return immediately to work. In exchange, the union received token concessions: equal seats on a board that sets flight rules and future reductions in the number of foreign pilots, something Korean Air said it planned to do anyway.
Airline workers elsewhere in Asia find even less room to act. Japan Airlines and rival All Nippon Airways have plowed forward with shifting operations to new low-cost units, recruiting cheaper foreign labor and, for All Nippon, imposing companywide salary cuts. Typical union actions include wearing protest buttons, submitting petitions or, as last month, using a megaphone to harangue company shareholders outside the annual meeting. A 24-hour strike by one JAL pilots' union the week before didn't affect flights, partly because two other cockpit unions aren't allowed to strike. Pilots at Singapore Airlines sat through 65 arbitration sessions over two and a half years without a contract before finally reaching a settlement in May. In China, the government does not permit independent trade unions.
So far, Hong Kong government officials have restricted their involvement in the Cathay dispute to exhorting the pilots to work out and end their job action. However, the legal environment is formidable enough.
To combat Cathay pilots' work-to-rule campaign -- meant to prompt delays by meticulously sticking to flight safety rules -- the airline has chartered planes and crew from nine other airlines to operate flights on its behalf and cut extended flight legs that are vulnerable to delays. More directly, Cathay has fired 52 of its 1,600 pilots since July 5, including several union leaders and negotiators, and forsaken the collapsed talks with the union by implementing a package of raises and benefit improvements on its own.
"The union has been totally de-fanged by Cathay," says Jim Eckes, managing director of consultancy Indoswiss Aviation in Hong Kong.
Because Hong Kong lacks collective bargaining, the union has no voice to represent pilots up for disciplinary action. Furthermore, employees who participate in union actions during work hours have few legal protections against being fired, according to Wilson W.S. Chow, associate law professor at the University of Hong Kong. The lack of collective bargaining, however, also means the union is not a party to Cathay's pilot contracts and so is free to take industrial action during the term of contract without fear of lawsuit, admits Tony Tyler, the airline's corporate development director.
Confucian Values
The Cathay pilots' last big confrontation with management didn't go well either. In 1999, an unofficial two-week mass sickout came to an end when Cathay forced old hires to accept large pay cuts or be fired. The confrontation cost Cathay about 500 million Hong Kong dollars (US$64.1 million) for rebooking passengers and chartering other airlines' planes, but the airline said the savings in senior-pilot pay totaled HK$1.4 billion. In a similar confrontation that year at Ansett New Zealand, the pilots' union yielded to management demands for wage cuts, longer working hours and the elimination of one-third of the work force after a monthlong lockout.
The lack of market integration in Asia and the related simplicity of Asian airline route systems deprive unions in the region of some leverage enjoyed by their Western counterparts. Because UAL Corp.'s United Airlines, for example, loops flights through five domestic hubs, pilot disruptions ripple through its network with far more effect than they do at Cathay, where nearly all flights come in and out of Hong Kong.
After United's pilots won raises making them the best paid in the U.S. last year, pilots at rival Delta Air Lines insisted on topping them last month. Similarly, the victory of Lufthansa's pilots in winning 2001 raises of about 30% last month stepped up pressure on Iberia and British Airways to boost the paychecks of their pilots. But, says Mr. Tyler of Cathay, concessions by his carrier will only raise its costs relative to its competitors. And unions at Ansett Australia and Air India that tried to follow in the footsteps of United's workers, who now hold 45% of the parent company's stock and two board seats, didn't receive serious consideration of their buyout bids.
Carlos J. Chua, commercial director for the Association of Asia Pacific Airlines, says culture has a role in disarming Asian unions, citing "Confucian values" and a greater employee identification with their employer. "They don't have that prima donna attitude," he says. But with four strikes in a month, it seems the inhibition against action "is gradually breaking down," he admits.
_____________________________________
July 16, 2001
Asia's Airline Unions See Little Result
From Following in U.S. Labor Path
By ZACH COLEMAN
Staff Reporter of THE WALL STREET JOURNAL
HONG KONG -- It took 37 years for pilots at Cathay Pacific Airways to vote to take industrial action against the airline.
They may wish they had waited longer.
While their counterparts in the U.S. and Europe are winning ever-larger raises and a say in mergers and business strategies despite a steep global airline slowdown, Asian airline unions have much less to show for their activism.
Unions at four Asian airlines have gone on strike in the last month, but at three of the four -- Japan Airlines, Japan Air System and Korean Air Lines -- union members returned to work without the higher pay they had demanded. The raises won at the fourth, Asiana Airlines of South Korea, fell far short of union goals, although the carrier's flight attendants did win the right, literally, to let their hair down.
