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Chairman, Committee on Commerce, Science, and Transportation, U.S. 
Senate:

United States General Accounting Office:

GAO:

June 2003:

Airline Labor Relations:

Information on Trends and Impact of Labor Actions:

GAO-03-652:

GAO Highlights:

Highlights of GAO-03-652, a report to the Chairman, Committee on 
Commerce, Science, and Transportation, U.S. Senate 

Why GAO Did This Study:

Labor negotiations in the airline industry fall under the Railway 
Labor Act. Under this act, airline labor contracts do not expire, but 
instead, become amendable. To help labor and management reach 
agreement before a strike occurs, the act also provides a process—
including possible intervention by the President—that is designed to 
reduce the incidence of strikes. Despite these provisions, 
negotiations between airlines and their unions have sometimes been 
contentious, and strikes have occurred.

Because air transportation is such a vital link in the nation’s 
economic infrastructure, a strike at a major U.S. airline may exert a 
significant economic impact on affected communities. Additionally, if 
an airline’s labor and management were to engage in contentious and 
prolonged negotiations, the airline’s operations—and customer service—
could suffer. 

GAO was asked to examine trends in airline labor negotiations in the 
25 years since the industry was deregulated in 1978, the impact of 
airline strikes on communities, and the impact of lengthy contract 
negotiations and nonstrike work actions (such as “sickouts”) on 
passengers.

What GAO Found:

Since the airline industry was deregulated in 1978, the average length 
of negotiations has increased, strikes have declined, and nonstrike 
work actions (e.g., sickouts) have increased. After 1990, the median 
length of time needed for labor and management at U.S. major airlines 
to reach agreement on contracts increased from 9 to 15 months. Of the 
16 strikes that occurred at those airlines since 1978, 12 occurred 
prior to 1990, and 4 occurred subsequently. All ten court-recognized, 
nonstrike work actions and all six presidential interventions occurred 
since 1993.

Summary of Negotiation Trends Since Deregulation

[See PDF for image]

[End of figure] 

Airline strikes have had obvious negative impacts on communities, 
including lost income for striking and laid off workers, disrupted 
travel plans, and decreased spending by travelers and the struck 
airline. However, such impacts have yet to be thoroughly and 
systematically analyzed. The potential net impacts of a strike on a 
community would depend on a number of factors, such as availability of 
service from competing (nonstriking) airlines and the length of the 
strike. For example, of two recent strikes, one lasted 15 days and one 
lasted 24 minutes.

GAO’s analysis indicates that passenger service has been affected more 
adversely by nonstrike work actions than by an increase in the length 
of negotiations. Generally, but not always, as negotiation periods 
increased, there has been a slight decline in on-time flights. 
However, the impact of these negotiations has been unclear because the 
decline may also have been affected by other factors such as poor 
weather. By comparison, the 10 court-recognized, nonstrike work 
actions more clearly resulted in negative impacts on passengers, as 
shown through such measures as a decrease in the number of on-time 
flights, an increase in the number of flight problem complaints, and a 
decrease in passenger traffic.

www.gao.gov/cgi-bin/getrpt?GAO-03-652.

To view the full product, including the scope and methodology, click 
on the link above. For more information, contact JayEtta Z. Hecker at 
(202) 512-2834 or HeckerJ@gao.gov.

[End of section]

Contents:

Letter:

Results in Brief:

Background:

Length of Negotiations and Number of Nonstrike Work Actions Have 
Increased, While Number of Strikes Has Declined:

Airline Strikes Adversely Affect Communities, but Impacts Have Not Been 
Fully Analyzed and Vary from Place to Place:

Nonstrike Work Actions Have Greater Impacts on Passengers than Lengthy 
Negotiations:

Agency Comments:

Appendix I: Additional Questions:

Appendix II: Objectives, Scope, and Methodology:

Appendix III: Additional Background Information on the Railway Labor 
Act:

Key Provisions of the RLA:

Collective Bargaining Process under the RLA:

Appendix IV: Contracts Negotiated and Ratified or Settled by the 
Amendable Date:

Appendix V: Airline Strikes That Have Occurred Since Deregulation:

Appendix VI: Court-recognized, Nonstrike Work Actions Since 
Deregulation:

Appendix VII: Number of Presidential Interventions Since Deregulation:

Appendix VIII: Comments from the National Mediation Board:

Appendix IX: GAO Contacts and Staff Acknowledgments:

GAO Contacts:

Staff Acknowledgments:

Tables:

Table 1: Unions Representing Selected Crafts or Classes at Major 
Passenger Airlines as of February 1, 2003:

Table 2: States That Include Binding Arbitration or Last, Best Offer 
Arbitration as a Dispute Resolution Option:

Table 3: Congressional Interventions in Railroad Negotiations:

Figures:

Figure 1: Summary of Negotiation Trends Since Deregulation:

Figure 2: Collective Bargaining Process under the Railway Labor Act:

Figure 3: Length of Time Taken to Negotiate Contracts, 1978 to 2002:

Figure 4: Median Negotiation Lengths by Carrier:

Figure 5: Frequency of Strikes, Presidential Interventions, and Court-
recognized, Nonstrike Work Actions by Year:

Figure 6: 2001 Market Shares for Major Airlines at Their Hubs:

Figure 7: Spoke Communities Served from Cincinnati and Minneapolis-St. 
Paul Retain Service from Competing Airlines:

Figure 8: On-Time Flight Statistics for American and Delta at Dallas/
Fort Worth International Airport, August 1998 to December 1999:

Figure 9: Flight Problem Complaints for American and Delta from August 
1998 to December 1999:

Figure 10: Passengers Carried on American and Delta at Dallas/Fort 
Worth International Airport, February 1998 and 1999:

Figure 11: On-Time Flight Statistics for Delta and Continental at 
Atlanta Hartsfield International Airport, August 2000 to August 2001:

Figure 12: Flight Problem Complaints for Delta and Continental, August 
2000 to August 2001:

Figure 13: Change in Passenger Traffic on Delta and Continental at 
Atlanta Hartsfield International Airport in December 1999 and 1 Year 
Later during the Nonstrike Work Action in December 2000:

Abbreviations:

AFA: Association of Flight Attendants:
 
AIRCon: Airline Industrial Relations Conference:
 
ALPA: Air Line Pilots Association:
 
AMFA: Aircraft Mechanics Fraternal Association:
 
APA: Allied Pilots Association:

ATA: Air Transport Association:
 
CAPA: Coalition of Airline Pilots Associations:

CESTA: Communities for Economic Strength Through Aviation: 

CWA: Communications Workers of America: 

DOT: Department of Transportation: 

IAM: International Association of Machinists and Aerospace Workers: 

IBT: International Brotherhood of Teamsters: 

NMB: National Mediation Board: 

PAFCA: Professional Airline Flight Control Association: 

PEB: Presidential Emergency Board:
 
RLA: Railway Labor Act: 

SAEA: Southwest Airlines Employee Association: 

SWAPA: Southwest Airlines Pilots Association: 

TWA: Trans World Airlines: 

TWU: Transport Workers Unions: 

UFA: Union of Flight Attendants:

United States General Accounting Office:

Washington, DC 20548:

June 13, 2003:

The Honorable John McCain 
Chairman, 
Committee on Commerce, Science, and Transportation 
United States Senate:

Dear Senator McCain:

Observers of the interactions between airline management and labor have 
long characterized these labor relations as contentious and 
adversarial. Negotiations between unions and airlines, for example, 
have taken up to 4 years to complete. Unions and airlines have each 
prolonged negotiations for their financial benefit. The importance of 
labor relations has recently been magnified by the financial crisis 
facing many airlines. Since September 11, 2001, US Airways, United 
Airlines, and Hawaiian Airlines have entered Chapter 11 bankruptcy, and 
American Airlines is fighting to avoid bankruptcy. US Airways, United, 
and American have all had to obtain the consent of their unions for 
contract concessions to substantially cut labor costs. At stake, 
according to industry observers and financial officials, has been the 
continued existence of at least two airlines.

The process under which labor negotiations in the airline industry take 
place is substantially different than the process of most other 
industries. Airline labor contracts do not expire, and their 
negotiations can include a series of steps--including mediation, 
arbitration, and presidential interventions--specifically designed to 
avoid an impasse that would interrupt the flow of essential commerce. 
Since 1936, airline labor negotiations have been conducted in 
accordance with the requirements of the Railway Labor Act, which 
contains an established framework to reduce the incidence of strikes. 
Although the act is designed to bring about settlements without unions 
resorting to a strike, negotiations between the airlines and their 
unions have sometimes been contentious, and strikes have occurred. 
Recently, negotiations have at times been marked by nonstrike work 
actions, such as sickouts and work slowdowns. These actions are 
designed to place economic pressure on an airline.

Because of ongoing concerns about the scope and impact of airline labor 
negotiations, you asked us to examine a number of issues concerning 
airline negotiations, strikes, and nonstrike work actions. As agreed 
with your staff, we examined the following three questions:

* What have been the major trends of labor negotiations in the airline 
industry since the industry was deregulated in 1978, including the 
number and length of negotiations and the number of strikes, 
presidential interventions to avoid or end strikes, and nonstrike work 
actions?

* What has been the impact of airline strikes on communities?

* What have been the impacts of the length of negotiations and the 
occurrence of nonstrike work actions on passengers?

In addition to these questions, you also requested information on 
states using binding and last offer arbitration[Footnote 1] for 
essential employees and the number of times Congress has intervened in 
railroad labor negotiations in the last 25 years. See appendix I for 
data on states using binding arbitration and congressional 
interventions in railroad negotiations.

To determine the trends of labor negotiations, we analyzed data on 
negotiations, strikes, and nonstrike work actions from airlines, labor 
unions, the National Mediation Board (NMB), industry groups, and 
academic experts. We also interviewed officials with major U.S. 
airlines, labor unions, the NMB, industry groups, and academic experts. 
To determine the impact of strikes on communities, we reviewed 
available published studies from academics and other experts, and we 
analyzed data on airline schedules. To determine the impact of 
nonstrike work actions, we defined such actions as those in which 
airlines obtained either temporary restraining orders or injunctions 
against unions to prevent various actions. We then analyzed data from 
the U.S. Department of Transportation (DOT) on airline operational 
performance and passenger service. Except where noted, all data 
collected were current as of December 2002. Because of various data 
limitations, our analyses are restricted to major U.S. passenger 
airlines.[Footnote 2] We did not evaluate the efficacy or effectiveness 
of the Railway Labor Act or the impact of any possible changes to the 
act. Appendix II contains a more complete description of our scope and 
methodology.

Results in Brief:

Since the airline industry was deregulated in 1978, labor negotiations 
have taken increasing amounts of time and have been marked less by 
strikes and more by nonstrike work actions. For the contracts we 
reviewed that had been negotiated between major carriers and labor 
unions since deregulation, the overall median length for contracts 
negotiated between 1978 and 1989 was 9 months, while the median 
negotiation time from 1990 to 2002 increased to 15 months. (See fig. 
1.) However, some carriers such as Continental Airlines, Southwest 
Airlines, Alaska Airlines, and United Airlines have been more 
successful than others at reaching agreement with their labor unions in 
much less time. Of the 16 strikes that occurred, 12 took place from 
1978 to 1989, and 4 took place since 1990. Various presidential 
interventions that have prevented or halted 6 strikes have all occurred 
since 1990, and all 10 court-recognized, nonstrike work actions have 
also taken place since 1990. Although the complete number of nonstrike 
work actions is not known because they are difficult to document, our 
evidence suggests that their use has increased in the past 12 years.

