Release #04.034
August 13, 2004

WASHINGTON, D.C.—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."

Founded in 1931, ALPA is the world’s largest pilot union, representing 64,000 pilots at 42 airlines in the United States and Canada. Visit the ALPA website at www.alpa.org.

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ALPA Contact: Linda Shotwell, 703-481-4439