Q&A with ALPA President Capt. John Prater

Interview by David Jones, Consulting Editor

Editor’s Note: When Capt. John Prater took office as the eighth president of the Air Line Pilots Association in January 2007 after beating incumbent Capt. Duane E. Woerth in a 51-percent to 49-percent vote, he promised a return to “hard-nosed tactics” and strict contract enforcement for the nation’s largest pilot union. He recently agreed to an interview with FLTops.com, during which he discussed the future of airline pilot compensation, pension plans, scope clauses and other hard-hitting issues affecting current and prospective airline pilots. What follows is a portion of that interview.

FLTops.com:  What has been your biggest challenge so far as ALPA President?

Prater:  "I would say the largest challenge has been getting management to understand the issues that we are bringing to them through our eyes. They are looking far too much through the base economics of everything, and they did not heed our concerns that I started talking about in January that pilot staffing levels were far too low at several carriers and that there would be ramifications this summer. I think we’ve seen the results of some of that. So far, it’s led into … I can’t tell you how many pilots are reporting that under these bankruptcy-era contracts and the concessions that we made in the area of work rules is backfiring. The guys are flying too much and they are facing a chronic fatigue situation, and we are all going to be hearing much more about that in the future. We are taking it head-on and it is one of our highest-priority issues. Whether we do it through collective bargaining in our contracts, or whether we do it through review of the FAR and the flight time limit schemes from around the world, it is an issue that’s affecting our members very directly and therefore begins to affect the operation of an airline that is not properly staffed."

FLTops.com:  Pilots obviously have been through a lot the past six years in terms of concessions, furloughs, bump-backs, pension losses and more. What will the next round of airline contracts look like—will they be similar to the United and Delta deals signed just prior to 9/11, or something in between those contracts and the concessionary contracts of today?

Prater:  "I think you’ll see them much closer to our 2000/2001-era contracts for the simple fact of pilot supply and people willing to come into this profession … people willing to spend upwards of $100,000 to become a rated pilot, [including] education and flight expense going the civilian route or coming out of the military and then looking at a job that has a very uncertain future. While all pilots enjoy flying, you also have to feed your family and take care of your future. So I think the supply and demand of pilots—we are seeing pilots leave the profession on both ends. More experienced, longer-in-the-tooth pilots are leaving to take better jobs overseas. There are younger pilots, middle-aged pilots are not returning to the profession; they are out doing another job and they are not returning. You can ask any regional airline and some of the cargo carriers what type of luck they’re having finding pilots. Many of them have lowered their time requirements to become an airline pilot down to basic minimums of commercial, instrument, multiengine ticket. On the collective bargaining side, I think you will see a return to solid, substantial benefits to being an airline pilot. Certainly, the four cornerstones of any pilot contract are wages and benefit, work rules and the scope, which is our job protection issues."

FLTops.com:  Back after 9/11 and the airlines began to change their business model and make comments that substantive, long-term changes to the business model were required in order to survive, there was a lot of discussion about permanent changes to work rules. Are you of the opinion that changes made to the work rules after 9/11 will fail to become permanent?

Prater:  "I believe that wholeheartedly. In the 1970s and into the '80s, contracts evolved. The [historical] norms were anywhere from 75 to 79 hours of flying per month. We now have pilots flying maximum FARs, 100 hours domestic up to 120 hours in 30 days international, and those are unsustainable. We are not pieces of a machine; we're not all cut from the exact same piece of iron. We’re human beings. Some pilots, depending on your age, your physical health, we're all a little bit different. Some can fly the 75 hours and some might be able to fly up to those FAR maximums, but not month-in, month-out, year-in, year-out. I fully expect us [to address this issue] in this round of bargaining; it's not just money and pensions. It will be lifestyle rules. They are founded in safety concerns. It’s legal to fly seven round-trips a month from the East Coast of the United States to the United Kingdom and back, and still fly another and still fly another nine- or 10-hour domestic leg. That’s unsustainable, yet we are seeing that. Our pilots, in droves, are saying, ‘no way; I’m not going to do that. I won't have to worry about age 60 because I won’t ever reach it if I continue with these type of work rules.’ So it’s a very high priority in all of our contracts."

Editor’s Note: Prater added that commuting, which many airline pilots do, exacerbates the problem.

Prater:  "Bases have closed and your family is one place and you’re flying out of another place. Most pilots don’t commute by choice; they commute for a couple of reasons. Either they can’t afford to live within driving distance of one of the hub airports or the airline has changed [domiciles] so many times. This is especially true in the regional industry. We’ve got some carriers that have had 15, 17 different hubs. They move pilots around as they need to. What are you going to do? You can’t move three and four times a year so because of that, the stress of the super-high load factors and the stress of getting to work to make sure we are there on time to fly the next trip, it all adds into it. You start hitting that 18, 19, 20 days a month flying, and maybe being home six to eight days, it’s unsustainable. They’ve actually already done it longer than they should have. The [financial] emergency of 9/11 is over. This union, and the airline pilots we represent, met that emergency both on an operational level and an economic opportunity to support our companies. We are good employees. That’s our foundation, and we want our companies to survive. We made some of the drastic cuts in our contracts to allow these corporate entities to survive. And now, in a word, we’re angry. We see managements take good care of themselves and their families, and they want to talk about a paradigm shift in permanent restructuring of the pilot profession [and] our wages. No way, no how. Those carriers that meet us on the playing field and are ready to address those issues now, I’m convinced, will do much better than those that fight us to save every economic savings that they gathered in bankruptcy. The bankruptcies are over. The 9/11 emergency is over. It’s time to restore the benefits of being a professional airline pilot."

