The Perverse Reason United Will Fly a 787 Newark – LA, and How It’s Killed an Airline Before

Treat your employees well, treat them fairly, and treat them flexibly. They’ll treat your customers well. Your customers will want to come back, and you’ll make more money. It’s not exactly that simple of course. An airline needs to operate a schedule customers want, reliably, and loyalty programs and corporate agreements factor. But it also isn’t not that simple either, and unhappy employees are going to chase away customers no matter how much you invest in planes and seats.

You can treat your employees well with or without unions. Unions can help or hurt employees. Airlines remain one of the most heavily unionized industries. Pilot unions have significant power, an airline cannot operate without its pilots and pilots cannot simply be replaced — their knowledge is unique and in high demand, and safety rules require significant certifications on an airline’s specific aircraft. Flight attendants are more easily replaced and so their unions do not nearly have as much power.

After American’s pilots staged a work slowdown during the carrier’s bankruptcy, it was clear that CEO Tom Horton was going to have to go. United’s pilots made it impossible for CEO Jim Goodwin to stay on 15 years ago.


United Boeing 757

Here’s the thing. It’s often not the wages that’ll kill a company. It’s the work rules. Take a hotel in New York that’s forced to change the services it offers. It may need to close down a restaurant entirely, for a year, in order to re-open it with a new concept. Or it may need to eliminate room service in order to bring room service back under a new labor agreement.

In writing about United’s 90th birthday I was reminded that it was Pat Patterson who advocated turning over crew scheduling to unions in the airline industry.

No matter what kind of story you tell about TWA’s demise, from Carl Icahn to flight 800, the airline had two fundamental problems:

  • Revenue: St. Louis simply didn’t have the business travel anymore that competitor airline hubs did.

  • Cost: Despite paying below average wages, they actually had above average labor costs.

Bringing in less revenue than your competitors, while having higher costs, is a recipe for failure even if customers become skittish about booking you for a short period and even if you have an agreement where your former major shareholder can buy your tickets at a 45% discount and resell them for a profit (what became ‘LowestFares.com’).

It’s easy to place the blame for TWA’s demise at the feet of Carl Icahn, that villain makes it easy to forget that after its 1992 and 1995 bankruptcies, after it stopped flying Boeing 747s, it still operated its 747 maintenance facility because its contract with mechanics required this.

American still needs to fully integrate its pilots into a single workforce, something the US Airways merger should finally permit but that US Airways and America West never managed.

United has still failed to integrate flight attendants from the Continental and United sides of the operation. And that has real world consequences.


United 747 in San Francisco

Brian Sumers writes about the strange phenomenon of a United Boeing 787 flying between Newark and Los Angeles starting in JUne.

It turns out that because the two airlines’ flight attendants are on different contracts, one of those 787s has to be assigned to legacy United airlines flight attendants. But since it’s ex-Continental flight attendants operating West Coast – Asia routes, they can’t put the plane on one of those routes operated by United flight attendants or else the plane would have to sit while the crew got sufficient rest to fly back (or they’d have to shuttle extra crew for the returns).

Since the merger, United has been assigning all 787s to the Continental side. Executives apparently did this good faith, believing all the planes would have gone to Continental had there been no merger. However, the AFA recently filed a grievance. The union suspected at least some of the 787s should have gone to the United side. This is important to flight attendants, because the 787s fly some of the cushiest routes, like trans-Pacific flights from San Francisco and Los Angeles to Asia.

United checked, and realized it had made a mistake – but only on one 787. So starting in June, it is transferring one 787 from the Continental side to the United side.

This is now an operational issue. United has 28 Boeing 787s, but one of them must be isolated from the rest. It can only be flown by United-side flight attendants.


United Airlines Boeing 787

Apparently in August there will be 2 more 787s assigned to be crewed by legacy United flight attendants and they’ll operate as a sub-fleet on San Francisco-Taipei.

An airline cannot operate assigning $180 million (list) aircraft to suboptimal routes, or inefficiently operating subfleets. That puts them in the position of a TWA, keeping open a 747 maintenance base without any 747s. Unions fight tooth and nail for these things but they don’t actually raise the wages of their members.

