• SPASM - The Two Dollar Cure
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SPASM - The Two Dollar Cure

Clearly, the airline industry is in a quandary. Fuel, an airline’s number one expense, continues to eat away at the bottom line as the price of oil rises. Neither the Company nor the Union can, or should, ignore the impact of oil prices on the industry.

We both agree there is a problem, but we disagree on the cure. There is a cure to the problem. This is the only business that I know of that does not charge a price that covers the cost of the product.

Prices at our local grocery stores have risen. A landlord does not charge a rent that is less than the cost of the landlord’s mortgage. Utility companies have raised prices to cover their energy costs. It is called economics. If an enterprise does not recoup the cost of producing its product, the enterprise fails.

Every single airline in the country, with the exception of Southwest Airlines, is headed toward bankruptcy or outright liquidation because they refuse to charge what it costs to fly someone through the air at 500 mph in a machine that consumes fuel at a very high rate. The machines look pretty and sleek and are indeed a marvel of technology. However, the machines aren’t a guarantee of unfettered cheap mass transportation. The industry is losing money at a rate faster than the airplanes they operate, yet the airlines won’t raise their fares until they slash and burn jobs, employee income and morale. Turning to their employees for salvation is on page one of the airline managers’ playbook.

By now the American flying public knows that higher fares are on the horizon as the industry will shrink capacity, either by grounding aircraft or by outright airline failures.  The flying public also knows that in the meantime airlines have resorted to a nickel and dime approach to increase revenue. Charges for checked baggage, "choice" seats, and frequent flyer award tickets are among the many fees airlines are passing on to customers in an effort to lose less money.

US Airways has decided to blaze a trail and begin charging for non-alcoholic beverages on August 1. The only major airline to take the fee for service scheme to this nonsensical level is US Airways. The only major airline to decide to sell non-alcoholic beverages onboard their flights without testing, without a real plan and without a thorough review of the possible consequences, is US Airways.

In a meeting with Union leaders last week, management admitted there were no detailed procedures for Flight Attendants to use other than a decision to serve and sell beverages on flights under 224 nautical miles off of trays and serve and sell beverages on flights in excess of that figure from reconfigured beverage service carts. It will be up to the "good judgment" of Flight Attendants to determine if a medical condition such as air sickness or low blood sugar would warrant a passenger to be awarded a beverage free of charge.

What has been developed however is a fancy new form for accounting for the "anticipated" 20 to 30 million dollar revenue increase produced from the onboard sales. The revenue figure has fluctuated many times since the decision was made to sell beverages onboard flights.

Please don’t get me wrong- 20 million dollars is a lot of money to almost anyone. In an airline economy, 20 million dollars is not a lot of money when an airline is trying to offset a 1.9 billion dollar fuel bill. That is where the debate between the Company and the Union begins.

In what are known as "Focus Groups", management engages line Flight Attendants in meetings to "solicit" the opinions of the Flight Attendants who sign up for the meetings. The Company pays 5 hours of pay and credit for the meetings as well as for a day of travel if necessary. Space positive transportation and expenses are also included.

During the most recent focus group meeting, Vice President of Inflight, Sherri Shamblin, told the attendees the 30 million dollars anticipated from the sale of beverages would be equivalent to 750 Flight Attendant jobs. The implication being that without the sale of beverages, 750 Flight Attendant jobs could go away. The Company has already planned furloughs for both East and West Flight Attendants and has even planned to recall those furloughed this fall in the spring of 2009. There is no contemplation of increasing the planned furloughs-so the remark by Ms. Shamblin is questionable at best.