As Cathay pilots are learning, Asian airline unions are no match for their employers. Their power is checked by a combination of legal, political, economic and cultural factors. The unions have had a few successes: The Cathay union has twice forced the carrier to cancel lower wage scales for pilot subgroups, and the pilots' unions at Korean Air and Asiana won legal recognition and raises last year. Unions at Air India have staved off outsourcing initiatives, forcing the carrier to keep far more employees than other carriers its size.
De-Fanging Unions
But more often the airlines have in the end gotten their way, frequently with government backing. In April, a "work-to-rule" campaign by pilots at Pakistan International Airlines forced a change in the airline's management, the reopening of contract talks and benefit improvements. Soon afterward, however, the government suspended union activities at the airline. After pilots struck for two weeks in 1998, Philippine Airlines, armed with a government back-to-work order, fired most of them. "Before, they used to be the king," says airline President Avelino L. Zapanta. "We virtually don't have any pilots' union anymore."
Just last month, the Korean Air pilots ran out of luck with the administration of South Korean President Kim Dae Jung, an advocate of labor while an opposition leader. The government declared their strike illegal and arrested several union leaders. The strike came to an abrupt end as the airline announced it would fire those who didn't return immediately to work. In exchange, the union received token concessions: equal seats on a board that sets flight rules and future reductions in the number of foreign pilots, something Korean Air said it planned to do anyway.
Airline workers elsewhere in Asia find even less room to act. Japan Airlines and rival All Nippon Airways have plowed forward with shifting operations to new low-cost units, recruiting cheaper foreign labor and, for All Nippon, imposing companywide salary cuts. Typical union actions include wearing protest buttons, submitting petitions or, as last month, using a megaphone to harangue company shareholders outside the annual meeting. A 24-hour strike by one JAL pilots' union the week before didn't affect flights, partly because two other cockpit unions aren't allowed to strike. Pilots at Singapore Airlines sat through 65 arbitration sessions over two and a half years without a contract before finally reaching a settlement in May. In China, the government does not permit independent trade unions.
So far, Hong Kong government officials have restricted their involvement in the Cathay dispute to exhorting the pilots to work out and end their job action. However, the legal environment is formidable enough.
To combat Cathay pilots' work-to-rule campaign -- meant to prompt delays by meticulously sticking to flight safety rules -- the airline has chartered planes and crew from nine other airlines to operate flights on its behalf and cut extended flight legs that are vulnerable to delays. More directly, Cathay has fired 52 of its 1,600 pilots since July 5, including several union leaders and negotiators, and forsaken the collapsed talks with the union by implementing a package of raises and benefit improvements on its own.
"The union has been totally de-fanged by Cathay," says Jim Eckes, managing director of consultancy Indoswiss Aviation in Hong Kong.
Because Hong Kong lacks collective bargaining, the union has no voice to represent pilots up for disciplinary action. Furthermore, employees who participate in union actions during work hours have few legal protections against being fired, according to Wilson W.S. Chow, associate law professor at the University of Hong Kong. The lack of collective bargaining, however, also means the union is not a party to Cathay's pilot contracts and so is free to take industrial action during the term of contract without fear of lawsuit, admits Tony Tyler, the airline's corporate development director.
Confucian Values
The Cathay pilots' last big confrontation with management didn't go well either. In 1999, an unofficial two-week mass sickout came to an end when Cathay forced old hires to accept large pay cuts or be fired. The confrontation cost Cathay about 500 million Hong Kong dollars (US$64.1 million) for rebooking passengers and chartering other airlines' planes, but the airline said the savings in senior-pilot pay totaled HK$1.4 billion. In a similar confrontation that year at Ansett New Zealand, the pilots' union yielded to management demands for wage cuts, longer working hours and the elimination of one-third of the work force after a monthlong lockout.
The lack of market integration in Asia and the related simplicity of Asian airline route systems deprive unions in the region of some leverage enjoyed by their Western counterparts. Because UAL Corp.'s United Airlines, for example, loops flights through five domestic hubs, pilot disruptions ripple through its network with far more effect than they do at Cathay, where nearly all flights come in and out of Hong Kong.
After United's pilots won raises making them the best paid in the U.S. last year, pilots at rival Delta Air Lines insisted on topping them last month. Similarly, the victory of Lufthansa's pilots in winning 2001 raises of about 30% last month stepped up pressure on Iberia and British Airways to boost the paychecks of their pilots. But, says Mr. Tyler of Cathay, concessions by his carrier will only raise its costs relative to its competitors. And unions at Ansett Australia and Air India that tried to follow in the footsteps of United's workers, who now hold 45% of the parent company's stock and two board seats, didn't receive serious consideration of their buyout bids.
Carlos J. Chua, commercial director for the Association of Asia Pacific Airlines, says culture has a role in disarming Asian unions, citing "Confucian values" and a greater employee identification with their employer. "They don't have that prima donna attitude," he says. But with four strikes in a month, it seems the inhibition against action "is gradually breaking down," he admits.