And this is one reason why it really matters for United to finally get a single contract with its flight attendants, six years into the merger of United and Continental.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. We await “The Perverse Reason The World’s Most Respected Points and Miles Blogger Continues to Employ Annoying Clickbait Titles”.

    C’mon, Gary, at least give part of the information in the title. Like “How pre-merger workrules force scheduling decisions at United’. I promise I’ll still click. Those experts telling you that clicks are all that matters are wrong. They are thinking short term only. They fail to notice that readers who reach their limit of tolerance for click bait leave. They don’t come back for a long, long time. You can’t measure that but it’s very real.

  2. I hate clickbait titles too, but I thought this title was entirely appropriate for the article.

  3. So Gary, I still have no idea why UA is flying the 787 EWR-LAX. Since I did click and read through, care to enlighten us?

  4. Gary I enjoy reading your blog but this is one of the worst articles I have read of yours. It is United’s poor schedule planning that requires one to be assigned to UA and not CO FAs, UA was changing options and delivery dates and could have easily made it so that two sUA 787s were delivered in close order but chose not to instead. This one union issue is not going to ruin United, it will be the management not the Unions that ruin the airline by poor management, especially with how little power AFA has. TWA went out of business for way more reasons than unions, if you simplify it to that you are sadly mistaken.

  5. United paid $3 mil in compensation to UA FAs (about $180 per FA) for mis-assigning the plane for a couple months, why not just keep paying the reparations and keep the plane on TPAC?

  6. I don’t think Gary is simplifying it to Unions causing the issue. In fact, my takeaway from the article was that he is stating that United management ought to learn a lesson from TWA and get a handle on their rev/costs. I believe Gary uses this domestic 787 as an example as to how UA mgmt needs to negotiate/settle a contract with the FA. Not sure where he sides, but generally that kind of language is union oriented.

  7. As usual you’re clueless about labor relations.

    Amazing in a post about UA you spend more bandwidth discussing TW. So you’re the know all on TW IAM CBAs and their fleet, MX planning and operations? Have a copy of their CBA and seniority list from 1990s?

  8. Guys, can you please stop calling out Gary for using clickbait titles?

    I asked him about this before and he swears that he’s not doing it on purpose. He says he doesn’t give more than 10 seconds of thought to his titles. It’s not intentional; he’s just too busy to come up with a normal title. Cut him some slack, geez.

    And ease up on his analysis of the subject matter, ok? So what if he’s out of his depth? Gary is an explorer. It takes guts to wade into unfamiliar territory and pretend to have all the answers. If you guys spent less time worrying about being sensible and informed and spent more time telling your friends and family to get the Chase Sapphire Preferred, you too could become a foremost expert in the prestigious field of miles, points, and frequent business travel. But you dolts would rather spend time bashing this great man, right? Idiots.

    We all wanted to be a blogger when we grew up, and for many of us that dream did not come true. So take your displaced anger somewhere else and leave Gary Leff alone.

  9. Not the least bit clueless. You’re the one who is off base, and judging by the comments other readers have left you aren’t giving a concise, easy to read, relatable post to most of your audience. Most people here only care their is a domestic 787 route, especially on a popular transcon. And the CBA is the CBA, UA negotiated with the AFA-CWA certain contractual provisions, and their is a process in place. Pig pile all you want, but they have contractual provisions that are legally binding under the railway labor act (RLA). If AX or JPM unilaterally changed the terms of your affiliate marketing compensation that you had agreed upon in a binding contract how would you feel if they violated your agreement?

    Sure it may seem silly (and I agree it is), but they’re upholding the integrity of the contract. If UA management evades one article, AFA gives an inch UA takes a mile. It’s a dangerous precedent to set for both parties.

    Have you ever worked in the airline industry? Ever supervised employees covered under a CBA under the RLA? If you think a single contractual article covering fleet allocation between the legacy subsidiaries has the potential to take UA down the path of TW, as your post implies, you’re the one who doesn’t get it. Educate yourself on the IAM M&R agreement at TWA.

