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Flying Lower on Airline Paychecks

Workers long used to generous union contracts are struggling with expenses as their compensation and benefits are cut back.

February 28, 2005|Adam Geller | Associated Press

DES PLAINES, Ill. — The phone line in Dave Meyers' third-floor walk-up has been turned off to save cash, and the brown velour sofas, bought secondhand, are bare in a few spots. Still, the modest apartment is about what you'd expect for a single guy who spends most of what he earns.

The problem for Meyers -- a United Airlines ramp worker whose pay has been cut twice in the last two years -- is that he consistently spends more. Child support is nearly $700 a month, deducted from his paycheck. Of the remaining $1,600 in take-home pay, rent claims another $700, and is unpaid although it's the 11th of the month. His checking account is overdrawn.

The financial juggling has Meyers fuming. This is not what he expected when he went to work at United 7 1/2 years ago, trading the headaches of running his own contracting business for the security of working for someone else. The rules were clear, he said, feverishly paging through an old union contract for the language to prove it.

That contract, however, was written for a company, UAL Corp., and an industry very different from the one workers find themselves in today. It is a reality that Meyers and many others -- demoralized by pay and benefit cuts -- remain reluctant to accept.

"Everything keeps going up, man," Meyers said. "And we're just going backwards."

The airline industry -- battered by record fuel prices, low-cost competition, the lingering effects of the Sept. 11 attacks and other problems -- is squeezing workers long accustomed to generous union-negotiated pay, robust pensions and enviable job security.

Analysts say the workers have no choice but to adjust. They note that industries from steel to telecommunications are also cutting benefits, a trend that is likely to continue.

"I do not think this is the last time an American industry will go through this kind of upheaval," said Darryl Jenkins, a professor of airline management at Embry Riddle Aeronautical University in Daytona Beach, Fla. "This world is very much changing and unstable, and in those kinds of circumstances, this kind of change is inevitable."

Airline workers tell similar stories of their start in the business, and the romance and prestige and financial rewards that came with the job. But that was before the industry launched into a maelstrom of cost cutting.

Most of those cuts have been directed at the labor costs that now account for nearly a third of airlines' operating costs. In January, United baggage handlers, ramp workers and others took on a temporary 11.5% pay cut. That is on top of an 18% cut two years ago. At USAirways Group Inc., flight attendants agreed to pay cuts of about 9% late last year, their third cut in 30 months.

The average US Airways flight attendant now makes about $34,000 a year, compared with $45,000 to $52,000 a few years ago, union officials say.

Some airline employees, such as lead ramp workers at United, still earn close to $20 an hour after the cuts -- more than $41,000 a year before overtime pay -- and acknowledge they'd be hard-pressed to find a comparable job in the current economy.

Compensation for the next generation of workers is unlikely to approach that. When US Airways held a job fair this month outside Philadelphia to sign up new ramp workers, it was offering pay of $9.59 an hour.

The cuts are a painful side effect of efforts by established carriers, known in the industry as legacy airlines, to make themselves more like JetBlue Airways Corp. and other low-cost upstarts, industry analysts say.

"US Air takes someone who was making $20 an hour and pays them $12 an hour, which might even be more than JetBlue, and that person remembers, being human, that they used to make $20," said Michael E. Levine, a former top executive at three airlines and now a law professor at Yale University.

"It's one of the challenges of the legacy network airlines," he said. "They start with a labor force that has grown used to and felt entitled to work on terms that customers simply won't support."

But workers, many who have logged years with the airlines and intended to stay until retirement, say they can't just ditch the mortgages, tuition bills and other expenses based on yesterday's paychecks.

Consider the monthly budgeting worries of Eileen Zolinas, a 16-year flight attendant for US Airways whose husband, a mechanic for the airline, died in 1993.

Without enough seniority, Zolinas flies "on reserve" -- airline-speak for whenever she's called -- and gets paid for 71 hours of flight time monthly, though she usually flies less. She figures that she needs to work at least 95 hours a month to pay the bills.

The limited hours and lower hourly wages have pared her annual earnings from about $40,000 a few years ago to about $31,000 last year. With the newest pay cut, she expects them to drop to about $26,000.

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