Figure 1: Summary of Negotiation Trends Since Deregulation:

[See PDF for image]

[End of figure]

While strikes cause obvious negative impacts on affected communities, 
we could identify no published studies that comprehensively analyzed 
the full impacts of a past strike. Negative impacts of strikes include 
the lost income of striking and laid off workers, disrupted travel 
plans due to cancelled flights, decreased spending by the struck 
airline, and less spending by travelers. However, the overall economic 
impact of any past strike, including direct and indirect effects (and 
the offsetting effect of various mitigating factors such as the 
presence of service from competing airlines) has not been quantified. 
Our analysis of past strikes and other information indicates, however, 
that a strike's potential impacts could vary greatly from community to 
community. For example, a community with substantial amounts of service 
provided by competing airlines is less likely to be affected than a 
community that is heavily or entirely dependent on the service provided 
by the striking airline, because passengers have continued access to 
air service. As a result, a thorough assessment of a strike's impact on 
one community would be difficult to generalize to other locations.

Our analysis indicates that passenger service has been affected more 
adversely by nonstrike work actions than by an increase in the length 
of negotiations. Generally, but not always, as negotiation periods 
increased, there has been a decline in on-time flights.[Footnote 3] 
However, the impact of these negotiations has been unclear, because the 
decline may also have been affected by other factors such as poor 
weather, aircraft maintenance, runway closures, air traffic control 
system decisions, or equipment failures. By comparison, the 10 court-
recognized, nonstrike work actions more clearly resulted in negative 
impacts on passengers, as shown through such measures as a decrease in 
the number of on-time flights, an increase in the number of flight 
problem complaints, and a decrease in passenger traffic. For example, 
during an American pilot slowdown in 1999, the percentage of flights 
that arrived or departed on time declined by 11.6 percentage points. 
Also, customer flight complaints with DOT about American nearly 
quadrupled during the period of the nonstrike work action, rising from 
53 to 203 complaints, while passenger traffic fell by 15 percent as 
compared to the year before.

Background:

All the major airlines have some union representation of at least part 
of their labor force. The various crafts or classes[Footnote 4] that 
unions typically represent include pilots, flight attendants, 
mechanics, and dispatchers. Sometimes unions also represent customer 
service agents and clerical workers, aircraft and baggage handling 
personnel, and flight instructors. The extent of unionization among the 
major carriers varies significantly. At Delta, unions represent the 
pilots and two small employee groups; at Southwest, on the other hand, 
unions represent 10 different employee groups. Different unions may 
represent a given employee craft or class at different airlines. For 
example, the Air Line Pilots Association (ALPA) represents pilots at 
United, but the Allied Pilots Association represents American pilots. 
Table 1 summarizes the representation of different crafts or classes at 
the major airlines.

Table 1: Unions Representing Selected Crafts or Classes at Major 
Passenger Airlines as of February 1, 2003:

Airline: Alaska; Pilots: ALPA; Flight attendants: AFA; Mechanics 
and related: AMFA; Dispatchers: TWU; Fleet service/ramp: IAM.

Airline: America West; Pilots: ALPA; Flight attendants: AFA; 
Mechanics and related: IBT; Dispatchers: TWU; Fleet service/ramp: TWU.

Airline: American; Pilots: APA; Flight attendants: APFA; Mechanics 
and related: TWU; Dispatchers: TWU; Fleet service/ramp: TWU.

Airline: Continental; Pilots: ALPA; Flight attendants: IAM; 
Mechanics and related: IBT; Dispatchers: TWU; Fleet service/ramp: 
(none).

Airline: Delta; Pilots: ALPA; Flight attendants: (none); Mechanics 
and related: (none); Dispatchers: PAFCA; Fleet service/ramp: (none).

Airline: Northwest; Pilots: ALPA; Flight attendants: IBT; Mechanics 
and related: AMFA; Dispatchers: TWU; Fleet service/ramp: IAM.

Airline: Southwest; Pilots: SWAPA; Flight attendants: TWU; 
Mechanics and related: AMFA; Dispatchers: SAEA; Fleet service/ramp: 
TWU.

Airline: United; Pilots: ALPA; Flight attendants: AFA; Mechanics 
and related: IAM; Dispatchers: PAFCA; Fleet service/ramp: IAM.

Airline: US Airways; Pilots: ALPA; Flight attendants: AFA; 
Mechanics and related: IAM; Dispatchers: TWU; Fleet service/ramp: IAM.

Legend:

AFA = Association of Flight Attendants:

ALPA = Air Line Pilots Association:

AMFA = Aircraft Mechanics Fraternal Association:

APA = Allied Pilots Association:

APFA = Association of Professional Flight Attendants:

IAM = International Association of Machinists and Aerospace Workers:

IBT = International Brotherhood of Teamsters:

PAFCA = Professional Airline Flight Control Association:

SAEA = Southwest Airlines Employee Association:

SWAPA = Southwest Airlines Pilot Association:

TWU = Transport Workers Unions:

Source: International Association of Machinists and Aerospace Workers.

Note: American completed its purchase of Trans World Airlines (TWA) in 
April 2001, and this table lists union representation as of February 1, 
2003; hence TWA is not included in this table.

[End of table]

In general, airline labor contracts include three major elements: 
wages, benefits, and work rules. Work rules generally refer to those 
sections of a contract that define issues such as hours to be worked 
and what work is to be done by what employees.

Negotiations between airlines and their labor unions on these contracts 
are conducted in accordance with the requirements of the Railway Labor 
Act (RLA). This act was passed in 1926 after the railroads and their 
unions agreed to set in place a legal framework that would avoid 
disruptions in rail service. The act was amended in 1936, after 
discussions with airline labor and management, to include the airline 
industry and its labor unions. See appendix III for a summary of the 
history and key provisions of the RLA.

Airline labor contracts do not expire; rather, they reach an amendable 
date--the first day that the parties can be required to negotiate the 
terms of a new contract. Labor negotiations may begin before or after 
the amendable date, however. While a new contract is being negotiated, 
the terms of the existing contract remain in effect.

Under the RLA, labor negotiations undergo a specific process that must 
be followed before a union can engage in any kind of work action, 
including a strike, or before a carrier can change work rules, wages, 
and benefits.[Footnote 5] After exchanging proposed changes to contract 
provisions, the airline and the union engage in direct bargaining. If 
they cannot come to an agreement, the parties must request mediation 
assistance from the NMB. By statute, if the NMB receives a properly 
completed application for mediation, it must make its best effort to 
mediate an amicable settlement. If negotiations are deadlocked after 
mediation, the NMB must then offer arbitration to both parties. If 
either party declines arbitration, the NMB releases the parties into a 
30-day cooling-off period. While this process is set by law, the 
decision about when the negotiations are deadlocked is left to the NMB. 
If the NMB concludes that a labor dispute threatens to interrupt 
essential transportation service to any part of the country, the act 
directs the NMB to notify the President of this possibility. The 
President then can, at his discretion, convene a Presidential Emergency 
Board (PEB), which issues a nonbinding, fact-finding report.[Footnote 
6] If the President does not call a PEB, after the 30-day cooling-off 
period ends the union is allowed to strike, and the airline is allowed 
to alter working conditions unilaterally. These actions are known as 
self-help. If the President does convene a PEB, it is given 30 days to 
hold hearings and recommend contract terms for a settlement to the 
parties. The union and the airline then have an additional 30-day 
cooling-off period, after the PEB makes its recommendations to the 
President, before either can engage in self-help. After a PEB, Congress 
may also intervene in the contract dispute by legislating terms of a 
contract between a carrier and a union. Congress, however, has never 
intervened in airline negotiations since deregulation. Figure 2 
summarizes the key steps in the negotiation process under the RLA.

Figure 2: Collective Bargaining Process under the Railway Labor Act:

[See PDF for image]

[End of figure]

Besides negotiations on contracts that are nearing or have passed the 
amendable dates, airline management and labor may also engage in other 
negotiations. For example, if an airline introduces a new type of 
aircraft into its fleet, management and labor will negotiate "side 
agreements" to the contract that set pay rates and work rules governing 
the operation of that aircraft. An example of this situation was when 
Delta and its pilots settled on pay rates for flying Delta's newly 
introduced Boeing 777s in 1999. This agreement was an amendment to a 
contract that was ratified in 1996. Conversely, during financially 
difficult times, an airline's management and labor may negotiate 
concessionary agreements before contracts reach the amendable date. For 
example, since 2001, several airlines have requested pay cuts from 
their unions due to the precarious financial condition of the airlines. 
In April 2003, American employees agreed to $1.8 billion in wage, 
benefit, and work rules concessions to help the airline avoid 
bankruptcy. In April, United employees represented by ALPA, Association 
of Flight Attendants (AFA), the International Association of Machinists 
and Aerospace Workers (IAM), the Transport Workers Union (TWU), and the 
Professional Airline Flight Control Association (PAFCA) agreed to $2.2 
billion in average yearly savings to avoid liquidation or having all 
labor contracts abrogated by the bankruptcy court. Through January 
2003, US Airways employees, including unionized, nonunionized, and 
management personnel, agreed to over $1 billion in cuts to avoid 
liquidation.

Length of Negotiations and Number of Nonstrike Work Actions Have 
Increased, While Number of Strikes Has Declined:

In the 25 years since deregulation, airline contract negotiation 
lengths have increased while the frequency of strikes has declined, but 
the number of nonstrike work actions have increased. For the 236 
contracts that the major passenger airlines negotiated since 1978, 
available data suggest that the median time taken to negotiate 
contracts has risen substantially since 1990, although this varies 
among the different carriers. In addition, 75 percent of strikes 
occurred prior to 1990. By comparison, all presidential interventions 
and all identified nonstrike work actions (such as sickouts or refusals 
to work overtime) occurred after 1990.

Airline Contract Negotiation Lengths Have Increased Since 1978:

The length of time to negotiate airline contracts has increased since 
deregulation. From 1978 to 1989, the median contract negotiation was 9 
months while the median negotiation length from 1990 to 2002 increased 
to 15 months.[Footnote 7] In other words, from 1978 to 1989, half of 
the contracts were negotiated in more than 9 months while from 1990 to 
2002, half of the contracts took more than 15 months to reach an 
agreement. However, in 1978-1989, 6 contracts were ratified or settled 
by the amendable date where as from 1990-2002, 9 contracts were 
ratified or settled by the amendable date.[Footnote 8] (In all, during 
the two time periods from 1978-1989 and 1990-2002, the number of 
negotiations that began before the amendable date were 65 and 51, 
respectively.) Conversely, the number of contracts that required more 
than 24 months to negotiate more than doubled between the two periods. 
Figure 3 summarizes changes in the length of time taken for airline 
labor negotiations from 1978 to 2002.[Footnote 9]

Figure 3: Length of Time Taken to Negotiate Contracts, 1978 to 2002:

[See PDF for image]

[End of figure]

Carriers differed in the degree to which their median negotiation 
lengths increased--if they increased at all. Negotiation lengths 
increased at six carriers that were measured, in some cases more than 
doubling. On the other hand, negotiation lengths decreased or remained 
constant at three: Continental, United, and Trans World Airlines (TWA). 
Figure 4 shows the change in median negotiation lengths at the major 
U.S. passenger airlines before and after 1990.

Figure 4: Median Negotiation Lengths by Carrier:

[See PDF for image]

Note: America West Airlines was excluded from the measurement because 
negotiations for this airline were not listed prior to 1990.

[A] Continental had only one contract pre-1990 that had both a known 
negotiation start date and ratification/settlement date.

