LONDON – Known as the Union Buster according to Aaron Bernstein in his book titled “Grounded: Frank Lorenzo and the Destruction of Eastern Airlines”, Frank Lorenzo’s name receives surprised looks when discussed.
His reputation and mission in the industry have been covered by numerous publications such as the New York Times, Business Month, Wall Street Journal, and other books such as ‘Hard Landing’, ‘Rapid Descent’ and ‘Rebels and Reformers of the Airways.
Still, most of them have painted a dim and shadowed light on the man. Instead, the commercial success of creating peanut fares, permitting cheap travel in a deregulated market, and enabling the then Continental Airlines to become today’s United Airlines, 3rd biggest airline in the United States amidst many of America’s airline failures is overlooked and forgotten for what is one of the world’s greatest aviation leaders of the century.
Lorenzo was the first entrepreneur of his time to break into a regulated market among what then was considered a ‘club’. He is what the industry looks up to today and sees as the norm which back then was not the norm.
His accomplishments and success have unfortunately been run over by both politics and unions too though in Washington not enabling the public to get a full idea of what Frank has truly done to enable not only the average joe to travel but the whole country is dramatically changing the aviation industry permitting cheaper travel.
To put it most simply as R.E.G Davies said in ‘Rebels and Reformers of the Airways’ when interviewing Frank Lorenzo in 1984 “If there is a man of destiny in the airline world today that man is Frank Lorenzo”
It is an honor, in that case, to present Frank’s insight on Deregulation repeating itself today as new airlines enter the market due to COVID, his insight and thoughts on Unions in the airline industry, and what has changed since Deregulation.
The Interview
How do you feel today about the aviation industry?
“The business has changed a lot from my day. Today it’s a very concentrated industry.
There were 18 airlines when I first started out, not at the end of our Continental reign so to speak. Today it’s very concentrated but you know Deregulation has worked, has worked its purpose. Fares are very attractive and there are many different opportunities.
Bottom line I am pretty positive about the changes taking place in the industry. You know it’s very different. Seats are narrower. Even First Class is Narrower, except on companies like Emirates and Etihad.
Then you get into really what’s happened since Deregulation, whats changed the business, and that’s where you really have to look at the significant changes which I think you can broaden it down to 2 things.
Now there’s been a lot of 2nd-degree things that have happened because of this, but you really have to look at one Deregulation and what that did to the industry. Number 2 being Technology, which has made massive changes to the industry.
It’s hard to believe this but back in my day we would take a reservation from a person over the phone and hope that they would show up. We would plan a sort of No-Show factor.
If we could run an 82% load factor we were lucky and then we had a lot of No-Shows, we had people who didn’t show up. It was very hard to predict and sometimes very few people would show up and we would always overbook a flight if the flight were full because otherwise, you couldn’t survive.
Technology has obviously changed and now we give our credit cards wherever you have a reservation. You buy a seat today as opposed to just making a reservation. That’s just the beginning though.
You go all through technology. It has dramatically changed and now you see the tremendous decrease in employees at the airports with a whole raft of other changes coming now where we’re going to board our flights using your boarding pass and come to like United you will still have 1-2 people at the counter but they are just to help people if they have problems scanning and the day will come there may be one and even none.
Maybe there will be a turnstile. Technology has done major things to the business.
Then Deregulation as I said before had a number of second-degree effects.
Obviously, Deregulation produced tremendous competition among carriers, and obviously, it introduced lower costs, it forced carriers to think of costs for the first time, provided low-cost competition, and is now providing ultra low-fares.
You know you have all the variations of it.
Then you have these big companies to at least, not necessarily survive because none of them could survive the 90’s. We were the first ones to go through bankruptcy in order to survive but American, United Delta, they’ve merged but they have had to go through bankruptcies on their own way.
Deregulation has had a number of effects but another one that is overlooked, that Deregulation caused is management. It has changed management. Back in the old days, it was a clubby environment.
I used to be viewed as not a member of the club. I would sit down at the end of the table when the club met at the Air Transport Association meetings in Washington and today all of the companies are run by entrepreneurs. Look at United with Scott Kirby.
Scott’s very much of an entrepreneur. He’s trying to do all kinds of venture capital deals, to make an investment for the new helicopter commuters so you have a lot of these sorts of examples and obviously the low-cost carriers are filled with them. Guys like Neelman.