  10. I think you guys that are disappointed by the title don’t understand secondary definitions of perverse in the business or economic sense

  11. Well why are you begrudging AFA-CWA for encorcing their own CBA? Like I said, the CBA is the CBA and UA agreed to this, and the members covered under the agreement [collectively] ratified it. If AFA-CWA allows UA to evade the CBA they could be exposed to a duty for fair representation suit. For someone who has never worked for an airline you really need to stick to hawking credit cards, your “expertise” and “thought leadership” regarding commercial affairs in the airline industry shows how minimal your understanding is.

  12. Actually I beleive new 787s have to fly so many Domestic hours to ensure they are safe internationally.

  13. The SFO-TPE route used to be served by UA crew that includes many mandarin speaking FAs who were originally based in TPE, and some based in SFO. Now the CO crew that serve on the new 789s do not have enough mandarin speaking FAs. The CO crew also in general lacks international long haul experience and it shows throughout my flight on 4/7 UA871 BF cabin. It is actually a good news to SFO-TPE passengers that some 789s will be staffed by UA FAs.

  14. This whole problem wouldn’t even exist if UA had stopped stalling on negotiating a contract with its flight attends. Maybe now this will be incentive to negotiate in good faith instead of using stall tactics.

  15. Having been a FA at TW during the Icahn years, it was NOT any of the CBAs that contributed to the demise – to a Corp raider such as CI, TW was worth more dead than alive – period. He sold off routes as assets, he sold TW headquarters and moved them to HIS real estate to collect the rent, he reduced the operation to a shell of it’s former self and didn’t give a damn about employees or Contracts.

  16. And while now also subsequently being a FA at pre-mergerUA (awaiting full merger status with pmCO and pmCMI FAs after 4 years of contract negotiations post a merger not one single employee of the 3 airlines asked for)… it is NOT the cobtract(s) which harm (sometimes fatally). Rather it is the decisions of management and individuals in management pretending to have ‘vision’ which dictate success, failure, or mediocrity. How does one explain CONSISTENT positive business results for year after year after year at THE most highly unionized airline in the industry – Southwest – having the HIGHEST pay, BEST benefit package for medical, HAPPIEST employees, SHORTEST DUTY PERIODS for their FAs (10 hrs vs 14.5 for domestic flight schedules at pmUA – which management seeks to lengthen… and FAs don’t receive ‘overtime’) yet SWA is consistently PROFITABLE! Go figure.

  17. And while now also subsequently being a FA at pre-mergerUA (awaiting full merger status with pmCO and pmCMI FAs after 4 years of contract negotiations post a merger not one single employee of the 3 airlines asked for)… it is NOT the contract(s) which harm (sometimes fatally). Rather it is the decisions of management and individuals in management pretending to have ‘vision’ which dictate success, failure, or mediocrity. How does one explain CONSISTENT positive business results for year after year after year at THE most highly unionized airline in the industry – Southwest – having the HIGHEST pay, BEST benefit package for medical, HAPPIEST employees, SHORTEST DUTY PERIODS for their FAs (10 hrs vs 14.5 for domestic flight schedules at pmUA – which management seeks to lengthen… and FAs don’t receive ‘overtime’) yet SWA is consistently PROFITABLE! Go figure.

    Whether the 787 allocation debacle was an’ oversight’ or a calculated decision to circumvent agreements (THAT accountability will be solely determined by our new CEO), the bottomline is that merger agreements between management and workforce(s) are obligated to adherence – legally. Personalize it to YOUR business… are not YOU obligated to follow an agreement? Is your boss not obligated? Is your customer not obligated? Contracts between FA and airline management are NO different. Unless you are the boss, do you really want to be at work 14.5 hours if you are paid ONLY for the number of Flight hours that YOUR BOSS DICTATES? No, fas don’t get paid unless they are flying during a flight, not in between flights – so more EFFICIENT scheduling of flights rather than LONGER duty days with many hours of unpaid sit time between flights is what pays our bills!