[End of figure]

Contract complexity may play a role in lengthening negotiations. In the 
1980s, for example, scope clauses (provisions in labor contracts of the 
major airlines and their unions that limit the number of routes that 
can be transferred to smaller, regional jets) could be very short--
sometimes only one paragraph. Now, however, such scope clauses can be 
60 or more pages. Also, contracts negotiated during the 1980s tended to 
consist mainly of wages and benefits, while those negotiated in the 
1990s included corporate governance issues such as code 
sharing,[Footnote 10] regionals,[Footnote 11] and furloughs.

Another factor in the length of negotiations is the relationship 
between labor and management. According to industry experts who 
examined labor relations in the industry, the quality of labor 
relationships is defined by the parties' level of trust, their level of 
communication, and their ability to problem solve.[Footnote 12] Those 
carriers that industry officials and labor-management experts[Footnote 
13] regard as having positive labor relations tended to have shorter 
negotiation periods than carriers with acrimonious relationships. 
Industry officials noted increased tension within labor-management 
relationships during the 1990s, when the industry recovered from 
economic hardship to enjoy the biggest boom in its history. An industry 
official explained that during the recessionary economic period of the 
early 1990s, unions tended to stall negotiations to avoid making 
concessions. Conversely, during the peak economic period in the mid to 
late 1990s, some airlines' management tried to further improve their 
profits by prolonging negotiations.

Carriers described by industry officials and labor-management experts 
as having had positive labor relationships include Continental 
(following 1993) and Southwest. In the 1990s, their median negotiation 
periods were 7 and 13 months, respectively. Labor-management experts 
credit Continental's current CEO for creating relationships of trust, 
and re-establishing Continental as a profitable carrier after its 
bankruptcy in the early 1990s. Industry officials also credit 
Southwest's labor relationships to 30 years of profitability while 
maintaining its original leadership. Both companies have been 
recognized for extended periods of low conflict in labor negotiations, 
underpinned by high-trust workplace cultures.[Footnote 14]

Carriers that have been described by labor-management experts as having 
had contentious relations with their unions include American, Northwest 
Airlines, TWA, and US Airways. Also, all have a history of strikes and/
or court-recognized, nonstrike work actions. Furthermore, in the 1990s, 
many of these airlines had negotiations that tended to take much longer 
than Continental's and Southwest's. For example, the median length of 
time to negotiate contracts at US Airways in the 1990s was 34 months. 
By contrast, the length of time to negotiate contracts at Southwest was 
13 months.

Strikes Have Decreased and Nonstrike Work Actions Have Increased during 
the 1990s:

The incidence of strikes in the airline industry has decreased over 
time. Of the 16 strikes that occurred since 1978, 12 occurred prior to 
1990, and 4 occurred subsequently.[Footnote 15] These strikes ranged 
from as short as 24 minutes to more than 2 years. Figure 5 summarizes 
the incidence of strikes, presidential interventions, and court-
recognized, nonstrike work actions[Footnote 16] between 1978 and 2002.

Figure 5: Frequency of Strikes, Presidential Interventions, and Court-
recognized, Nonstrike Work Actions by Year:

[See PDF for image]

Note: There was one presidential intervention and one court-recognized, 
nonstrike work action in 2002.

[End of figure]

Six presidential interventions have been used to prevent strikes since 
deregulation. All six occurred since 1990.[Footnote 17] Not all 
presidential interventions were PEBs. In 1993, the President 
recommended binding interest arbitration for American's flight 
attendant negotiation. In 1998, and again in 2001, two PEB warnings 
occurred; one occurred during Northwest's pilot strike and the second 
for American flight attendants.[Footnote 18] Still, PEBs have been used 
three times in the airline industry since 1978: during a 1994 American 
pilot negotiation, a 1996 Northwest mechanic negotiation, and a 2000 
United mechanic negotiation.

Compared to strikes, the pattern for nonstrike work actions has been 
the opposite: their incidence has increased over time. In all, 10 
court-recognized, nonstrike work actions have occurred, each since 
1998. Such actions included various forms of slowdowns such as 
sickouts, work-to-rule, and refusals to work overtime.[Footnote 19]

According to a labor-management expert, carriers believe there have 
been many more nonstrike work actions than the 10 recognized by the 
courts, but their existence is difficult to prove. Airline management 
has been unable to produce the evidence needed to prove the actions are 
taking place.[Footnote 20] Those nonstrike work actions that were not 
identified by the court include a number of highly publicized labor 
disruptions. For example, the reported, but unconfirmed, nonstrike work 
action taken by United's pilots in the summer of 2000 was widely 
publicized by the media,[Footnote 21] yet the airline never brought the 
issue before a court of law. Additionally, it has been reported that 
the reason why these actions are difficult to detect is because a 
concern for safety often masks the source of such actions.

Airline Strikes Adversely Affect Communities, but Impacts Have Not Been 
Fully Analyzed and Vary from Place to Place:

Airline labor strikes have exerted adverse impacts on communities, but 
we identified no published studies that systematically and 
comprehensively analyzed a strike's net impact at the community level. 
For some strikes, we were able to identify evidence of individual 
impacts, such as reduced air service to and from the community, lost 
salaries or wages by striking or laid-off airline workers, or lower 
airport revenues. However, no studies have yet synthesized such 
information for a thorough picture of a strike's impact on a community. 
Our analysis indicates that a strike's potential impacts would likely 
vary greatly from community to community, because of differences in 
factors such as the amount of service available from other airlines. 
Thus, even if the impact of a strike were to be thoroughly studied at a 
particular community, it would be difficult to generalize these results 
to other locations.

Airline Strikes Have Had Negative Economic Impacts on Communities:

With the reduction of air service stemming from an airline strike, 
communities have experienced economic disruptions from a number of 
sources. Lost income of airline employees, fewer travelers and less 
spending in travel related businesses, and less spending by the airline 
are just some of the ways that local economies have been affected by a 
strike. For example, canceled flights have lead to the layoff of 
nonstriking employees, fewer travelers in the airport spending money in 
concessions, and reduced landing fees for airports. Because passenger 
traffic dropped, spending at hotels suffered.

Local reports illustrated some of a strike's economic impacts on a 
community during the 2001 Comair pilot strike. Comair, a regional 
carrier for Delta, has its main hub at the Cincinnati/Northern Kentucky 
International Airport. Over the course of the strike, which lasted 89 
days, Comair did not operate its 815 daily flights, causing the 25,000 
passengers who would normally have been on those flights in an average 
day to curtail their travel or make arrangements on other airlines. The 
airline's 1,350 striking pilots, many of whom are based in the area, 
lost an estimated $14 million in salaries, and the airline reported 
laying off an additional 1,600 nonstriking employees in the greater 
Cincinnati area as well. A concourse at the Cincinnati/Northern 
Kentucky International Airport closed during the strike. Reports stated 
that the concourse's 16 stores and restaurants lost more than $3 
million in sales, and that 152 of 193 workers were laid off. The 
airport also lost $1.2 million in landing fees from Comair during the 
strike.

Impacts can be felt not only at hub communities like Cincinnati, but 
also at smaller spoke communities that may be served only by the 
striking airline. When Northwest Airlines pilots struck in 1998, for 
example, Mesaba Airlines, a regional affiliate, suspended operations as 
well. At least 12 of the communities served by Mesaba during the 
Northwest strike had no other air service. One of these locations was 
Houghton, Michigan. According to local reports, travelers to and from 
Houghton had to drive as far as Green Bay (213 miles from Hancock, 
Michigan, location of Houghton's airport) or Wausau, Wisconsin, (192 
miles away) to find alternative flights. DOT also recognized the 
possible impacts of halting all airline service. The department ordered 
Mesaba to return service to 12 communities served from Minneapolis 
under the terms of Mesaba's Essential Air Service contract. However, 
before the order was implemented, the strike ended, and service was 
restored to these communities.

Full Impacts at the Community Level Are Largely Unknown:

While the available information indicates that airline strikes can and 
do have adverse impacts on communities, we identified no published 
studies that attempt to comprehensively measure these impacts at the 
community level. The kinds of impacts cited above, for example, may 
have mitigating factors that need to be taken into account. In the 
Comair strike, for example, union strike funds replaced some of the 
lost income of strikers. ALPA approved payments of $1,400 per month to 
striking Comair pilots during the strike period, allowing them to spend 
at a reduced rate in the community. A study that reliably estimated the 
impact of a strike at the community level would need to take factors 
such as these into account. No such study has been done.

Another reason for uncertainty about the full impacts of a strike on a 
community is that the impact of a strike on passengers' travel 
decisions is often unknown. For example, while more than 100 
communities lost Comair service to and from Cincinnati during the 
strike, all of these communities had service to Cincinnati from another 
airline. Thus, although hotel occupancy reportedly fell by more than 18 
percent in Northern Kentucky in the strike's first month, the degree to 
which this drop was attributable solely to the strike is unknown.

Apart from community-level analysis of strikes, some studies have 
examined the overall economic impacts of aviation on regions or states. 
For example, the Campbell-Hill Aviation Group, on behalf of an industry 
interest group, published a report examining the state-level impact of 
a potential loss of aviation service, but this study did not evaluate 
the impact of any particular strikes on local or regional 
economies.[Footnote 22] For example, the study stated that, in the year 
ending in March 2002, Delta had 10 percent of the passenger traffic in 
Texas and projected that a 10 percent reduction in aviation benefits 
would cause a daily reduction of $17.7 million in one measure of the 
Texas economy, its gross domestic product (GDP).[Footnote 23]

DOT also has on occasion produced wide-ranging assessments of the 
impacts of potential airline strikes, but these studies have never 
addressed the impacts of strikes that actually occurred. These studies 
are conducted at the request of the NMB, which uses them in evaluating 
whether the labor dispute threatens to interrupt essential 
transportation services in any part of the country. Once the NMB makes 
this assessment, it notifies the President, who may, at his discretion, 
empanel a PEB. If the NMB believes an airline strike is probable, it 
may request the department to examine the possible economic 
consequences of that strike. The department reports the extent of 
potentially lost air service to hub and spoke cities of the affected 
carrier, the number of passengers that would have no service if a 
strike were to occur, possible financial impacts on the carrier, 
indirect impacts on the national economy, and the mitigating and 
aggravating factors on the impacts of a strike. While DOT's reviews may 
examine many areas that could be affected by a strike, they examine 
only potential strikes and are not conducted after actual strikes.

Community-Level Impact of Any Future Strike Would Depend Partly on 
Service Available from Other Airlines:

While comprehensive studies of community-level impacts of past strikes 
are not available, one thing that emerges from our analysis is that any 
future strike's impact on a given community is likely to be affected by 
the level of service available from other airlines. If alternative 
service is greatly limited, travelers may have to take alternative--and 
less direct--routes offered by other airlines, or, in extreme cases, 
travel great distances to other airports in order to fly at all. Those 
impacts on travelers and businesses will vary depending on whether the 
community is a hub or spoke destination and even among an airline's 
hubs and spoke destinations.

The impact of a future strike at an airline's hub locations would 
depend in part on which airline is involved in the strike and its 
market share at the hub. Some airlines dominate air traffic at their 
hubs to a much greater extent than other airlines do, and a strike 
involving an airline with a dominant position at most of its hubs would 
likely have more impact than a strike involving an airline that is 
hubbing out of locations where competition is greater. In 2001, the 
airlines with the most and least dominated hubs (based on the 
percentage of total available seats controlled by the hubbing airline) 
were US Airways and America West. (See fig. 6.) US Airways averaged 81 
percent of the seats offered at its hubs, while America West averaged 
32 percent. Thus, based on the loss of seating capacity at its hubs, a 
strike at US Airways that halted service would likely have 
substantially more impact on its hub communities than a strike at 
America West that halted service.

