aside DELTA AND ALASKA AIRLINES IN BATTLE OVER SEATTLE’S MARKET SHARE

airlines delta great pix146806_seatacexpands17535-1020x523

Delta is maneuvering to have greater access at the (Sea-Tac) Seattle-Tacoma Airport. This is the hub of Alaska Airlines, the #1 rated major airline for 8 years in a row, according to the 2015 JD Power report. You would think that the Seattle community would be more protective of their top rated airline in retaining their preeminence in this very desirable area. It is at a super location to launch flights to Hawaii, China, Japan and other international destinations.

Dear Businesses, this is a case study of why it pays not to treat long time, hard working, loyal employees who are part of your community, like a commodity to be cavalierly disposed of, in order to increase your bottom line. If you are still wondering why so many Americans are demonstrating how angry they are during this 2016 election season, you need to read this.

Alaska Airlines 737 departing Sea-Tac 25 July 2005

People in the Seattle community still remember the year, 2005 when Alaska Airlines gave the pink slip to about 500 ramp workers to replace them with contract employees at a much lower cost. This practice has been duplicated by numerous U.S companies in a race to increase their bottom line. These executives forget that being a company in a community also means being a good citizen. It is not good, sound management to successfully improve the bottom line at the expense of not appreciating your front line workers and your clients input to your bottom line. Excellence in management means balancing well these important competing interests while increasing revenues.

Here is the rest of the story as portrayed by Mary Kay Henry in her 5/13/15 Huff Post Business blog, titled, “Remembering the Lockout: Valarie Long on How Alaska Airlines Can Do Better for Communities.”

“Ten years ago today, Alaska Airlines ramp workers were removed from their jobs at Seattle-Tacoma International Airport (Sea-Tac) and replaced by workers employed by an outside contractor — a moment remembered in a recent open letter from SEIU to the airline’s shareholder.”         

airlines sea tac 21725533_Still

“On this, the tenth anniversary of an event that disrupted so many lives, (Service Employees International Union) SEIU International Executive Vice President Valarie Long shares her thoughts:”

“Last week, Alaska Airlines executives and shareholders met at the airlines annual meeting to look back at a year of record-breaking profits. Today, Alaska’s former ramp workers such as Chris Ford are marking another occasion.”

“In the early morning hours of May 13, 2005, Alaska Airlines ramp workers were escorted off the tarmac at Sea-Tac, replaced by workers for a contractor that had slashed hourly wages.”

“The move eliminated roughly 500 positions, displacing employees, some of whom had been working for the company for more than two decades.”

Sea-Tac Airport
Sea-Tac Airport

“Alaska said at the time the decision was made as a cost-saving measure in response to rising fuel costs and competition from low-cost carriers. But it was workers such as Ford who paid the price.”

“Ford had worked for Alaska Airlines for 23 years prior to the lockout. He was a single dad to two young boys when Alaska Airlines fired him. Just two years earlier, then-CEO Bill Ayers called Ford an “unsung hero” in the airline’s inflight magazine for lifting up to 20,000 pounds of cargo, including frozen fish, per day. “Most people didn’t complain. We were making a living wage, we had benefits, it was a great job,” said Ford who felt “betrayed” by the mass lockout 10 years ago.”

“His co-worker Travis Stanley and his wife were expecting their third child when Alaska Airlines fired its Sea-Tac ramp workers. Stanley and his family ran out of money and moved in with his mother. “It was embarrassing,” said Stanley. “Especially being a grown-up, I’d made it so far for so long … not being self-sufficient, that’s the lowest point.”

airlines sea_ext_logo

“While Ford and Stanley fought their way back onto their feet following the lockout, many of those workers continue to struggle and the effects of Alaska’s decision to outsource are still being felt in the region.”

“A memorandum released last week by San Francisco-based BAE Urban Economics estimates that lost wages and the resulting decline in economic activity from reduced household spending have cost King County, Wash., more than $115 million.”

“Alaska’s decision is a window to a much larger trend: a relentless focus on cost-cutting by the aviation industry has damaged worker living standards and the economies of local communities these airlines serve across the nation. Airport jobs used to be good jobs. But many already lucrative airlines have chosen outsourcing to drive down wages and further boost profits. As airlines have encouraged contractors to compete on the basis of wages, pay for many jobs has dropped by as much as 45 percent in real terms. Today, more than 1 in 3 cleaners and baggage workers at airports live in or near poverty.”

airlines20080727SeaTacPlane

“Like their counterparts at McDonald’s, airport workers rely on public assistance at higher rates than workers in other industries. A full 13 percent of cleaners and baggage handlers qualify for health insurance through a public program and 15 percent report receiving food stamps.”