Back in the old days, we brought in very modest making money in our scale but today it has totally changed. Today carriers are focused on returning capital to shareholders. American got spanked for defaulting its share buy-backs. Doug Parker is a classic entrepreneur.
He started out with a little airline running America West. He’s another interesting story.
So anyway a lot of changes and again those are really second-degree changes but basically, it’s airline Deregulation that created this competitive atmosphere where you had to change management.”
U.S Deregulation happened in the late 70’s and European Deregulation in the 90’s. Do you think European aviation hasn’t changed much though compared to American aviation due to limited change among European national carriers’ pay structure?
“European deregulation came later, no question. It has been different because you didn’t have the ability to have mergers. The mergers that have taken place such as Air France, British Airways.
It’s a little awkward to describe them in the sense of mergers because they are conglomerates of companies like Lufthansa acquiring Swissair. I knew the guy who was the head of Swissair well and today, Swiss has to keep their identity as part of the agreement with Switzerland.
They can’t have the identity of Lufthansa even though Lufthansa owns the company. Its operation is very separate from its credit. Air France is similar to KLM. They’ve had an identity that they’ve had to fight with. It has been different but it has had the same streaks.
You’ve had low-cost carriers. You can argue that maybe they were slower in coming to place in Europe but nevertheless, they’ve had a huge impact. Just look at Ryanair and the carriers in the UK.
The UK has had a little more deregulation and has come faster there as well as Ireland but it is very very similar and has now spread all over the world because before we tried to start an airline in India.
The Indians had become very interested in taking advantage of deregulation and all that until they saw the impact that it was having on their national carriers, which at the time were 2.
Indian Air was an internal airline and then Air India was the external airline. They merged the two but they slowed down the Deregulation and approval of new airlines when it became clear that they were having a really tough time with the economics of their national carriers.
It has spread all over though. We are seeing Asia, Air Asia, all the Start-Ups in Asia. China as they say has capitalism with its own effects, with its own style but nevertheless these huge companies are there. “
What signs of “history repeating itself” have come up since deregulation have you seen with: Start-up airlines, expanding into the market (charter airlines in the case of deregulation) as there are over 25 new airlines in Europe and Breeze and Avelo in the U.S starting operations.
“You’ve had many fold up in the United States, many smaller companies go by the wayside and many are very successful. Valuejet is a good example. That started up and flamed out.
Spirit startup has done very well and obviously, Jetblue is one of the classics and then we have all these new companies. I would say between Spirit and Allegiant, those are the 2 most successful Ultra-Low Fare and then Jetblue.
In fact, Jetblue has had a problem because they have kind of emphasized service, wider seats, this sort of thing and they have found themselves being caught in the middle as they say in the marketing point of view where they are neither fish nor fry.
Super Low-Cost nor are they legacy carriers with all the benefits of a legacy carrier which are name, promotion, frequent flyer programs, and all that stuff.
I think Europe is getting the same kind of thing. There will be some weeding out in the process. Volotea is a little bit of an example there as they started out just within Spain pretty much.
Avelo Airlines is a great example of that though. Their costs are ⅓ of what they would have been before COVID. The aircraft leasing market has come down a lot. Costs have come down.”
Legacy airlines returning to profitability (as the Low-cost strategy grows in Europe) with examples of Benjamin Smith at Air France (Cost cutter, strategic thinker as you), reorganization at Lufthansa or the recent change in management seen in British Airways leading to a real democratisation of the aviation market for smaller players as they are losing government support.
“It’s very tough because labor negotiations with these heavily unionized companies are tough.
When these legacy carriers have many low-cost carriers really eating at them it’s very tough because the Unions don’t recognize the Low-Cost carriers. In some cases there is a better relationship with the union, the unions are more understanding.
Delta is a good example. I think somewhat better and actually, they are only partially unionized and that’s one of the reasons too. They are not fully unionized. The pilots and flight attendants are not unionized or maybe the agents.
Anyway, there is a significant portion in Delta that isn’t unionized. It’s very tough. The airlines have no negotiating position with pilots. The pilot’s compensation basically sets the stage for everything else.
If you’re in United Airlines today and you’re trying to remain competitive cost-wise, and pilots want to make these significant increases in their pay, in benefits, and all the other proposals that raise costs.
You can’t have a hardline and frighten the strike. There is no such thing anymore. Basically, Unions dictate what the costs are going to be. Airlines don’t like to admit that.
It’s all covered up nicely in aggressive negotiations and all that stuff which makes it difficult over time, these bigger companies are going to find more and more pressure on their bottom line. That’s why all these companies went through bankruptcy 10-15 years ago.