Figure 6: 2001 Market Shares for Major Airlines at Their Hubs:

[See PDF for image]

[End of figure]

Among a single airline's hub cities, the impact of a strike would also 
likely vary depending on service available from alternate carriers at 
those cities. Again, the impact of a strike at the hubbing carrier or 
its regional partners would be more substantial at more highly 
dominated hubs. For example, in 2001, Delta and its regional partners 
accounted for 91 percent of the seats available in Cincinnati, but only 
19 percent of available seats at the Dallas/Fort Worth International 
Airport, which has the lowest market share among Delta's hubs. 
Consequently, a strike against Delta would likely have caused much 
greater disruption in Cincinnati than in Dallas. In contrast to the 
differences among Delta's hubs, the impact of a strike at Northwest 
would likely be felt equally at its Minneapolis/St. Paul, Detroit, and 
Memphis hubs. At each of its hubs, Northwest offered between 77 and 80 
percent of available seats.

As at hubs, the impacts of strikes on available air service at spoke 
cities would also depend on the amount and type of available 
alternative service. Those communities with air service from other 
carriers have a greater opportunity to mitigate the potential impact of 
a strike by enabling travelers to access the national air system using 
competing airlines. For example, figure 7 shows available air service, 
as of April 2003, at spoke communities served by Delta's regional 
partner, Comair, from Cincinnati, and by Northwest's regional carrier, 
Mesaba, from Minneapolis-St. Paul. Comair provided nonstop service to a 
total of 101 U.S. communities from Cincinnati. All but one of these 
communities had alternative service to Cincinnati from another airline-
-64 with nonstop service, 36 with one-stop service.[Footnote 24] Thus, 
if Comair's operations were to be disrupted by a strike, passengers at 
these communities would still have the opportunity for service to and 
from Cincinnati. The picture at Minneapolis-St. Paul is somewhat 
different. There, 10 of the 47 spoke cities served by Mesaba would have 
no alternative service to Minneapolis-St. Paul.

Figure 7: Spoke Communities Served from Cincinnati and Minneapolis-St. 
Paul Retain Service from Competing Airlines:

[See PDF for image]

Note: Data are from airline schedules for the week of April 21-25, 
2003.

[End of figure]

Other Factors Also Influence the Total Impact of Airline Strikes:

Several other factors could also influence the impact of a future 
strike on a community. The length of the strike is one such factor; 
longer strikes are more likely to have an adverse impact. Since 
deregulation, strikes have varied from 24 minutes for an American pilot 
strike in 1997 to almost 2 years for a Continental mechanics strike 
(1983-1985). Another likely factor is financial preparation; as already 
mentioned, the local impact of the Comair strike was likely mitigated 
somewhat by the union's payments to striking pilots. Similarly, the 
ability of airlines to operate through a strike--whether by hiring 
replacement workers or having union members cross picket lines--could 
also influence a strike's impact. For example, during a strike by 
Continental mechanics lasting almost 2 years, some Continental workers 
crossed the picket line and continued working. This allowed Continental 
to continue operation after a shutdown of only 3 days. Tactics used by 
the striking union can also reduce the overall impact. Alaska flight 
attendants used a technique called "CHAOS" (Creating Havoc Around Our 
System) that involved intermittent walkouts of certain crews on certain 
days.[Footnote 25] This tactic kept certain flights from operating, but 
did not shut down the entire airline.

Nonstrike Work Actions Have Greater Impacts on Passengers than Lengthy 
Negotiations:

Our analysis indicates that passenger service has been affected more 
adversely by nonstrike work actions than by an increase in the length 
of negotiations. Generally, but not always, as negotiation periods 
increased, there has been a slight decline in on-time flights.[Footnote 
26] However, the impact of these negotiations has been unclear, because 
the decline may also have been affected by other factors such as poor 
weather, aircraft maintenance, runway closures, air traffic control 
system decisions, or equipment failures. By comparison, the 10 court-
recognized, nonstrike work actions more clearly resulted in negative 
impacts on passengers, as shown through such measures as a decrease in 
the number of on-time flights, an increase in the number of flight 
problem complaints,[Footnote 27] and a decrease in passenger traffic.

Impact of Negotiation Lengths on Passengers Is Unclear:

Our analyses found a slight correlation between the length of 
negotiations and adverse impacts on passengers.[Footnote 28] We 
analyzed 23 negotiations between airlines and pilot unions from 1987 to 
2002.[Footnote 29] As negotiations lengthened, the frequency of on-time 
arrivals declined slightly. However, it is not clear if the change in 
on-time flights is attributable solely to negotiation lengths, or if 
other factors may also have contributed to the on-time performance. 
DOT's data on flight arrival and departure timeliness indicate whether 
a flight is delayed, but not what caused the delay. Common factors for 
delays include severe weather, aircraft maintenance, runway closures, 
customer service issues (e.g., baggage and accommodating passengers 
with special needs, such as those in wheelchairs or youths requiring 
escorts), air traffic control system decisions, and equipment failures. 
Thus, despite the apparent relation between lengthening negotiations 
and a deterioration of service quality, other exogenous factors may 
explain the change in flight delays.

Nonstrike Work Actions Have Clearer Adverse Impacts on Passengers:

Available data indicates that nonstrike work actions have had adverse 
impacts on passengers. While DOT data do not specifically identify 
these actions as the causes for the delays or the reasons for the 
complaints, increases in the number of late flights, passenger 
complaints, and decreases in passenger traffic during the period of the 
actions suggest a clearer relationship than is apparent with these same 
measures and lengthy negotiations. The periods in which nonstrike work 
actions occur show decreases in on-time flights, increases in passenger 
complaints, and decreases in passenger traffic. Two examples of such 
actions, the American pilot sickout and the Delta pilot slowdown, are 
described in the next two sections.

American Pilot Sickout:

American experienced decreases in on-time flights, increases in 
customer complaints, and drops in passenger traffic during a pilot 
sickout. (Under FAA regulations, any airline pilot can take himself out 
of the cockpit if he is sick, overly stressed, or does not feel "fit to 
fly." During a sickout, pilots utilize these regulations to excuse 
themselves from work in order to put economic pressure on the airline 
during the negotiation.) In December 1998, AMR Corp, the parent company 
of American, purchased Reno Air, whose pilots were then to be 
integrated into a single workforce. In early 1999, American pilots 
began a sickout over a dispute involving a side agreement that would 
integrate Reno Air operations. On February 10, 1999, a federal judge 
ordered the pilots to return to work. Subsequently, the number of 
flights cancelled increased. On February 13, 1999, the judge found the 
pilots' union in contempt of court.[Footnote 30] By February 16, the 
airline reported a return to its normal schedule but, reportedly, 
pilots were still refusing to work overtime and were adhering to work-
to-rule practices, meaning that they would follow every regulation 
stipulated by the FAA in order to slow the airline.

Figure 8 illustrates on-time arrival and departure rates at Dallas/Fort 
Worth International Airport for the period of August 1998 through 
December 1999 for American and Delta, which also operates a hub at that 
airport. The on-time flight statistics for the two airlines are 
relatively equal prior to the sickout period. During the next several 
months, American's on-time record fell below that of Delta. Both 
carrier's on-time rates declined somewhat, suggesting that other 
factors such as weather might also influence flight operations. 
However, the difference between the two airlines during this period is 
greater than in other periods. In August 1999, when Reno Air's 
operations were officially integrated--even though no agreement was 
made--the two airlines' records resumed a more closely parallel path.

Figure 8: On-Time Flight Statistics for American and Delta at Dallas/
Fort Worth International Airport, August 1998 to December 1999:

[See PDF for image]

[End of figure]

The American sickout also caused increases in passenger flight problem 
complaints. Figure 9 compares the change in complaints against American 
and Delta. The complaints began to rise in February of 1999 and, 
generally, continued to increase into the summer, when American reached 
an agreement with its pilots.

Figure 9: Flight Problem Complaints for American and Delta from August 
1998 to December 1999:

[See PDF for image]

[End of figure]

A comparison of passenger traffic between American and Delta at Dallas/
Fort Worth International Airport indicates that passenger traffic 
declined either to avoid the carrier experiencing the nonstrike work 
action or due to grounded flights. (American grounded up to 2,250 
flights per day during the sickout period.) (See fig. 10.) During the 
American pilot sickout in February 1999, there was a drop in American's 
passenger traffic. Compared to the year before, American's passenger 
traffic declined by 15 percent while Delta's passenger traffic rose by 
5 percent.

Figure 10: Passengers Carried on American and Delta at Dallas/Fort 
Worth International Airport, February 1998 and 1999:

[See PDF for image]

[End of figure]

Delta Pilot Slowdown:

Another example of the impact of nonstrike work actions on passengers 
is the Delta slowdown in 2000-2001. In September 1999, Delta began 
negotiations with its pilots and submitted a contract proposal, which 
sought to tie future raises to the company's financial performance. As 
a result, Delta pilots began refusing to fly overtime in the winter of 
2000. When compared to Continental's operations at Atlanta Hartsfield 
International Airport,[Footnote 31] Delta experienced substantial 
declines in on-time flights and increases in flight problem complaints 
while also experiencing declines in passenger traffic. Delta first went 
to court on December 5, 2000, and was denied an injunction. The airline 
then took the suit to the Eleventh Circuit on January 18, 2001, and the 
denial was overturned and remanded for injunction.

Figure 11 shows the percent of on-time flights for both Delta and 
Continental at Atlanta's Hartsfield International Airport for the 
period of August 2000 to August 2001. During the slowdown period from 
December to January, there is a decline in Delta's on-time flights 
relative to Continental's. Once the court issued an injunction against 
the union, the two airlines resumed a more similar pattern.

Figure 11: On-Time Flight Statistics for Delta and Continental at 
Atlanta Hartsfield International Airport, August 2000 to August 2001:

[See PDF for image]

[End of figure]

Delta's pilot slowdown also showed an increase in passenger complaints 
during this period. Figure 12 compares the change in passenger flight 
problem complaints about Delta and Continental during Delta's slowdown. 
Flight complaints rose sharply in December and January, peaking at 185 
in January 2001, and immediately declining after the union was enjoined 
on January 18, 2001.

Figure 12: Flight Problem Complaints for Delta and Continental, August 
2000 to August 2001:

[See PDF for image]

[End of figure]

Finally, Delta's passenger traffic at Atlanta Hartsfield International 
Airport also declined during the slowdown, but the pattern was less 
pronounced than for the American sickout discussed earlier. (See fig. 
13.) In December 2000, when Delta first pursued an injunction in court, 
Delta's and Continental's passenger traffic dropped by 9 and 4 percent, 
respectively. Unlike the American sickout (when up to 2,250 flights 
were grounded per day), Delta pilots' refusal to fly overtime grounded 
far fewer flights--about 100 to 125 per day--which means less 
passengers were affected by cancelled flights as compared to American.

Figure 13: Change in Passenger Traffic on Delta and Continental at 
Atlanta Hartsfield International Airport in December 1999 and 1 Year 
Later during the Nonstrike Work Action in December 2000:

[See PDF for image]

[End of figure]

Agency Comments:

We provided copies of a draft of this report to NMB for review and 
comment. NMB indicated it generally agreed with the accuracy of our 
report, and it provided technical clarifications, which were 
incorporated into the report as appropriate. The NMB also provided an 
additional statement, which is included in appendix VIII. We also 
provided selected portions of a draft of this report to the major 
airlines and unions to verify the presentation of factual material. We 
incorporated their technical clarifications as appropriate.