“After Alaska’s decision to outsource its ramp operations at Sea-Tac, wages for its contract ramp workers hovered close to minimum wage for years–until workers started organizing a union in 2013.”

‘That same year, workers at Sea-Tac helped spark the Fight for $15 movement. Workers and community supporters successfully passed a local referendum to raise Sea-Tac’s minimum wage to $15 an hour.”

“Although inspiring raises elsewhere, Alaska Airlines, Airlines for America (an industry association upon whose board Alaska Airlines CEO Brad Tilden sits) and other major carriers have sued to block efforts by both Sea-Tac voters and the port authority to raise airport worker wages.”

airlines seattle rotator-prime-F

“Alaska and the other major airlines’ fight against $15 at Sea-Tac holds back more than just Alaska’s own contract workforce. Thanks to Alaska’s and other airlines efforts to block a $15 airport minimum wage approved by voters last year, Sea-Tac workers lost an estimated $16.5 million in higher wages–money that could have helped fuel the local economy and helped support workers’ families.”

“It’s a similar story for airport workers in Portland, Ore. Alaska Airlines leads the Portland Airlines Consortium, which hires other companies to provide cleaning and passenger wheelchair services to many airlines that operate at the airport. Janitors who keep PDX clean make as little as $11 per hour. Wheelchair assistants employed by Huntleigh USA most often make the minimum wage, with no raises unless the state minimum increases.”

“When I started, the pay was minimum wage and after eight years. I am still making the minimum wage,” said Kasil Kapriel, a Huntleigh USA employee, in testimony before the Port of Portland Board of Commissioners. “Every day, I give all of my effort at work, but there is no path for getting the raises or benefits that we deserve. There is no such thing as a raise or promotion here at my job. I am a single mother and right now it is very tough for me to get by.”

“Alaska can do better for workers, the communities it serves and its shareholders.”

Alaska Airlines has 4 Disney planes
Alaska Airlines has 4 Disney planes

“Over the past decade, the airline has made $2 billion in net profit. Despite its strong financial performance, Alaska is feeling significant pressure from its fierce competition with Delta Airlines for dominance in Seattle and other West Coast markets, as Delta strives to make Seattle its primary West Coast hub and its gateway to Asia.”

“Alaska Airlines has responded by staking a claim on being Seattle’s hometown airline; investing heavily in marketing campaigns to support that image and “defend its position as the carrier of choice in the Pacific Northwest.” In the process, the airline has called on local stakeholders to subsidize its Sea-Tac terminal development projects while opposing those of other airlines that help bring business to the Seattle region.”

Alaska Airlines partner, Cathay Airlines
Alaska Airlines partner, Cathay Airlines

“At the shareholders meeting last week, former Alaska ramp worker Alex Hoopes told the airlines CEO Brad Tilden that “I used to have a middle-class job making $21 an hour working for this company. Today, I do the same work and I’m paid less than half of what I used to be paid. I struggled to make mortgage payments … to pay for groceries.” Hoopes went on to ask, “Can you explain to me how a company that values cost savings above loyalty and hardworking men and women makes Alaska a hometown airline?”

“Alex Hoopes and his co-workers  are still waiting for that answer.”

5 comments

  1. Before I read your post I used to like Alaska Airline but do not now. I lived in the Puget Sound area (directly.across from Seattle) for 5 years have my BA from Washington State University and my MEd from Central Washington State University and lived in Central and Eastern Washington for 8 years so have a vested interest in Seattle. The business practices of Alaska Airlines shows a disrespect for all Washingtonians especially Seattleites.

    • It was a disappointment to read this story. But you know, they are not alone in looking at increasing their bottom line figures to please the shareholders, Wall Street, investors, while these executives line their pockets with pay raises and bonuses at the expense of valuing their frontline employees and their clients.

      Their past actions are now costing them the loyalty of their community. I have been an admirer of Seattle as an area to live. You definitely know the area and the Universities. I envy you.

      • There is a cost for greed. To live in Seattle now $15.oo per hour has a lot less buying power than it does in other parts of the country especially in Central Georgia where I live now.

        • I can’t conceive how workers can get by with an income of less tan $15.00 per hr. especially in a city with a higher cost of living reputation. I am contending that this greed at the expense of the worker is partly the reason so many Americans are expressing their anger. When you adjust for inflation, the average worker is earning less than 25 years ago. The costs of their children attending college to better themselves has skyrocketed….

        • You are spot on! But don’t forget the cost of health care and pharmaceuticals making huge increases that many can’t afford even when they have insurance.

Comments are closed.