The mergers also obviously provided a lot of benefits. It’s diversifying their route networks a lot which is very important. These companies also have heavy international operations and then COVID.
There is the whole COVID equation. COVID has certainly shown that the government is willing to commit and help these companies. What people don’t generally understand is that the major reason why that took place is not because of any love of the carriers.
It’s because of power with the unions. The unions were very strong in Washington, in getting protection for their employees and implementing these no furlough clauses where you couldn’t furlough more than 70%.
The money had to be used for wages which were not really economically efficient. Airlines should have been given the opportunity to adjust themselves to new technology and new demand.
Anyway, the unions did a good job at convincing Washington. You would always see the presidents parading into the White House but what you wouldn’t see are the union lobbyists parading behind the scene.
The CEO of Air France, took the job with the understanding that he had to bring down and deal with the costs about 15 years ago. It was out of control at Air France during those days.
On a Monday he went to the government and said “Look this is our plan, these are the labor costs we will plan to propose to the union.” The government gave the ok and said yes absolutely.
On Tuesday they implemented it and on Tuesday the unions went on strike. They closed down Orly and Charles De Gaulle. They went out onto the runways and stopped at the airport. Wednesday the government fired him. So much for standing up to the unions. It’s very tough in Europe.”
Low-cost carriers seeing either a bigger strain on labor (Ryanair) while the likes of WIZZ pushing other carriers to their limit with their cheaper cost structure (linked to New York Air and opposition received by unions at Texas International).
“New York Air was the first airline started after the Deregulation. We had a small airline, Texas International which we were trying to find a home. Meanwhile, we had all this cash and that’s why we set up a holding company under the name ‘Texas Air’.
Then we set up New York Air. I had always believed that there was an opportunity in the North East big time because it was big old Eastern Airlines who was the competitor with very high prices but also **** service in those days.
They had a shuttle that did very well between New York, Washington, and Boston. Onboard though the only thing the flight attendant would do was take fares. They would go down the aisle mechanically back and forth and take a mechanical imprint on a piece of paper of your credit card and would get a receipt for your ticket.
One copy would go to the customer and another would go to the airline. That’s all they did. They didn’t serve anything on the airplane because they were taking fares as they went through the cabin during the flight.
Everybody loved it though because they had this promise that if you came to the airport for the every-hour shuttle and there weren’t any seats, they would roll out another airplane and they did a couple of times but it was a great promotion and business people loved it.
Here we came along with a New York Air Shuttle and in fact we offered donuts, coffee.
Treating the passenger in a very civilized way is part of our business strategy. A little more comfortable seats.
We had an ad which was a great ad with a contortionist and we put him on board an Eastern airplane and we had him sit in one of the Eastern seats and he’s there sitting in the seat and putting his leg behind his neck.
We have this picture with this guy saying “You don’t have to be like him in an Eastern Airlines airplane. You could sit comfortably in New York Air”. This drove Eastern crazy.
That same sort of stuff that went on in the U.S is happening in Europe and all over the world now. Forget about just those markets. It’s repeating again. You didn’t really have any new carriers start-up the last 10-15 years as it has been very quiet with regards to new start-ups in the U.S.
Now you have these new companies, Breeze and Avelo not using the hub concept at all. In Avelo’s case, there’s concentration in certain cities but it’s not a connecting hub. They don’t connect flights.
They just have the equipment, facilities, essential ops except for at an out-of-the-way airport in Avelo’s case at Burbank California which is a great airport and also starting up now New Haven away from big international airports.
You know people are tired of these huge international airports and Los Angeles is a good example. For the LA airport, it’s parking for shit. Going through all the crap we’re familiar with. Burbank you walk onboard and it’s great.
Wizz Air is taking advantage of it though. Ryanair has had to raise its costs. It’s an evolution and it goes on over time. Now Ryanair has had a tough guy running the company that’s done a good job with keeping costs down but nevertheless, their costs aren’t like what they were.
You know you have to pay your employees usually their seniority increases as time goes on so guess what happens to an older airline. Employees on average are older so that itself increases your costs. People forget about that.
Southwest by the way in the U.S is having a very tough time competing with some of these new guys and they are having a number of operational issues too but Southwest is still an extremely well-run company doing a great job.
The higher-end business market though they don’t touch which is conversely one of the reasons why they are doing much better right now because the United, American’s, Delta, cater to the big guys.