As agreed with your office, unless you publicly announce the contents 
of this report earlier, we plan no further distribution until 30 days 
from the report date. At that time, we will provide copies to the 
Honorable Francis J. Duggan, Chairman of the National Mediation Board; 
the Honorable Norman Y. Mineta, Secretary of Transportation; and other 
interested parties. We also will make copies available to others upon 
request. In addition, the report will be available at no charge on the 
GAO Web site at http://www.gao.gov.

If you or your staff have any questions about this report, please call 
me at (202) 512-2834, HeckerJ@gao.gov or Steve Martin at (202) 512-
2834, MartinS@gao.gov. Appendix VIII lists key contacts and key 
contributors to this report.

Sincerely yours,

JayEtta Z. Hecker 
Director, Physical Infrastructure Issues:

Signed by JayEtta Z. Hecker: 

[End of section]

Appendix I: Additional Questions:

In addition to the three primary questions, you asked us how many 
states use a system of binding arbitration and last offer arbitration 
with their essential service personnel. You also asked how many times 
in the last 25 years has Congress had to intervene in a dispute with 
railroads and what were the outcomes.

As of November 2002, according to information from officials of Harvard 
University, 23 states--including the District of Columbia--use binding 
arbitration and/or last offer arbitration as arbitration options. (See 
table 2.) Of those, none use last offer arbitration as their sole 
arbitration option.

Table 2: States That Include Binding Arbitration or Last, Best Offer 
Arbitration as a Dispute Resolution Option:


1; State: California; Type of arbitration included in resolution 
options: Binding arbitration.

2; State: Maine; Type of arbitration included in resolution options: 
Binding arbitration.

3; State: Illinois; Type of arbitration included in resolution 
options: Last offer arbitration.

4; State: Michigan; Type of arbitration included in resolution 
options: Last offer arbitration.

5; State: Oklahoma; Type of arbitration included in resolution 
options: Last offer arbitration.

6; State: Tennessee; Type of arbitration included in resolution 
options: Last offer arbitration.

7; State: Colorado; Type of arbitration included in resolution 
options: Binding arbitration and last offer arbitration.

8; State: Conneticut; Type of arbitration included in resolution 
options: Binding arbitration and last offer arbitration.

9; State: Delaware; Type of arbitration included in resolution 
options: Binding arbitration and last offer arbitration.

10; State: District of Columbia; Type of arbitration included in 
resolution options: Binding arbitration and last offer arbitration.

11; State: Hawaii; Type of arbitration included in resolution 
options: Binding arbitration and last offer arbitration.

12; State: Iowa; Type of arbitration included in resolution options: 
Binding arbitration and last offer arbitration.

13; State: Maryland; Type of arbitration included in resolution 
options: Binding arbitration and last offer arbitration.

14; State: Minnesota; Type of arbitration included in resolution 
options: Binding arbitration and last offer arbitration.

15; State: Montana; Type of arbitration included in resolution 
options: Binding arbitration and last offer arbitration.

16; State: Nevada; Type of arbitration included in resolution 
options: Binding arbitration and last offer arbitration.

17; State: Ohio; Type of arbitration included in resolution options: 
Binding arbitration and last offer arbitration.

18; State: Oregon; Type of arbitration included in resolution 
options: Binding arbitration and last offer arbitration.

19; State: Pennsylvania; Type of arbitration included in resolution 
options: Binding arbitration and last offer arbitration.

20; State: Rhode Island; Type of arbitration included in resolution 
options: Binding arbitration and last offer arbitration.

21; State: Texas; Type of arbitration included in resolution 
options: Binding arbitration and last offer arbitration.

22; State: Washington; Type of arbitration included in resolution 
options: Binding arbitration and last offer arbitration.

23; State: Wisconsin; Type of arbitration included in resolution 
options: Binding arbitration and last offer arbitration.

Source: Harvard University.

[End of table]

According to information from the National Mediation Board, in the last 
25 years Congress intervened in railroad negotiations eight times. 
These interventions occurred between 1982 and 1992. (See table 3.) 
Congressional interventions do not involve the airlines.

Table 3: Congressional Interventions in Railroad Negotiations:

1; Date: 6/26/92; Remark: Binding arbitration imposed by Congress.

2; Date: 6/26/92; Remark: Binding arbitration imposed by Congress; 
parties reached voluntary agreement.

3; Date: 6/26/92; Remark: Binding arbitration imposed by Congress in 
three cases; parties reached voluntary agreement in all others.

4; Date: 4/18/91; Remark: Terms imposed by Congress.

5; Date: 8/4/88; Remark: Status quo extended by Congress.

Date: 6: 9/9/88; Remark: 6: Terms imposed by Congress.

6; Date: 1/28/87; Remark: Status quo extended by Congress; parties 
reached voluntary agreement.

7; Date: 8/21/86; Remark: Status quo extended by Congress.

Date: 8: 9/30/86; Remark: 8: Terms imposed by Congress.

8; Date: 9/22/82; Remark: Terms imposed by Congress.

Source: NMB.

[End of table]

[End of section]

Appendix II: Objectives, Scope, and Methodology:

This report examines the following three questions:

* What have been the major trends of labor negotiations in the airline 
industry since the industry was deregulated in 1978, including the 
number and length of negotiations and the number of strikes, 
presidential interventions to avoid or end strikes, and nonstrike work 
actions?

* What has been the impact of airline strikes on communities?

* What have been the impacts of the length of negotiations and the 
occurrence of nonstrike work actions on passengers?

To determine the trends of airline labor negotiations, including the 
length of negotiations, the number of strikes, the number of 
presidential interventions, and the number of nonstrike work actions, 
we analyzed data from multiple sources. We obtained our data from major 
U.S. airlines and various labor organizations. The labor groups 
included the Air Line Pilots Association (ALPA), the Coalition of 
Airline Pilots Associations (CAPA), the Association of Flight 
Attendants (AFA), the International Association of Machinists and 
Aerospace Workers (IAM), and the International Brotherhood of Teamsters 
(IBT). We also received substantial negotiation and contract data from 
the U.S. National Mediation Board (NMB) and the Airline Industrial 
Relations Conference (AIRCon), a group funded by major U.S. airlines to 
facilitate the exchange of contract negotiation information and other 
labor relations matters among carriers. Because data were not available 
for commuter (regional) and all-cargo carriers, we originally limited 
our analysis to passenger airlines that are considered majors by the 
U.S. Department of Transportation (DOT) that were in operation during 
2001. These airlines were Alaska, America West, American, American 
Eagle, American Trans Air (recently renamed as ATA Airlines), 
Continental, Delta, Northwest, Southwest, TWA[Footnote 32], United, and 
US Airways. We later were not able to include American Eagle or 
American Trans Air, which met the DOT criteria, in our analysis because 
we were not able to obtain information on these airlines.

Dates listed as negotiation start dates differ between the airlines, 
AIRCon, and NMB, therefore, limiting the accuracy of the data 
collected. A negotiation's "start date" can be when the carrier's 
management or union exchange a written notice stating that one of the 
parties desires a change in rates of pay, work rules, or working 
conditions or when face-to-face negotiations actually begin (i.e., when 
the two parties sit at a table and verbally negotiate the contract). By 
contrast, the NMB defines a "start date" only when it is called for 
mediation. For the purposes of our data collection, we first used dates 
provided by the airlines to AIRCon at the time the contract was being 
negotiated. If those were not available, we turned to the dates 
provided directly to us by the airlines from their files when 
available. We were supplied different dates, including ratification 
dates and settlement dates, for the end point of negotiations. We know 
of at least one union that did not have its members vote to ratify 
contract changes until after 1982. Again, we first used AIRCon provided 
ratification or settlement dates, if possible, and, in cases where 
these were not available, we used airline provided dates, or dates 
provided by NMB. We were unable to calculate a negotiation length for 
83 of the 236 contracts because we could not identify either a start 
date or a ratification or settlement date for them. In addition, we did 
not calculate negotiation lengths for 6 initial contracts, the first 
contract a union signs after a craft or class becomes recognized at an 
airline.

To obtain information on nonstrike work actions, we also examined media 
sources and also reviewed federal court records. Based on the 
information we were able to review, we defined court-recognized, 
nonstrike work actions as those work actions for which airlines 
obtained either temporary restraining orders or injunctions against 
unions. Officials from the airlines we spoke with stated that there 
have been many more nonstrike work actions than the 10 judged by the 
courts. Even some union officials stated that union members have taken 
actions that they considered legal under their contract or Federal 
Aviation Administration (FAA) regulations. These same actions, on other 
occasions, have been found to be violations of the status quo by the 
courts. Additional cases of nonstrike work actions, however, have been 
difficult to prove. Airline management has either been unable to 
produce the needed evidence in court or airlines never took unions to 
court. Union officials also strenuously deny illegal activity on the 
part of their unions.

We interviewed officials from airlines, labor unions, the NMB, and 
industry groups. The airlines we spoke with included American, American 
Trans Air, Continental, Delta, Northwest, Southwest, Comair, Atlantic 
Coast Airlines, Federal Express, United Parcel Service, and Airborne 
Express. We only analyzed data from airlines where we could obtain full 
data. The labor groups we interviewed included ALPA, CAPA, AFA, IAM, 
and IBT. We also held discussions with officials from NMB, the Air 
Transport Association (ATA), Communities for Economic Strength Through 
Aviation (CESTA), and AIRCon.

To determine the impact of airline strikes on communities, we searched 
for studies of these impacts from airlines, industry groups, and 
academic institutions. Specifically, we talked with United, Delta, 
Comair, ATA, and CESTA. Based on suggestions from airlines, unions, 
interest groups, and our own research we also talked with faculty at 
Harvard, the Massachusetts Institute of Technology, the University of 
Cincinnati, and the University of Kentucky. None of these sources knew 
of any published studies on specific impacts of past strikes on any 
community. In discussions with NMB, we learned that DOT produces 
studies, solely at the request of NMB, on the likely impacts of 
probable airline strikes on the airline and local and national 
economies. We obtained a copy of one of these studies from DOT. We also 
analyzed data on airline schedules and market share from Sabre, Inc.; 
BACK Aviation Solutions; and the Campbell-Hill Aviation Group. We also 
reviewed local media reports from communities affected by strikes. Due 
to the lack of published studies or generally accepted methodology to 
determine the impact of strikes, we cannot discount other possible 
causes for these impacts.

To determine the impact of the length of negotiations and court-
recognized, nonstrike work actions on passengers, we analyzed data on 
airline operational performance from DOT's Air Travel Consumer Report 
and passenger traffic information from BACK Aviation Solutions. To 
determine the impact of negotiation lengths, we compared on-time 
performance throughout the course of 23 negotiations between airlines 
and pilot unions. To determine the impact of nonstrike work actions, we 
compared airlines' on-time performance and flight complaints between 
airlines before, during, and after the 10 court-recognized, nonstrike 
work actions. We also analyzed changes in passenger traffic among 
airlines during these actions. Though our analysis included performing 
a correlation between on-time arrivals and the length of airline labor 
contract negotiations, we did not perform any multivariate analysis, 
and thus, cannot rule out possible alternative causes.

We conducted our review between August 2002 and May 2003 in accordance 
with generally acceptable government accounting principles.