FLTops.com:  Do you believe the defined benefit pension plans will continue to exist as a significant part of most pilots’ benefit package? Will we see a shift toward more defined contribution plans or some type of hybrid plan that could mitigate pilots’ risks in terms of pension terminations?

Prater:  "In the past, we’ve used a combination at most properties, but some were heavily vested with a defined benefit plan. There has been the attempt over time to diversify between the combination of two plans. We believe that pilots, at the end of a 25- to 30-year career, should be somewhat north of a 60% final average earnings. Each property is different, and depending on how long you’ve worked for that carrier. At a couple of our carriers that did not go through bankruptcy, the defined benefit plans are alive and well. They are alive and well at several carriers for all employees except the pilots. We took the hit whether it was freezing or terminating under the PBGC [Pension Benefit Guaranty Corp.] to remove the financial pressure on those individual companies. That was a result of the perfect storm that interest rates were going down and return on the investments in a defined benefit plan wasn’t keeping up with the assumption rates used in the plan. The fact that pilots were increasing in age, beginning to retire, and the fact that the government rule is that a plan was funded and met a certain level of funding, during the good, profitable times, the companies couldn’t put more money into it. We know that a foundation of a good savings plan is that you fund it when the stock market is going up as much as you fund it when the stock market is going down. The DB plans, with the rule that the companies that had a solidly funded plan couldn’t put more into it during good times led to when the bad times, they were severely underfunded.

"Each pilot group is a little different, and there will not be one size fits all but at this point, the mentality of a large number of our members is get your money out of the company each and every month, get it into your hands into an investment vehicle that you control as an individual to provide for your future. That is why you are seeing a heavier emphasis on defined contribution plans. Is that necessarily the answer for the future? No. I think we’ll see a continued evolution, new vehicles, new instruments, maybe even new laws that govern allowing people to better prepare through company plans and individual plans for their future."

FLTops.com:  Do you believe that airlines made enough changes to the business model since 9/11 to succeed and to avoid the cyclical nature that has existed in the past? Is there a model for the global carriers that avoids that hire-and-fire, contract-concessions cycle that has plagued many of the airlines?

Prater:  "I don’t see the cyclical nature of the industry going away. It is one of the leading indicators of economic movement. The airline industry tends to be ahead of a general downturn or upturn in the economy, whether it’s for leisure travel or business travel. I believe the airlines have fought so much on price that they’ve just about created situations where you can’t make money even when you’re filling airplanes up completely. I think you’ll see more emphasis on pricing stability in the future but they have to live within the antitrust laws as well. The models that seem to work are certainly those that have found other ways of running a more efficient operation not solely on the backs of labor. Southwest [Airlines] is a success story but they don’t count on cheap help. They count on the help that provides a consistent service, they pay steadily well. They base it upon the one-airplane model and that has some huge inherent efficiencies that have been a part of their success story. But youcan’t fly everywhere on Southwest. The legacy carriers have taken a little bit of that page. Some carriers have re-equipped early, going with the fuel efficiency of the newer airplanes, some going along the one manufacturer looking for efficiencies. Others have gone done the path of sticking with old airplanes that are paid for. That can be a successful model, but you are going to have increased fuel costs with that model. Which model is going to work? I believe that those managements that stick with the strategy of making sure their employees are in the game with them, not under the whip, but out there doing the job because we want to do it, will do much better in the long run. This is still a service industry, with safety first. You can’t continue to treat people like cattle and expect them to come back."

FLTops.com:  Does ALPA regret agreeing to scope clauses allowing feeder airlines with pilots on separate lists and separate contracts?

Prater:  "I think regret is too strong of a word. We had to evolve with the industry. A scope clause is trying to protect the work for the pilot group that you represent. There were concessions made by some of the legacy airlines to allow certain types of flying to be done by another company. It would be a much simpler world if all flying done for XYZ Co. were done by the pilots on the seniority list of XYZ Co. Deregulation changed the world. In the mid- to late 1980s, the hub-and-spoke carriers bought up the competition and basically took the national carriers—the Ozarks, the Frontiers, the Hughes Airwests and put them inside their carrier. The government allowed that round of consolidation, and it allowed to more of the fortress hub mentality. At the same time, they started to get rid of the 48-seat turboprops. Then the industry recognized they needed that type of flying. There were markets into those hubs that could not be served [profitably] by a 737 or a 120-seat airplane. We then saw the evolution of the regional jets. In scope negotiations, some of the concessions made were that we allowed you to do that flying for our carrier and you can use those pilots and companies and set those limits on seating capacity. Has it created issues? Certainly it has. We try to meet it face-on. The industry continues to evolve. There are legacy carriers that buy completely or partially some of their feeder carriers, then turn around and spin them off."

FLTops.com:  Will ALPA ever convince American Airlines’ pilots to merge with ALPA? How big a priority is that among ALPA’s strategic priorities?

Prater:  "I believe that airline pilots would be better served both individually, collectively and for the future of our profession by all of us being in one union. I won’t put a name on that union. Since I’ve been in office we’ve held several meetings with the leaders and activists from all of the independent unions in the United States and Canada. We’ll continue down that path looking for common solutions. Would I like the American pilots to be a part of ALPA. No, I would like all of us to be a part of a union that can do a better job of protecting and defending our profession, and enhancing it for future generations of airline pilots. I am open to any and all suggestions on how we can get to that point. I do believe we can do better if we were all in one union versus being out there, at times, working against each other on any issue. I would rather find the solution, the common ground and then go forward. We will actually continue that this fall with a major effort on flight time, duty time and pilot fatigue because that’s something that cuts across all union lines."