More to the big business traffic, frequent flyers, and all that type of stuff while Southwest is more the average joe wanting to buy basic transportation and often out of small airports. Islip in New York, a good example out on Long Island.
Wizz has done the same kind of stuff. Volotea, all small cities point-to-point and like you were pointing out as a good example Gibraltar to Bilbao.”
So you think Deregulation in a way is repeating itself because airlines are going after smaller cities but for the profit of it rather than the subsidies?
“Exactly, and with the proper airplanes. Airplanes that didn’t exist and this is very important. Airplanes that didn’t exist in those days. The small jets for example. Efficient and they’re not huge airplanes. The small commuter jet has been a basic change.
Now aircraft designs have changed.
A good example is United. When we built the Continental hub in Newark we were limited to DC-10’s, big airplanes, or 747’s which we flew to London.
We only had these big airplanes but 10 years later they had redesigned and recertified the 757 in those days giving it overwater capability and there you had an airplane with less than 200 seats.
You had 145 seats and so they could fly from Newark to Edinburgh and Newark to smaller cities in Europe.
This decision came after me. I was part of the earlier decision-making when we started up in Spain.
We pressed the go-ahead for Spain with a big airplane but again it would have come much sooner had we had the technology which we didn’t have then but the technology hasn’t changed as the ability to take these twin-engined airplanes and also the approvals by the government as the government became much more open to allowing overwater flights with 2 engine airplanes.”
Upcoming acquisitions of legacy carriers bound to happen (as during deregulation).
“The legacy carriers no. I trust that it’s getting more difficult in the U.S and in Europe too. I think among the major companies and then for them then to acquire one of the smaller ones, it’s very tough to do because you have to look at the market values.
Smaller companies have these huge market valuations in relation to their revenues. Much more value so do I see low-cost carriers getting together among themselves, yes I can very much see deals there for sure.
The other thing too is if you’re a big carrier as Pan Am found out and you try to buy a small carrier you lose their cost structure and have lost a lot of their advantage. Preserving the cost structure of the two companies getting together is an extremely important consideration. The U.S, Europe, doesn’t matter where it is.
If somebody acquired Wizz and you have a bunch of airplanes and good routes but their cost structure and their drive and the way they hold the company is so smart and very entrepreneurial. Passenger oriented.”
New strategies in place, as companies go from business to a completely leisure-oriented network strategy(as during deregulation, smaller routes to prime city routes with more hub and spoke), including legacy carriers.
“This is a very important factor because you see history has proven that it is very difficult to have a start-up luxury focusing on business and there have been times it has been tried.
An airline started up against us from Houston to New York by a guy I knew very very well. He put in a lot of money. It was a beautiful first-class service on a 727 and he had a couple of flights a day and he forgot that one of the biggest luxuries that a high-end traveler wants is a lot of flights.
He wants flight flexibility you know. He doesn’t want to be told “Well there’s a flight at 9:00 and then there’s a flight at 14:00 and then there’s a flight at 18:00”. Today United and in those days Continental between Houston and New York would have during normal times 13, 14, 15 flights a day.
You get a lot of time flexibility and if there’s one airplane problem or the guy runs late, he can take a later flight if you know as a business traveler. That’s a very key factor that you know people often forget about.
I remember one time flying on that airline that you were talking about. Again it was owned by a friend. You could have had a bowling alley in there. There were so few passengers on board. When the flight attendants would walk it was terrible.
Leisure travel, that’s high-end but on the leisure side, price is an enormous stimulus in an enormous way. You know we see it today in the start-up particularly Avelo. They have been starting up at $29 fares, $49 fares and they’re focused on the leisure market.
They are not focused on the business market because that’s the one that is the obvious market to tell. It isn’t just people on vacation, it’s people wanting to go from A to B to see somebody, to get together, VFR as we call it (Visiting Family, Friends and Relatives). It’s all of that.
You’re seeing it today. There is more leisure traffic than there was pre-covid in the U.S on some airlines. I was very concerned that the average ticket that these bigger carriers would generate because of the lack of all the first-class and upfront passengers.
In fact, the average yield is higher. Now they’re not flying as much but it’s higher in many cases like American for example but they’re not flying as much so I guess it’s a little deceptive. Yes, they are getting a higher average ticket but there are fewer of them so they’re not generating enough operating profits to cover all their costs.”
How have labor implications changed over the last 30 years in the airline industry (both among legacies and smaller carriers? Are they repeating itself as it seems to be a repeat of what happened with Eastern Airlines and Continental which you chaired?