[End of section]

Appendix III: Additional Background Information on the Railway Labor 
Act:

The Railway Labor Act, 45 U.S.C. § 151, et. seq., (RLA) was passed by 
Congress in May 1926 to improve labor-management relations in the 
railroad industry. In January 1926, a committee of railway executives 
and union representatives jointly presented a draft bill to Congress 
that was universally supported by those in the industry. Congress did 
not make any changes of substance to the bill, and the RLA was signed 
by the President on May 20, 1926.[Footnote 33] Congress has not altered 
the basic structure of the act that labor and management use to resolve 
what are known as "major disputes," i.e., disputes over the creation 
of, or change of, agreements concerning rates of pay, rules, or working 
conditions. After discussions with airline management and labor the act 
was applied to air carriers in 1936.[Footnote 34]

As a method to keep labor disputes from interrupting commerce, the new 
law represented a significant departure from past labor practices by 
requiring both sides to preserve the status quo during collective 
bargaining and preventing either side from taking unilateral action. 
When labor and management representatives drafted the legislation, they 
agreed that both sides of a labor dispute should negotiate the dispute 
and not make any change in the working conditions in dispute until all 
issues were worked out under the deliberate process outlined in the 
act.

Key Provisions of the RLA:

The RLA is not a detailed statute. The main purposes of the act are 
threefold. First, Congress intended to establish a system that resolves 
labor disputes without interrupting commerce in the airline and 
railroad industries. The statute requires both labor and management "to 
exert every reasonable effort to make and maintain agreements ... and 
to settle all disputes ...."[Footnote 35] The Supreme Court has 
described that duty as being the "heart" of the act.[Footnote 36]

Second, the act imposes on the parties an obligation to preserve and to 
maintain unchanged during the collective bargaining process "those 
actual, objective working conditions and practices, broadly conceived, 
which were in effect prior to the time the pending dispute arose and 
which are involved in or related to that dispute."[Footnote 37] This is 
generally known as "maintaining the status quo.":

Finally, the act requires that: "Representatives, for the purposes of 
this Act, shall be designated by the respective parties ... without 
interference, influence, or coercion exercised by either party over the 
self-organization or designation of representatives by the 
other.[Footnote 38]" That obligation was strengthened in 1934 so as to 
prohibit either party from interfering with, influencing, or coercing 
"the other in its choice of representatives[Footnote 39].":

Collective Bargaining Process under the RLA:

The collective bargaining process established by the RLA is designed to 
preserve labor relations peace. The carrier is required to maintain the 
status quo before, during, and for some time after the period of formal 
negotiations. The union and the employees have the reciprocal 
obligation to refrain from engaging in actions that are designed to 
economically harm the company, such as strikes during the same period. 
These actions are termed economic self-help in the act.

Airline labor and management periodically engage in negotiations to 
reach a comprehensive collective bargaining agreement that will remain 
in effect for a defined period, usually 2 or 3 years. The parties are 
required to submit written notices ("Section 6 notices") of proposed 
changes in rates of pay, rules, and working conditions. In some cases, 
parties may agree that collective bargaining is required to proceed 
according to a particular time schedule. If those direct discussions do 
not result in an agreement resolving a dispute, either party or the 
National Mediation Board (NMB) can initiate mediation.

The RLA requires both parties to maintain collectively bargained rates 
of pay, rules, and working conditions while they negotiate amendments 
to the agreement. This requirement extends the status quo after an 
existing agreement becomes amendable if no agreement is reached by that 
time. If mediation proves unsuccessful, the NMB appeals to the parties 
to submit the dispute to binding interest arbitration. If that is 
unsuccessful, the statute provides for a 30-day cooling-off period. 
There can be no lawful self-help by either side during this period. 
Even after the termination of the 30-day period, the self-help option 
is contingent. If a dispute threatens "substantially to interrupt 
interstate commerce to a degree such as to deprive any section of the 
country of essential transportation services," the President, upon 
notification by the NMB, is empowered to create an emergency board to 
investigate the dispute and issue a report that is followed by an 
additional 30-day period for final negotiations.

After this process, the parties are left to self-help and further 
negotiation to reach a settlement. The only alternative is 
congressional action, which has never been used in an airline labor 
dispute.

[End of section]

Appendix IV: Contracts Negotiated and Ratified or Settled by the 
Amendable Date:

1; Carrier: Alaska; Union: ALPA; Craft: Pilots; Amendable date: 4/30/
80; Ratification or settlement date: 4/15/80.

2; Carrier: Alaska; Union: ALPA; Craft: Pilots; Amendable date: 4/30/
83; Ratification or settlement date: 3/2/83.

3; Carrier: Alaska; Union: ALPA; Craft: Pilots; Amendable date: 5/1/91; 
Ratification or settlement date: 4/29/91.

4; Carrier: Alaska; Union: ALPA; Craft: Pilots; Amendable date: 4/30/
93; Ratification or settlement date: 2/16/93.

5; Carrier: Alaska; Union: ALPA; Craft: Pilots; Amendable date: 12/1/
97; Ratification or settlement date: 10/15/97.

6; Carrier: American; Union: TWU; Craft: Mechanics; Amendable date: 3/
1/93; Ratification or settlement date: 10/7/91.

7; Carrier: Continental; Union: TWU; Craft: Dispatchers; Amendable 
date: 4/1/99; Ratification or settlement date: 6/1/98.

8; Carrier: Delta; Union: PAFCA; Craft: Flight control; Amendable date: 
1/1/82; Ratification or settlement date: 1/22/81.

9; Carrier: Delta; Union: PAFCA; Craft: Flight control; Amendable date: 
1/1/86; Ratification or settlement date: 10/25/85.

10; Carrier: Northwest; Union: ALPA; Craft: Pilots; Amendable date: 7/
1/80; Ratification or settlement date: 6/28/80.

11; Carrier: Northwest; Union: ALPA; Craft: Pilots; Amendable date: 3/
1/94; Ratification or settlement date: 7/6/93.

12; Carrier: Northwest; Union: IAM; Craft: Mechanics; Amendable date: 
7/1/88; Ratification or settlement date: 6/6/88.

13; Carrier: TWA; Union: ALPA; Craft: Pilots; Amendable date: 9/1/95; 
Ratification or settlement date: 10/3/94.

14; Carrier: United; Union: ALPA; Craft: Pilots; Amendable date: 11/30/
94; Ratification or settlement date: 7/12/94.

15; Carrier: United; Union: IAM; Craft: Dispatchers; Amendable date: 
11/30/94; Ratification or settlement date: 7/12/94.

Legend:

ALPA = Air Line Pilots Association:

TWU = Transport Workers Union:

PAFCA = Professional Airline Flight Control Association:

IAM = International Association of Machinists and Aerospace Workers:

Sources: National Mediation Board, airlines, and labor unions.

Note: At least one union notified us that they did not have their 
members ratify agreements before 1982.

[End of table]

[End of section]

Appendix V: Airline Strikes That Have Occurred Since Deregulation:

1; Carrier: Alaska; Union: IAM; Craft or class: Mechanics; Duration of 
negotiations: 2/17/84-6/3/85; Dates of strike: 3/4/85 - 5/4/85; 
Duration of strike: 2 months.

2; Carrier: American; Union: APA; Craft or class: Pilots; Duration of 
negotiations: 6/30/94-5/5/97; Dates of strike: 2/15/97; Duration of 
strike: 24 minutes.

3; Carrier: American; Union: APFA; Craft or class: Flight attendants; 
Duration of negotiations: 11/18/92-10/10/95; Dates of strike: 11/18/93 
- 11/22/93; Duration of strike: 5 days.

4; Carrier: American; Union: TWU; Craft or class: Flight instructors; 
Duration of negotiations: Not available; Dates of strike: 11/4/79; 
Duration of strike: 1 day.

5; Carrier: Continental; Union: ALPA; Craft or class: Pilots; Duration 
of negotiations: Not available; Dates of strike: 10/1/83 - 10/31/85; 
Duration of strike: 2 years.

6; Carrier: Continental; Union: IAM; Craft or class: Mechanics; 
Duration of negotiations: 1981-1985; Dates of strike: 8/13/83 - 4/16/
85; Duration of strike: 1 1/2 years.

7; Carrier: Continental; Union: IBT; Craft or class: Flight engineers; 
Duration of negotiations: Not available; Dates of strike: 9/23/79 - 10/
6/79; Duration of strike: 13 days.

8; Carrier: Continental; Union: UFA; Craft or class: Flight attendants; 
Duration of negotiations: Not available; Dates of strike: 12/5/80 - 12/
21/80; Duration of strike: 16 days.

9; Carrier: Continental; Union: UFA; Craft or class: Flight attendants; 
Duration of negotiations: Not available; Dates of strike: 10/1/83 - 4/
17/85; Duration of strike: 1 1/2 years.

10; Carrier: Continental; Union: IAM; Craft or class: Flight 
attendants; Duration of negotiations: 1985-1989; Dates of strike: 3/15/
89 - 12/15/89; Duration of strike: 9 months.

11; Carrier: Northwest; Union: ALPA; Craft or class: Pilots; Duration 
of negotiations: 8/27/96-9/12/98; Dates of strike: 8/29/98 - 9/12/98; 
Duration of strike: 15 days.

12; Carrier: Northwest; Union: IAM; Craft or class: Mechanics, Flight 
kitchen; Duration 
of negotiations: 9/29/81-6/16/82; Dates of strike: 5/22/82 - 6/25/82; 
Duration of strike: 1 month.

13; Carrier: Southwest; Union: IAM; Craft or class: Mechanics; Duration 
of negotiations: Not available; Dates of strike: 1/13/80 - 2/1/80; 
Duration of strike: 19 days.

14; Carrier: United; Union: ALPA; Craft or class: Pilots; Duration of 
negotiations: 1/30/84-6/17/85; Dates of strike: 5/17/85 - 6/14/85; 
Duration of strike: 29 days.

15; Carrier: United; Union: IAM; Craft or class: Mechanics, Ramp and 
stores, Food services, Dispatchers, Security Officers; Duration of 
negotiations: 10/1/78-5/24/79; Dates of strike: 3/31/79 - 5/27/79; 
Duration of strike: 2 months.

16; Carrier: USAir; Union: IAM; Craft or class: Mechanics; Duration of 
negotiations: 2/14/90-10/13/92; Dates of strike: 10/5/92 - 10/8/92; 
Duration of strike: 3 days.

Legend:

IAM = International Association of Machinists and Aerospace Workers:

APA = Allied Pilots Association:

APFA = Association of Professional Flight Attendants:

TWU = Transport Workers Union of America - AFL-CIO:

IBT = International Brotherhood of Teamsters:

UFA = Union of Flight Attendants:

ALPA = Air Line Pilots Association:

Sources: NMB, airlines, and labor unions.

[End of section]

[End of table]

Appendix VI: Court-recognized, Nonstrike Work Actions Since 
Deregulation:

1; Carrier: American; Union: APA; Craft: Pilots; Work action: 
Sickout; Plaintiff request: TRO sought; Date of court decision: 2/10/
1999; Outcome: Awarded.

2; Carrier: American; Union: TWU; Craft: Mechanics; Work action: 
Slowdown; Plaintiff request: TRO sought; Date of court decision: 2001; 
Outcome: Awarded.

3; Carrier: American; Union: TWU; Craft: Mechanics; Work action: 
Slowdown; Plaintiff request: TRO sought; Date of court decision: 1998; 
Outcome: Awarded.

4; Carrier: American; Union: TWU; Craft: Mechanics; Work action: 
Slowdown; Plaintiff request: Injunction sought; Date of court decision: 
1999; Outcome: Granted.

