If you're a frequent reader of this site, you know I love the analysis at Unbossed, this morning is no different:

That discussion includes the amount of savings on just ticket prices from airline deregulation. One study found it was $32 per ticket.

Weigh that against the impact / costs of deregulation, and the tradeoff is a poor one. We have seen an increase in fines for violating OSHA requirementsfor years - and that has been under the Bush OSHA!

We have also seen airline employee pensions gutted.

Thank goodness the airline employees are highly unionized. Their unions have been all that has stood between complete pauperization of the workers . . . leading to an egress of good workers and an influx of workers who could not find better jobs.

BTW, that emphasis was all from Shirah, I didn't add it. I highly recommend you head over and read up on deregulation. She's pulling together a 4 part series that takes a look back at a 2005 series that was up on Unbossed about Airline de-regulation.

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This time, it's due to the European Union, as Alitalia was erquired to be privitized. But don't you LOVE how the AP spins this one?:

Barring a valid offer, Alitalia's extraordinary administrator, appointed after the airline declared bankruptcy Aug. 29, said Alitalia's clock would stop ticking Oct. 1. Italian civil aviation authorities have indicated it might be even sooner.

"I would say that we have until the end of the week," administrator Augusto Fantozzi told reporters in Rome on Monday. "Probably we will have time until next Tuesday, which means in effect that, as of today, Sept. 30th is the last day possible" of operation.

He acknowledged that the airline's chances for survival looked bleak.

"There are no prospects for a rescue in a reasonable time," Fantozzi told reporters.

The government has already made clear that the offer by the group of Italian investors led by scooter-maker Piaggio chairman Roberto Colaninno was the last best chance for Alitalia's survival.

The group had pledged to inject $1.4 billion into the bankrupt airline, sell off unprofitable assets and merge the rest with Italy's No. 2 carrier Air One. But the deal — like the offer by Air France-KLM last spring — was withdrawn amid union objections.

What union objections? What unions? European Union? Was it an employee union? Instead, we get this line, blaming the bankruptcy on union objections. Morons.

Reuters had more:

Facing the prospect of liquidating a symbol of national pride, sacking its 19,000 workers and seeing its slots go to foreign airlines, Berlusconi pinned the blame for the airline's predicament squarely on the pilots and flight attendants.

"Soon the pilots and flight attendants will realize there's no alternative," he said. "I think the Italian people will be able to judge who is to blame if we don't find the solution immediately that I am still hoping for."

Berlusconi is blaming the workers and their union for the failed attempt by the Italian investors to rescue the airline, but still no info on what the objections were to the deal, only that Berlusconi blames the pilots and flight attendants. Does that mean he doesn't blame the ramp agents, mechanics and other unionized Alitalia employees?

BBC noted last month that the airline deal for an Italian investor would work only if the airline were split up and the union agreed to toss their membership into the wind and accept massive job cuts. The BBC went on to also say that:

Prime Minister Silvio Berlusconi has made Alitalia's continued ownership by Italian interests a precondition of any rescue deal.

However, experts have said the airline - of which the government owns 49% - can only survive in the future as part of some European alliance.

The condition of the sale that Berlusconi set, Italian ownership, is what sinks this deal, not the union. With the government owning 49% and demanding Italian ownersip, it's impossible for the big airlines like Lufthansa or Air France to purchase the airline, they are not Italian. These other airlines have expressed interest in a split up version, but that would mean that Berlusconi would have to give up his Italian only ownership demand and instead, think about the employees of Alitalia instead.

You know, if I'd just stopped and read that AP article, I probably would be thinking right now that unions are bad and I'd be confused, assuming that even the European Union is bad. Good thing I hunted around for more information and discovered that the intransigence of Berlusconi is really adding fuel to the fire of Alitalia. I hope he doesn't escape responsibility for this shit.

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I hate flying because I’m a geek. Yep, it’s true, geeky to the core. I’m so geeky, my kid makes fun of me by asking me obscure questions about history, politics and math just to show I know way more than a 14 year old. Okay, then she also throws in questions about the current chart toppers or what movie opened on Friday, which I never get right, ever.

So, the geek in me is so excited and will likely look to fly American in the coming year just because of this news:

American, which has equipped all 15 of its Boeing 767-200 planes for Internet access, plans a broader test of the service within a few weeks, the Star-Telegram said.
The airline says it will charge passengers $12.95 to use Gogo on flights lasting longer than three hours and $9.95 for shorter trips.

Wifi while flying? Way to go American. And here, you thought I only had mean things to say about you and your labor practices. Well, I’m here to say that when you do something right for the Geek in me, I’ll totally share!!

So, way to Go American Airlines!! Thanks UPI for breaking the story!!

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Continental cuts workforce and more due to fuel costs

DALLAS -- Continental Airlines said Thursday it is cutting 3,000 jobs and reducing capacity by 11 percent, citing record fuel costs that have pushed the industry into its worst crisis since 2001. It also said its two top executives will forgo pay for the rest of the year.

The job cuts represent about 6.5 percent of the company's work force of 45,000.

However, Continental seems to have a conscience:

The company also said Chairman and Chief Executive Lawrence Kellner and President Jeff Smisek will not take salaries or incentive pay for the rest of the year.

Did you catch that, from September until the end of the year, Kellner and Smisek will forego pay. And how much is that exactly? The Post claims:

Last year, Kellner got a salary of $712,500 and total compensation that the company valued at nearly $6 million, down 9.3 percent from the year before, according to an Associated Press analysis of a company filing with the Securities and Exchange Commission.

However, about one-third of Kellner's compensation was in stock and option grants that are now worth far less than they were when granted in February 2007 because of the slump in the company's stock. In a filing Wednesday, the company said 2008 salaries would be $296,875 for Kellner and $240,000 for Smisek.

So this salary issue made me start thinking about Dick E Dauch at American Axle and his entitlement mentality. Not long back, over at Freep (Detroit Free Press), there were all these anti-union folks pointing out that Dauch’s more than $10 mill was fair compensation for him starting the company and making it profitable. That even if they weren’t profitable (they were last year at over $37 mill profits), he still deserved a high salary of over $1mill. I wonder how many of these same people are cheering Kellner’s and Smisek’s decisions to forego pay during the current fuel crisis.

But before anyone gets their panties in to a bunch and quotes me anything about how Americans get paid too much and CEO’s earn their keep or that labor is a commodity and blather on about the market, let me point out this gem from the Post:

The company said that several fare increases have not been enough to offset the rising cost of fuel. Continental estimates it will spend $2.3 billion more this year than last _ a difference of $50,000 per employee. Fuel has surpassed labor as Continental's biggest expense.

My dad’s shop is having a similar problem. The cost of running the presses and hammers is high and he’s trying to get the company to add a fuel surcharge to orders but he hasn’t been successful at this yet. Since my dad gets a profit sharing incentive through work as his bonus, it’s important to him that the company make money and he’s sitting back and watching as his 1 to 2% bonus becomes fuel for running a hammer for a couple of days. Kind of sucks, doesn’t it?

I’m hopeful that Continental will be able to work things out without layoffs, perhaps through buyouts or retirement or attrition, because I really don’t want to see anyone have to figure out how to make it in this economy without a job and no prospect for new employment.

BTW, my dad’s shop is hiring. They’d rather hire seasoned journeymen level press operators, tool and die makers and machinists. So, if you’d like to move to Ohio, East of Cleveland, drop me a line and I’ll send your info to my dad. Ohio’s a great place to grow up, I just wish I were able to suggest something for the Continental employees.

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