“Yes, there is a cycle. Eastern was very unique in the early days and it’s much more sophisticated now and the unions are much more knowledgable about how to deal with Deregulation. Back in my days though they didn’t understand Deregulation. They never thought it till the very end.”
According to R.E.G Davis’s book “Rebels and Reformers of the Airways”, he wrote, “On August 26th, Continental Airlines received a petition for more than 90% of its working pilots requesting an end to their affiliation with ALPA”. Explain how this happened and if this is has been seen among other carriers today?
“Basically, you know we replaced the pilot workforce. We didn’t do it because we wanted to. We did it because we had to rebuild Continental. When we went on strike and implemented work rules and costs that we could live with.
That’s what created the new Continental. Pilot’s came back. Initially, only 20% came back to work under our new work rules. The rest struck. We couldn’t get them to come back to work so we hiring our own pilots.
We started training and hiring people. We hated to do it as it meant displacing our existing pilots but we did it and we ended up in effect replacing the pilot union because now you had all these new employees and you had ALPA constantly fighting these guys.
Finally, in 1984-1985, you had such a minority of pilots that worked for the company that was ALPA. They voted to throw the union out and I think they had to have a huge percent to do it and they did it. So we were non-union.
That was all the employees. It was not us at all. People say “Oh Lorenzo did it”. We had nothing to do with it. The employees were not about to be represented by this union that basically wanted to get rid of them because they wanted to replace them with the old guys. You know, that wasn’t about to be.”
Have you seen anything like this happen in any other carriers today?
“No. No one has ever replaced a pilot workforce and lived to tell the story. The small guys started out as non-union companies and they try to maintain that as long as they can. They won’t say that publicly but all you have to do is just look at the results.
There have been a few examples of employees getting really dissatisfied with the union and then opting out. The few examples I don’t know what they particularly are but in our case it was different. You had a completely new group of employees which we were forced to do as I explained.”
What is your view of the industry in the next 5-10 years as there are over 90 airlines entering the market today according to the Wall Street Journal (mainly in the West but also in other regions such as Asia, Africa and Latam)?
“Obviously, competition is going to increase. Costs are going to become even more of a factor and a lot of the companies coming in have sort of a unique strategy focusing on a piece here or a piece there whether it be a concentration of flights into a particular airport or a particular type of equipment so they will have a unique strategy.
Obviously, they’re not going to all make it and we’ll see an increase because money is very cheap these days so financing a lot is much easier but the success over time of these companies does get to be a factor of profit and loss and it’s tough. Start-ups are not easy.”
Has the job of an airline CEO controlling all the different variables become easier or harder since deregulation?
“My job today is a lot harder than the job I had. We had a tough job because we were changing the company but the role today of just running these companies is much more complicated. So many more moving parts in my opinion. Brought about by technology which has also aided things.
When I left Continental I did not have a computer on my desk. Just to put it into a perspective for you. We had a lot of computers in our reservations but they were huge computers. Today a couple of laptops would probably take care of most of the capacity of all those computers.
Those old IBM-type computers. I don’t want to overdo that point because the IBM computers were really more in the ’70s and changes were coming in the ’80s already but it has come a long long way since then.”
If you were still in the industry today what would you do differently than what we see among legacy carriers?
“It’s very hard to answer a question like that because I’m not inside of these companies today. I really don’t have all their input and know the real facts and it would be easy to say this or that. Coming out of COVID for example we all had different theories.
One of my theories was companies like United, etc had to be very concerned about the return of business traffic. That’s materialized for sure and it seemed to me that there would be much more of a focus on leisure traffic which has materialized and today I wouldn’t do a Pan Am. I think they really have to focus on their cost structure.
By and large, some companies are more aggressive about expansion. American is a good example. I think you got to be careful. Indeed American had it not been bailed out by the government it would not have made it without Ch11.”
You ultimately are a strategist and cost-cutter which is the center of your success. Is the secret to your success that you take action rather than “Well as you know we addressed them head-on in the 80s, we did not have big hubs in Chicago or Dallas that could give us insulation from the marketplace. We had it front and center in the late 80s but you know the 90s were a very comfortable period when airlines could continue to raise business fares and basically have high business fares and high unrestricted fares subsidizing a long-term unsustainable cost structure” as you said in an interview with CNBC in 2009, Is a long-term cost structure foreseeable for any airline or has the industry not reached that point yet?