5; Carrier: Delta; Union: ALPA; Craft: Pilots; Work action: Refuse 
overtime; Plaintiff request: Injunction sought; Date of court decision: 
2001; Outcome: Granted.

6; Carrier: Northwest; Union: AMFA; Craft: Mechanics; Work action: 
Refuse overtime; Plaintiff request: Injunction sought; Date of court 
decision: 5/11/2001; Outcome: Granted.

7; Carrier: Northwest; Union: IAM; Craft: Clerical, Flight Stock, 
Kitchen; Work action: Slowdown; Plaintiff request: Injunction sought; 
Date of court decision: 2/25/1999; Outcome: Granted.

8; Carrier: Northwest; Union: IBT; Craft: Flight attendants; Work 
action: Sickout; Plaintiff request: Injunction sought; Date of court 
decision: 1/5/2000; Outcome: Granted.

9; Carrier: TWA; Union: IAM; Craft: Mechanics; Work action: Sickout 
and work stoppage; Plaintiff request: TRO sought; Date of court 
decision: 1998; Outcome: Awarded.

10; Carrier: United; Union: IAM; Craft: Mechanics; Work action: 
Slowdown; Plaintiff request: Injunction sought; Date of court decision: 
7/1/2002; Outcome: Granted.

Legend:

APA = Allied Pilots Association:

TWU = Transport Workers Union of America - AFL-CIO:

ALPA = Air Line Pilots Association:

AMFA = Aircraft Mechanics Fraternal Association:

IAM = International Association of Machinists and Aerospace Workers:

IBT = International Brotherhood of Teamsters:

Sources: NMB, airlines, and courts.

[End of table]

[End of section]

Appendix VII: Number of Presidential Interventions Since Deregulation:

1; Carrier: American; Union: APA; Craft: Pilots; Amendable date: 8/
31/94; Presidential intervention date: 2/15/97; Actions taken: 
Presidential Emergency Board.

2; Carrier: American; Union: APFA; Craft: Flight attendants; 
Amendable date: 11/1/98; Presidential intervention date: 2001; Actions 
taken: Presidential Emergency Board warning.

3; Carrier: American; Union: APFA; Craft: Flight attendants; 
Amendable date: 12/31/92; Presidential intervention date: 1993; Actions 
taken: President recommends binding interest arbitration.

4; Carrier: Northwest; Union: ALPA; Craft: Pilots; Amendable date: 
11/2/96; Presidential intervention date: September 1998; Actions taken: 
Presidential Emergency Board warning.

5; Carrier: Northwest; Union: AMFA; Craft: Mechanics; Amendable 
date: 9/30/96; Presidential intervention date: 3/12/01; Actions taken: 
Presidential Emergency Board.

6; Carrier: United; Union: IAM; Craft: Mechanics; Amendable date: 7/
12/00; Presidential intervention date: 1/19/02; Actions taken: 
Presidential Emergency Board.

Legend:

APA = Allied Pilots Association:

APFA = Association of Professional Flight Attendants:

ALPA = Air Line Pilots Association:

IAM = International Association of Machinists and Aerospace Workers:

AMFA = Aircraft Mechanics Fraternal Association:

Sources: NMB and airlines.

[End of table]

[End of section]

Appendix VIII: Comments from the National Mediation Board:

NATIONAL MEDIATION BOARD WASHINGTON, D.C. 20572:
OFFICE OF THE CHAIRMAN (202)692-5000:

May 30, 2003:

Steven C. Martin 
Assistant Director 
U.S. General Accounting Office 
441 G Street, N W Washington, DC 20548:

RE: National Mediation Board Statement on The General Accounting Office 
Draft Report "Airline Labor Relations: Information on Trends and Impact 
on Labor Actions" GAO-03-652:

Dear Mr. Martin:

This response to the GAO report further explains the role of the 
National Mediation Board (NMB) and its expanded activities to 
facilitate the relationships between airlines and their unions.

The NMB, was established by the 1934 amendments to the Railway Labor 
Act (RLA) of 1926. The Board is an independent agency performing a 
central role in facilitating harmonious labor-management relations 
within two of the nation's key transportation sectors - the railroads 
and airlines. Pursuant to the RLA, NMB programs provide an integrated 
dispute resolution process that effectively meets the NMB's statutory 
mandate to minimize work stoppages in the railroad and airline 
industries by securing voluntary agreements.

The legislation creating the NMB is unique in that it was drafted by 
labor and management, then passed by the Congress without amendment in 
1934.

Beginning in 1994, the Commission on the Future of Worker-Management 
Relations (the "Dunlop Commission") and its subcommittees examined each 
of the nation's labor laws and the labor enforcement agencies. The 
Airline Industry Labor-Management Committee, an offshoot of the Dunlop 
Commission, was convened in October, 1995. In April, 1996, this body, 
made up of representatives from airline management and labor, offered 
as its first recommendation, "No Legislative Changes to the Railway 
Labor Act." The Committee recommended several administrative changes, 
all of which were subsequently adopted by the NMB.

The negotiation process usually begins with the parties engaging in 
direct negotiations, without the presence or influence of the Board and 
its mediators. The parties control the timing of direct negotiations, 
with some beginning well before the amendable date of their current 
contracts, and some beginning very near the amendable date. How long it 
will take to complete negotiations and produce a tentative contract 
agreement (an agreement between the parties subject to ratification by 
a vote of the union members) is greatly influenced by the point at 
which the parties apply for mediation, and how many unresolved issues 
remain when they apply for mediation.

* The responsibility of the NMB to work with parties in both industries 
to avoid disruptions to essential transportation services puts the 
Board in a unique position to recognize and understand the impact of 
potential work stoppages in both industries, for all sections of the 
country.

* The Board has no control over the parties in direct negotiations. 
Although some parties reach final resolution in direct negotiations, 
the majority of parties file for mediation with the Board to resolve 
their many open issues. In fact, within the last year the Board 
received a case with almost 500 open issues from parties who had been 
in direct negotiations, without the Board's presence, for over one 
year.

If an agreement is not reached in direct negotiations, the parties are 
required by law to come to the Board for mediation as part of the 
contract negotiation process. Application for mediation with the NMB 
may be made by either party, at which time a mediator is appointed and 
the Board's active involvement begins.

When mediation cases are brought to the NMB there are internal customer 
service standards against which the Board measures its performance. 
Based upon the parties' performance over the years, the Board has 
established the goal of managing cases to closure within one calendar 
year of docketing, or within 45 days of face-to-face negotiations.

In Fiscal Year 2002, the Board handled 59 mediation cases. 55 (93%) 
were closed with 45 days or less of face-to-face negotiation. 49 of the 
59 cases (80%) were closed in one year or less.

[See PDF for image]

[End of figure]

In FY 2001, 94% of mediation cases were closed with 45 days or fewer of 
negotiations, and 60% were closed in less than one year.

In FY 2002 cases were in mediation for an average of 14 days (at the 
table) spread out over 287 calendar days. (Railroads averaged 7.3 days 
of mediation in a 169 day period, and Airlines averaged 22.2 days of 
mediation in a 420 day period.):

[See PDF for image]

[End of figure]

In FY 2002, six airline cases were spread over more than 500 days - 
four United cases, Delta/TWU, and PSA/ALPA.

An excellent measure of performance,

particularly as it relates to the amount of Docketing - TA time it takes 
the Board's mediators to 
reach tentative agreements (contract language agreed to by both 
bargaining committees, but subject to ratification by union 
membership), is the amount of time between the docketing of a case and 
the development of a tentative contract agreement. Over approximately 
the past year and a half (March 2001 - September 2002) 74 cases went 
from docketing to tentative agreements. Those cases were:

with Board mediators as follows: 8 reached tentative agreements in less 
than 2 months; 3 reached tentative agreements in 2-3 months; 15 reached 
tentative agreements in 3-6 months; 28 reached tentative agreements in 
6-12 months; 12 reached tentative agreements in 12-18 months; 8 reached 
tentative agreements in more than 18 months. In all, 54 cases (73%) 
reached tentative agreements in less than one year. The longest case 
(973 days) and the shortest case (1 day) were railroad cases.

[See PDF for image]

[End of figure]

If one looks at the performance of the Board over time, it is clear 
that a large majority of cases come to the Board and reach agreement in 
less than one year, with less than a month and a half at the table in 
face-to-face negotiations with the assistance of a mediator.

It is the exception for cases to take more than a year. As mentioned, 
work done in direct negotiation greatly affects the Board's ability to 
resolve cases quickly. Also, there are many external factors in any 
negotiation that may produce special circumstances.

If the parties cannot reach agreement, even with Board mediation, they 
are offered arbitration, which either party may refuse. The refusal of 
either party triggers a "cooling off" period, at the end of which 
either party may engage in self-help. If the Board determines that a 
work stoppage would cause significant disruption to essential 
transportation services for any section of the country, the Board must 
notify the President, who may choose to appoint a Presidential 
Emergency Board (PEB). PEB's recommend a settlement to the parties, but 
either party may reject the PEB's recommendations, leading to a final 
cooling off period, further preventing self-help for another 30 days. 
Even during cooling off periods and PEB's, the Board may continue 
"public interest" meetings with the parties, often resulting in a 
settled agreement.

During the past three years there have been two Presidential Emergency 
Boards created. In FY 2002, one PEB was created (United/IAM), and the 
parties reached agreement without a strike or lock-out in that case. In 
FY 2001, again only one PEB was created (Northwest/AMFA), and again the 
parties reached agreement without a strike or lock-out, in this case by 
negotiating an agreement with the NMB's assistance before the PEB 
issued its recommendations. There were no PEB's in FY 2000.

There have been five airline Presidential Emergency Boards in the last 
twenty two years. The most recent airline PEB, before the one in FY 
2001, was in 1997 (American Airlines/APA). There was one airline PEB in 
1993 (a special PEB), and one in 1978 (Wein Air Alaska/ALPA).

Over the last three years the Board has helped the parties reach 
tentative contract agreements in a total of 379 mediation and ADR 
cases, with only one instance of self-help.

Since 1997, the Board's mediators have successfully resolved over 600 
cases, with only three instances of self-help involving strikes, work 
stoppages, or lock-outs. One of the three actions lasted for 90 minutes 
before being resolved with assistance from the Board.

The experience of the Board's mediation staff is deep and varied. 
Currently, 7 mediators are from the rail industry and 7 are from the 
airline industry. 6 have a union background, and 8 have a management 
background. 3 are former union presidents. 4 are lawyers.

The combined labor relations/mediation experience of the Board's 
current mediators is 350 years (an average of 25 years each).

The NMB works hard to enable the parties to have productive labor 
negotiations and productive relationships during the term of an 
agreement. The parties come to the bargaining table with varying ideas 
of what is beneficial. Labor wants to preserve an environment in which 
it can maximize its gains, and in which it retains the only basic power 
that it perceives itself to have - the right to withhold labor. Absent 
these elements, most labor representatives would argue that 
negotiations could not be beneficial for their constituents. Management 
comes to the table wanting to preserve an environment in which it can 
control costs and maintain the freedom to manage. Absent these 
elements, management would argue that negotiations could not be 
beneficial. The challenge of all mediation is to balance these 
competing definitions of beneficial and get the parties to what our 
mediators refer to as the "zone of reasonableness.":

From the NMB's point of view, and from the point of view of many 
researchers, there is another important element that contributes to 
mutually beneficial and productive labor negotiations - the 
relationship that is created between the parties when negotiations are 
handled well and in which interests of both parties are addressed. 
Industrial psychologists call it "relational coordination" - addressing 
problems jointly, and using a good relationship to weather bad times 
and allow creativity in problem solving. Mutually beneficial, 
productive negotiations must address the fundamental interests of each 
party, and must contribute to positive relationships among the parties.