  18. Whether the 787 allocation debacle was an’ oversight’ or a calculated decision to circumvent agreements (THAT accountability will be solely determined by our new CEO), the bottomline is that merger agreements between management and workforce(s) are obligated to adherence – legally. Personalize it to YOUR business… are not YOU obligated to follow an agreement? Is your boss not obligated? Is your customer not obligated? Contracts between FA and airline management are NO different. Unless you are the boss, do you really want to be at work 14.5 hours if you are paid ONLY for the number of Flight hours that YOUR BOSS DICTATES? No, fas don’t get paid unless they are flying during a flight, not in between flights – so more EFFICIENT scheduling of flights rather than LONGER duty days with many hours of unpaid sit time between flights is what pays our bills!

  19. Someone posted the 787 issue is “silly” – it’s not. The issue however IS indicative of the inefficiencies by the Company of running essentially 3 separate airlines under the (publicized) guise of being one airline. There are airplane allocations based on which airplanes belonged to which pre-merger entity (CAL, UAL, CMI) and/or which future airplane orders were made by which entity at the time of the merger. Only workers from the respective pre-merger airline could work on that designated pre-merger ‘metal’. Until the 3 pilot groups had a single negotiated merged contract (becoming one pilot workgroup) they could not fly airplanes other than what their pre-merger status dictated. That contract took 2 1/2 years to negotiate with management. The same situation now applies to the Flight Attendant workgroups (3 coming under 1 combined contract). Until that happens the fact of WHOSE 787 that is (or ANY other airplane for that matter) is not “silly” and effects the 22,000 employees and MILLIONS of customers who may see an airplane and wonder WHY has the flight been delayed with all these fas sitting around – it’s because not having a single contract means there may not be the pre-merger FAs available for THAT airplane. Let management know that you find it taking way too long for these contract talks to be taking. Guess what – every United Flight Attendant agrees with you.

  20. Sub UA and Sub CO technitions at United are still separate since the merger of UA and CO! They keep the planes flying safely and are not mentioned in your blog!

  21. Actually, the 787 drama goes in deeper. There was a deal with Inflight VP Sam, and CAL AFA head Marcus, to keep the 787 flying on the CAL side. CAL side flies cheaper than UAL side. So Marcus allowed Sam to enter into deals of knowing what was going on with joint contracts. Marcus knew that CAL side with get profit sharing but disguised it with 18 hour duty days. Yes, 18 hours on duty, to keep the 787 on their side. AFA kept asking the company about the 787 orders, and the company never responded with a real response, and actually delaying it with a purpose and intent. Marcus resigned due to many issues that lead the crumb trail to Willis tower, as he was to produce items that were going to put him in the position of guilt with trying to decertify AFA, by having Cal employees ask the DOL to investigate AFA for wrong doings that never happened. Marcus resigned before the items were to be handed over. Sounds like Guilt to me. Fast forward, this threw a monkey wrench in their (company and Marcus) agenda. Sam arrived to Dulles airport on Jan 11, 2016 to tell UAL employees that the 787s were CALs, and that would be the end of it. It was not so, as AFA found out.

  22. The simple, underlying reasons that this has happened is that CO took over UA and then were caught out when sUA and sCO voted for AFA as their representative. It was an acrimonious vote, which included allegations of underhanded funding and backing to the AFA “opponent”. There were simply more sUA FA’s at the time, and many sCO’s also voted for AFA, and the new management didn’t like it. So, in a panel discussion not long ago, as the question came up, the panel laughed and basically said it was cheaper to keep them separate and, in less than verbal ways, it was also read to mean, at each other’s throats. Fast forward and now “United” is hiring like crazy, hundreds of new FA’s. All doing training in IAH and all sCO and all getting the CO brainwashing. It sure looks like CO, nee, UAL is trying to dilute the pool until such time as the vote can be redone and hopefully get a more pliable union to their needs, which the CO union was thought to be very weak in comparison to AFA, and then get rid of AFA. It is backfiring already though as there are quite a few I know that have recently been hired at sCO and are itching for the pay scale that sUA has. Money talks. That is the simplified reason for all of the 787 broohaha.

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