“They have got to always change it. It doesn’t change the focus on cost structures.
Too many times they think they can get off on other tangents, expansion into here, expansion into there and really raise their costs and to me, that really is the old Pan Am story.
New entrants, new competition almost always come with lower costs and low fares. That’s the way they enter markets.”
As you addressed it do you think that’s changed in this case?
“It depends. You got to look into it in each individual carrier. Some carriers today are much more focused on their cost structures than others and you have to really look at them on an individual basis. Also, the big guys are in a different position.
Take an airline like Spirit. They are laser-focused on their cost structure. Laser-focused. Indeed they have one of the lowest costs and they’re selling low-costs as an ultra-low-cost carrier.
Let me add to a point that it isn’t just low-fares. They have to focus on keeping an eye on the deal they’re giving the passengers and whats their reason for existence. Spirit ran into problems maybe 10 years ago where they were just known for having such a **** project.
They had a lot of delays. Our children coming down to Florida in the last 5 years, were very reluctant to take Spirit because you didn’t know that you would get there on time. Their operating time completion practice was way off.”
“That is that the U.S Government, Congress has really never changed labor legislation coming out of airline deregulation. The airline industry still lives under the same legislation that was originally passed in the 20s and it clearly has to be updated which would allow airlines and management and unions to get into I think a healthier negotiating environment.” Has it changed or what was the point you were trying to make when saying this to CNBC in 2009?
“No, it’s gotten worse but of course, the really rapid Deregulation is behind us. Congress enjoyed deregulating the revenue side giving low-fares etc to the public but the harder job of allowing these companies to afford the fares they shied away from because that was controversial. They had to change the regulations.
As an example, airline labor law today is governed under a law that first went into effect in 1926. It’s called the Railway Labor Act. It was designed for railroads in order to prevent strikes in unique parts of the country from shutting down the commerce in that area.
When airlines were regulated in 1936 they were put under this act.
They should have been clearly taken out of it as part of Deregulation but you know the unions found it very cozy to be in there and to be regulated by this special regulatory group in Washington that they always controlled because they’re right there in Washington, making their business of knowing what’s going on in Washington so it’s very tough.
It’s called the National Mediation Board and is run by a couple of people and they’re the ones that decide whether you can strike. They’re the ones who killed Eastern basically by not allowing the free market to take its place.
They kept holding us back for 2 years. It has never been done before. They had always released companies to resort to self helped measures.
Anyway Eastern was a very difficult equation. Eastern went on for 2 years where the union could slow down and torment the company and its passengers and keep the companies from resorting to self-helped measures as they’re called.”
Previously you said “ There’s also some unions that are house unions, some unions that are much more sensitive, then there are other unions that are national unions which are concerned about their national position and not as much concerned about the position of the local carrier”. Explain the dynamic of the union in the context of an airline and put the idea of union solely as good to rest.
“Like American. American has a pilot union that is not part of the big national union. They tend to be somewhat more sensitive to the local companies’ issues as opposed to in our case, the National Union was more focused on what was going to happen with United and USAir than what was about the local problems in Houston.
They’re headquartered in Washington. They’re focused on their biggest clients. The big airlines so the little airlines that they organize as you can imagine getting the **** end of the stick.
Well because their comparison is always with the big guys which are what always happened to us.
Even at Continental before the merger, Continental’s costs were always compared with companies 3 times the size which had much stronger hubs, were in a completely different position but they’re sitting in Washington and were the biggest guys. It’s natural.
I tried to get the International Association of Mechanics.
I tried to see the president of the union and explain to him what was happening to Eastern was just killing them. It was just killing the company and sure enough, it killed the company. He said, “I’m sorry there is just nothing I can do. These little guys are independent.”
In that particular union and they’re all organized differently by the way and in that particular union, the local guy was all-powerful. He was the whole deal.”
How do union-free airlines not only give employees who work harder greater merit but also companies greater space for innovation?
“It gives them greater space for innovation. Look at what recently happened where United announced that they wanted to have vaccination of their employees and the unions screamed and said “Wait a minute. That’s a negotiable item. You have got to negotiate with us.
Again it is a perfectly obvious thing. You want to have your employees vaccinated. You don’t want them facing passengers and not be vaccinated unless there’s a real reason for it so that’s just an example.”
Have any other advances been made in terms of union-airline relations?
Sure. Some companies have. Some of the unions have with others.
Frank, thank you so much for speaking to us!