The Board continues to move the parties toward the ideal negotiating 
environment in two ways. First, our mediation program acknowledges the 
needs and interests of the parties and does, in the vast majority of 
cases, find the zone of reasonableness. Second, our Alternative Dispute 
Resolution (ADR) program uses an interest-based approach to bargaining 
that helps improve the relationships that are so important to future 
success.

A part of the administrative change the Board undertook after the 1996 
reports was the creation of an ADR program. Under this program, the 
parties have the option of using facilitated discussions, called 
"Interest Based Bargaining," to negotiate contracts in a non-
traditional, cooperative manner. In 1997, there was one IBB case. In 
2002, almost half of the cases handled at the NMB began as IBB cases. 
The trend is that more parties are recognizing the value of the IBB 
process, and that more contracts are being negotiated using IBB.

The IBB program was conceived as a way to intervene early in 
negotiations, starting the parties off in a cooperative negotiating 
environment. The original assumption was that most parties would use 
the IBB process and then move to traditional mediation to resolve some 
of the more difficult contract issues (e.g. 
wages). That has been the norm, but the program has been very 
successful in moving negotiations all the way through to tentative 
agreements without resorting to traditional mediation in cases 
involving both large and small carriers.

The report focused on one dispute in particular that arose during the 
contract, prior to the amendable date, between American Airlines and 
the Allied Pilots Association over American Airlines' purchase of Reno 
Air. As part of its ADR program, the NMB provides not only grievance 
mediation, but also facilitation of mid-contract disputes. It is 
precisely in those types of "nonstrike work actions" that the NMB's ADR 
programs are effective at controlling.

Respectfully Submitted,

Francis J. Duggan 
Chairman:

Signed by Francis J. Duggan: 

[End of section]

Appendix IX :GAO Contacts and Staff Acknowledgments:

GAO Contacts:

JayEtta Z. Hecker (202) 512-2834 Steven C. Martin (202) 512-2834:

Staff Acknowledgments:

In addition to those individuals named above, Jonathan Bachman, Brandon 
Haller, David Hooper, Terence Lam, Dawn Locke, Sara Ann Moessbauer, 
Stan Stenersen, and Stacey Thompson made key contributions to this 
report.


FOOTNOTES

[1] Last offer arbitration is a form of arbitration in which the 
dispute resolution procedure limits an arbitrator to choosing the final 
offer made by one of the parties.

[2] DOT defines a "major" airline as one with annual total operating 
revenues in excess of $1 billion. For purposes of this report, we 
include only those major carriers that were in business as of 2001 for 
which we could obtain data (Alaska, America West, American, 
Continental, Delta, Northwest, Southwest, TWA, United, and US Airways). 
We excluded American Eagle, American Trans Air, cargo, and regional 
airlines, including American Eagle, some of which fit the $1 billion 
criteria, because data for these airlines were not available. 

[3] DOT defines an on-time flight as one that is less than 15 minutes 
after the scheduled gate arrival or gate departure time. 

[4] NMB defines a craft or class as a group of employees seeking 
representation grouped around factors such as their functions, duties, 
responsibilities, and the general nature of the work performed.

[5] This limitation on a union's legal authority to engage in work 
actions or a carrier's legal authority to change work rules is known as 
"maintaining the status quo."

[6] The NMB notifies the President that a potential strike would result 
in a "possible substantial interference with interstate commerce." At 
the President's discretion, a board can be established to investigate 
the dispute between the union and the company and make recommendations 
for settlement. The recommendations are not binding on management or 
labor. These boards are known as PEBs.

[7] While we measured negotiation length from the date the carriers 
reported as the start of negotiations through the ratification/
settlement date, the NMB measures negotiation lengths from when it 
first receives a request for mediation services. While NMB's measure 
accurately reflects the period of time they are involved in 
negotiations, our measure was designed to portray the total period 
involved in negotiations.

[8] See appendix IV for a list of contracts ratified by their amendable 
date.

[9] We were not able to calculate negotiation lengths for all 236 
contracts because key dates were unavailable for 89 contracts: 83 had 
unknown start dates or ratification/settlement dates, and 6 were listed 
as first-time contracts. 

[10] The Regional Airline Association defines code sharing as when one 
airline uses the two-letter designator code of another airline to 
designate its flights, for example, Comair using Delta's designator 
code (DL) to designate one of its flights.

[11] The Federal Aviation Administration (FAA) Aerospace Forecasts 
defines regional airlines as those carriers that provide regularly 
scheduled passenger service and whose fleets are composed primarily of 
aircraft having 60 seats or less.

[12] Jody Gittell, Andrew von Nordenflycht, and Thomas Kochan, "Mutual 
Gains or Zero Sum? Labor Relations and Firm Performance in the Airline 
Industry," Industrial and Labor Relations Review, (forthcoming), and 
James Schultz and Marian Schultz, "Northwest Airlines Strike and Labor 
Negotiations," American Association of Behavior Social Sciences Journal 
2 (1999) 254-.

[13] Industry officials represent airline management, airline interest 
groups and/or industry sponsored research organizations. Labor-
management experts include academics who study airline labor relations, 
authors of studies regarding labor relations in the airline industry 
and lawyers practicing airline industry labor and employment law.

[14] Jody Gittel, Andrew von Nordenflycht, and Thomas Kochan, "Mutual 
Gains or Zero Sum? Labor Relations and Firm Performance in the Airline 
Industry," Industrial and Labor Relations Review, (forthcoming).

[15] See appendix V for a description of airline strikes that have 
occurred since deregulation. 

[16] For purposes of this report, we define court-recognized, nonstrike 
work actions as any labor actions, other than a strike, performed 
outside of the self-help period and judged necessary by a court of law 
to warrant a temporary restraining order (TRO) or an injunction. See 
appendix VI for details on each of these nonstrike work actions. 

[17] In the most recent airline strike--the 89-day strike at Delta 
Connection carrier Comair in 2001--NMB regarded the impact as not 
significant enough to warrant a presidential intervention, as they did 
not believe the strike would substantially threaten to interrupt 
interstate commerce to such a degree as to deprive any section of the 
country essential transportation service. (The Comair strike was not 
included in the list of strikes as it is not a major carrier. See 
appendix II for additional limitations to the scope of this report.)

[18] The President can take various measures short of a PEB to put 
pressure on the parties to settle. Such measures include sending a 
presidential representative to meet with the parties. For example, in 
the ALPA pilots' negotiation with Northwest in 1998, the President sent 
his Senior Counsel and Transportation Secretary to meet with the 
federal mediator to help the parties resolve their differences. The 
President can also publicly announce his readiness to empanel a PEB. 
For example, during the 2001 APFA negotiations with American, the 
Transportation Secretary announced publicly that the President would 
use all tools necessary to ensure there was no disruption in service. 
See appendix VII for a list of presidential interventions.

[19] Slowdowns are an organized effort by workers to decrease 
production in order to pressure the employer to take some desired 
action. Slowdowns can include refusing to work overtime, sickouts, and 
work-to-rule. A union official shared that, typically, minor FAA rules 
that do not concern safety may be overlooked in order to maintain 
flight schedules. According to two labor-management experts, during a 
work-to-rule action, airline labor strictly follows such minor rules in 
order to slow the flight schedule. For example, pilots may refuse to 
fly a plane if a tray table does not stay in the upright position.

[20] According to an International Brotherhood of Teamsters (IBT) union 
official, unions do not participate in nonstrike work actions, although 
some might admit to performing work-to-rule actions to put pressure on 
the carriers. The union official also stated that individual employees 
have taken actions into their own hands. For example, IBT reported that 
individual employees promoted a Northwest flight attendant sickout in 
2000 by using the Internet. After IBT leadership accessed the Web site, 
they told their members and the airlines that the union was not in 
favor of the members' actions. In separate actions, the Seventh and 
Eleventh Circuit Courts of Appeal, ruling on behalf of United and 
Delta, respectively, declared that unions are responsible for 
controlling labor actions. Specifically, the Eleventh Circuit Court of 
Appeals held that, when Delta's pilots engaged in concerted activity in 
violation of the RLA, "ALPA…ha[d] a duty to end…unlawful action" by its 
members. According to the court, that duty is not met by mere 
statements of policy and exhortations to refrain from unlawful 
activity, but must be backed with action, including union-imposed 
sanctions (Airline Management Publication).

[21] See, for example, "United Pilots' Slow Taxiing Causes Delays at 
O'Hare," Chicago O'Hare Air Traffic Control, TheTracon.com, July 26, 
2000, http://www.thetracon.com/news/times072600.htm, or "United 
Airlines Scraps Nearly 2,000 Flights," CNN.com, August 8, 2000, http:/
/www.cnn.com/2000/TRAVEL/NEWS/08/08/united.cancellations.ap. 

[22] We found studies published by Wilbur Smith Associates, Wisconsin 
Department of Transportation, and the University of Cincinnati that 
reported on the total economic impact of aviation on the United States, 
the state of Wisconsin, and the greater Cincinnati/Northern Kentucky 
region. None examined any strike impacts. 

[23] In the above example, one should not equate a strike against Delta 
with a 10 percent reduction in Texas' aviation benefits. Aviation 
benefits stem from other aviation related activity such as general and 
military aviation as well as scheduled airline service. Also, one would 
have to assume that all airline flights in Texas were completely filled 
with paying passengers so none of Delta's 10 percent of Texas fliers 
could be accommodated by other airlines. 

[24] The one exception (Melbourne, Florida) also had one-stop service 
to Cincinnati, but not from a competing airline. Melbourne passengers 
could still have one-stop service to Cincinnati from a combination of 
another Delta regional carrier (to Atlanta) and then a Delta mainline 
flight to Cincinnati. 

[25] CHAOS, as practiced by the Alaska flight attendants, was found by 
the federal courts to be a legal form of self-help and not an illegal 
work action. The Alaska flight attendants did not engage in this 
activity until after release by the NMB and the 30-day cooling-off 
period.

[26] DOT defines an on-time flight as one that is less than 15 minutes 
after the scheduled gate arrival or gate departure time. 

[27] Flight problem complaints include complaints regarding 
cancellations, delays, or any other deviations from the schedule, 
whether planned or unplanned.

[28] As a measure of adverse impact on passengers, we analyzed the 
number of on-time arrivals in relationship to the length of contract 
negotiations. The correlation between these two items was -.25.

[29] These 23 pilot contracts were chosen because they had the most 
complete information, including amendable dates and ratification dates. 
Concessionary agreements ratified before the amendable date, first time 
pilot contracts, or pilot contracts with missing information were not 
used in this analysis.

[30] The judge fined the American pilots' union, the Allied Pilots 
Association, $45.5 million for contempt.

[31] AirTran operates more flights than Continental at Atlanta 
Hartsfield International Airport. However, because DOT does not 
classify AirTran as a major airline, we compared Delta's operations 
with Continental.

[32] American completed its purchase of TWA in April 2001, and TWA no 
longer exists as a separate entity. Analysis of activity from 
deregulation through April 2001 is included in this report.

[33] P.L. No. 257, 69th Cong., 1st Sess., 44 Stat. 577 (1926). 

[34] 45 U.S.C. § 181. 

[35] 45 U.S.C. § 152. 

[36] Chicago & North Western Ry. v. UTU, 402 U.S. 570, 574 (1971).

[37] 45 U.S.C. §§ 155, 156, and 160. 

[38] 45 U.S.C. § 152.

[39] 45 U.S.C. § 145.

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