Simple addition will indicate that charging for additional services will increase revenue. The Company claims that added all together the additional fees will increase revenue by approximately 300 million dollars. Simple minds will also tell you that charging for beverages won’t cause problems for Flight Attendants and passengers. The fact is the problems are going to be numerous and severe. Passenger outrage will be genuine. Flight Attendants will be defenseless. No amount of explaining, sympathizing or placating will be enough to quell passenger complaints. Flight Attendants have been told to use their "best judgment" in dealing with the complaints and logistical problems. Federal Air Regulations (FAR) require that Flight Attendants properly prepare the cabin for landing. The following FAR will force Flight Attendants to collect a purchased beverage from passengers prior to landing:

(a) No certificate holder may move an airplane on the surface, take off, or land when any food, beverage, or tableware furnished by the certificate holder is located at any passenger seat.

(e) Each passenger shall comply with instructions given by a crewmember with regard to compliance with this section.

The Association of Flight Attendants does not believe that setting our members up for confrontation in the air is proper yet the Company is doing exactly that. We believe that not only are passengers going to be dissatisfied with the airline but potentially dissatisfied with US Airways beverage supplier-the Coca Cola Company. Former West MEC President, Gary Richardson and I sent the following letter to Coca Cola executives:

June 30, 2008

Mr. Mutar Kent
President and Chief Executive Officer
The Coca Cola Company
PO BOX 1734
Atlanta, Georgia 30301
 

Dear Mr. Kent,

My name is Mike Flores and I am the Master Executive Council President of the US Airways chapter of the Association of Flight Attendants. Mr. Gary Richardson is the Master Executive Council President of the America West Chapter of the Association of Flight Attendants. Together Mr. Richardson and I represent over 7,000 Flight Attendants at the combined airline and we are writing you out of concern regarding US Airways’ decision to sell soft drinks onboard the aircraft during flight beginning on August 1, 2008.

As you know, US Airways and America West Airlines merged in 2005 and made the decision to offer Coca Cola products system wide shortly after the merger was consummated. Previously America West had offered Pepsi products.

The current fuel "crisis" is taking its toll on the airline industry. Rather than charge a fare that is commensurate with the cost of producing their product, airlines have seized on an a la carte pricing scheme to help offset the high cost of fuel. Most major airlines are now, or will soon be, charging for checked baggage, non-internet reservations and aisle seats. This has already begun to anger the flying public.

US Airways management is taking this one step further by deciding to charge $2.00 for non-alcoholic beverages, including Coca Cola products, and even water. Mr. Richardson and I believe this will lead to great discord among our passengers. The likely consequences will be to put our Flight Attendants and your product squarely in the path of a great deal of very angry customers.

Loyalty is everything in your business and ours. We believe this scheme will drive people away from both of our products.

Major airlines generally act like sheep and copy each others’ fares and fees almost immediately. To date, no other major airline has announced plans to sell soft drinks, but if this persists at US Airways it will inevitably spread to other airlines. Your products could wind up in the midst of an industry-wide consumer debacle. 

Flight Attendants take great pride in their jobs as federally licensed safety professionals on the front lines of airline service.  Through our current onboard service, we promote our airline on every flight we fly and, indirectly, we promote your products.

We do not believe US Airways' decision is good for our Flight Attendants, our customers or the Coca Cola Company and we hope you will share this concern. If you do share our concerns we hope you will contact US Airways, Chairman and CEO Doug Parker, expressing your position.

Sincerely,

Mike Flores, President
US Airways Master Executive Council
AFA-CWA

Gary Richardson
The America West Master Executive Council
AFA-CWA

The airline industry employs several methods to measure their performance. Among those measures are Cost per Available Seat Mile (CASM) and Revenue per Available Seat Mile (RASM). Obviously, the idea is to have a low CASM and a high RASM.

By extending the fee for service scheme to the sale of non-alcoholic beverages the airline is asking for trouble. Perhaps there will be a new performance measure-the SPASM- the Senseless decision making per Available Seat Mile.

Thank you,

Mike Flores, President
The US Airways Master Executive Council
AFA-CWA

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AFA Local Numbers
 
Council 41 DCA 703-212-8090
Council 69 BOS 781-289-8454
Council 70 PHL 215-492-0840
Council 82 LGA 315-736-3483
Council 89 CLT 704-527-0325

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