ALPA President Comments on Pension Threat

16th Aug 2004

The following statement was issued by
Capt. Duane E. Woerth, president of the Air Line Pilots Association,
International (ALPA), on the heels of reports that United Airlines may
terminate its pilots’ pensions:
“Let me be clear: airline managements must stop threatening to terminate
pension plans. Instead, they should focus on addressing the serious
challenges facing the industry, including weak business plans, oil prices,
health care costs, federal security taxes, pension funding, and Air
Transportation Stabilization Board (ATSB) loan guarantees.

“The management at United Airlines and other carriers suffer from a lack
of imagination in addressing economic challenges and have utterly failed
to take advantage of the savings they have already received from pilots
and other employees. The first order of business must be for airline
companies to create an effective strategy that uses these employee
investments to make companies more viable.

“There is no question that the airline industry is enduring unprecedented
financial stress. Airlines are bearing the brunt of costs for mandated
security upgrades, suffering from skyrocketing fuel prices, and covering
exploding health care costs for employees. Nonetheless, they must set
about developing a strategy that truly addresses these manifold pressures
and looks beyond the knee-jerk reaction of demanding that pilots give even
more than they already have.

“Moreover, the problems facing the airline industry require more than a
series of ‘Band-Aid’ fixes. Congress and the Administration must follow up
previous commitments with long-term solutions to help the industry recover
and prosper.

“The most obvious example is the commitment that the Administration made
prior to the terrorist attacks on 9/11 to modernize the national airspace
system. This funding would have reduced congestion and delays, and enabled
airlines to grow. Instead, after 9/11, key initiatives were put on hold or
cancelled. Now, once again, our airlines are prisoners of an outmoded and
saturated system—unable to take advantage of growing customer demand.
This situation is particularly acute at O’Hare, a key hub for United.


“Furthermore, the ATSB’s decision not to grant the loan guarantee to
United Airlines was a political and economic failure. Ironically, the ATSB
denied United’s request in the name of protecting taxpayers, ignoring the
will of Congress. Yet if the company terminates its employee pensions,
taxpayers may be forced to pay many more times the amount of those
guarantees in real money.

“Congress must develop a national energy policy to stabilize and lower the
price of fuel for the airline industry and for the rest of the economy. It
must also provide a comprehensive health care plan for Americans that
enables airlines to keep its employees healthy at reasonable costs.

“Additionally, Congress must preserve foreign ownership limits and
cabotage protections, vital to the ability of U.S. carriers to compete and
provide vital strategic lift capacity to the military. Congress should
also provide tax relief to the airline industry, which has borne much of
the cost of federally-mandated security enhancements and has already
contributed $2 billion to national security efforts.

“Lastly, Congress must follow the stop-gap pension legislation passed this
year with a permanent fix to the crushing deficit reduction contribution
rules for defined benefit pension plans. Failure to do so will mean this
government is turning its back on millions of Americans and their families.

“In order to help keep the airline industry strong and safeguard its
enormous contribution to the economy and security of this nation, we need
to take a clear look at the real problems and identify creative solutions.
Squeezing pilots for additional concessions when they’ve already given so
much is not the answer.”


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