- Feb 10, 2011
- 1,647
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Reporter dives into USAPA's dues collecting and spending compared to other unions. This is a portion of the first article with more to come.
Pilot Unions, Money, and More
When US Airways recently conducted its 2011 Media Day Event, "Unplugged" in
Tempe, the US Airways Pilot Association (USAPA) did not let the opportunity
go by without issuing a press release accusing management of being complicit
in a recent incident in which a former America West (and current US Airways)
pilot reportedly accessed and then downloaded information from a company
database of pilot information.
The pilot(s) involved were sympathetic to Leonidas, a group of former
America West pilots. Leonidas apparently used the mailing addresses included
in the data dump to send out letters last fall promoting their side of the
US Airways West/US Airways East ongoing seniority fight.
This would have been bad enough, but apparently the database had social
security numbers, and other personal information embedded in it as well.
As a result, this incident has now provided USAPA union management (whose
allegiance is firmly rooted in the old US Airways East group) with a pretty
big stick to wave around, and the union leadership has gone so far as to
suggest that the breach was a matter of national security, necessitating an
FBI investigation.
While ordinarily I would have concentrated on the obvious question of what
this means for the future of any meaningful attempts to unite the
dysfunctional pilot union at US Airways -- we know that answer. Nothing
remotely positive.
Or, I might have devoted my attention to the status of the legal fight
between the former America West pilots and the US Airways East pilots, with
both sides now awaiting the determination of an appeal to the 9th Circuit
Court of Appeals. No matter what the decision is, of course, there will be
more legal maneuvering by one side or the other. But, on this occasion my
mind was focused -- as I was sitting in the middle of a financial
presentation -- on revenues and costs.
I wondered, "So how much in legal fees is this latest incident going to cost
USAPA members? How much money did the union take in last year anyway? How
many former America West pilots aren't even paying dues?"
Reflecting on all of this, as I sat in Tempe, and watched US Airways CEO
Doug Parker during a question and answer session try to answer a question
about this issue in 2 minutes or less -- a completely impossible task, given
the long drawn-out ugly story here -- it occurred to me that we know so much
about the airlines and their financial condition, but very little about the
unions that represent the employees who work for the airlines.
So this week we decided it was time to take a little stroll through the
federally-mandated annual reports currently on file for each of the four
major airline pilot unions and see what we could see.
And what we saw will probably keep us busy for a long time. All we did this
week was skim the surface.
For those who would like to follow along, the information this week comes
from the LM-2 reports that each union is required to file with the U.S.
Department of Labor.
For this week, we took the reports from the four largest pilot unions -- Air
Line Pilots Association, Allied Pilots Association, Southwest Airlines Pilot
Association, and the US Airways Pilot Association -- and looked at a couple
of key metrics.
Because I had become transfixed on the subject of legal fees and how much
USAPA has paid out in such fees over the last year, we looked at the line
item called "representational activity". This is where expenses related to
consulting, legal fees, PR firms, etc. are listed. This line item does not
include lobbying or political activity. That is a separate line item that we
will take a look at in the future.
We looked at these numbers in terms of both cost as a percentage of total
receipts and cost per member. A note here. "Total receipts" includes other
items besides dues.
Finally, we took a look at how much was received in dues and agency fees.
Per member. In other words, when you take all the dues that were collected
by a particular union, how much, on average, did each member contribute to
the union's coffers?
In follow-up reports to this one, we'll take a much closer look at some of
those expenses that show up on the representational activities line, and
we'll also look at what percentage each union spends on overhead,
administration, benefits, and political activities.
Yes, this is going to be a gift that keeps on giving.
But for this week -- just a small peek.
First, in terms of sheer revenues, the union groups stacked up thusly from
largest to smallest: ALPA, APA, SWAPA and USAPA.
Here's our teaser question for the week. Which union has more net assets per
member than the others? We'll answer that in our next chapter of "Pilot
Unions, Money and More." After this quarter's earnings releases have been
digested, dissected, and rolled out.
Back to this week.
In this first chart, we see a breakdown of the representational costs, as
reported by each union, as a % of that union's total receipts. To simply
list which union had the highest representational costs would be very
misleading, as ALPA's member base is so much larger that its expenses for
this line item are tremendously greater than the other three combined.
However, when we look at the amounts paid, as a percentage of total
receipts, I think we have an even playing field upon which to make our
evaluations.
As you can see in the chart above, USAPA does indeed spend almost 40%
(38.2%) of all of its receipts on representational activities. A cursory
look at the union's line by line accounting confirms that the bulk of this
is legal-related expenses. SWAPA comes in second with 33.4%, while ALPA is
third with 28.2%.
Then there is the Allied Pilots Association. You'd think from looking at
this chart that the pilots at American Airlines were the happiest campers in
the world. Furthermore, they don't appear to need a lot of consultants
telling them what to do. APA spent only 8.1% of its annual receipts on
representational activities in 2010.
Looking at these expenditures from a slightly different perpective, how do
these totals stack up, in terms of per member cost? How much per member is
each of the four unions paying for those consultants, those advisors -- and
most importantly, those lawyers?
Once again USAPA easily leads the pack, spending over $1100 per member on
representational activity. $1151 to be exact.
ALPA and SWAPA reverse positions from the previous metric with second-place
ALPA spending almost $900 per member while third-place SWAPA spends a bit
more than $600. Once again, APA brings up the rear, with spending in this
category of only $390 per member.
Finally, I thought we'd look at just how much money per member each union
took in, as per their 2010 report.
It's a virtual dead heat between ALPA and SWAPA on the bottom end, with APA
union members contributing a bit more per member. But again, the pilots at
US Airways are sitting at the wrong end of the graph, as their union took in
approximatly $2520 per member, according to its 2010 report.
But this is not because pilots at US Airways are paying more in dues as a
percentage of their pay than pilots at ALPA.
According to the reports filed for each union, ALPA and USAPA take 1.95%
from each member for dues; APA takes 1.5%; while SWAPA's dues are only 1% of
pilot pay.
I believe the difference between ALPA's 1712 number and USAPA's 2520 number
is merely a reflection that ALPA represents a lot of regional airline pilots
whose salary levels, on average, are lower than that of the USAPA pilot
group.
Another factoid I noted when looking at these filings: ALPA reported it had
60,301 members; APA listed 8,439; SWAPA claimed 5,862; while USAPA claimed
only 4,242.
However, on the USAPA website the union says that it represents "5200
mainline pilots." And yes, between the two groups of pilots there should be
about 5200 pilots total.
Pilot Unions, Money, and More
When US Airways recently conducted its 2011 Media Day Event, "Unplugged" in
Tempe, the US Airways Pilot Association (USAPA) did not let the opportunity
go by without issuing a press release accusing management of being complicit
in a recent incident in which a former America West (and current US Airways)
pilot reportedly accessed and then downloaded information from a company
database of pilot information.
The pilot(s) involved were sympathetic to Leonidas, a group of former
America West pilots. Leonidas apparently used the mailing addresses included
in the data dump to send out letters last fall promoting their side of the
US Airways West/US Airways East ongoing seniority fight.
This would have been bad enough, but apparently the database had social
security numbers, and other personal information embedded in it as well.
As a result, this incident has now provided USAPA union management (whose
allegiance is firmly rooted in the old US Airways East group) with a pretty
big stick to wave around, and the union leadership has gone so far as to
suggest that the breach was a matter of national security, necessitating an
FBI investigation.
While ordinarily I would have concentrated on the obvious question of what
this means for the future of any meaningful attempts to unite the
dysfunctional pilot union at US Airways -- we know that answer. Nothing
remotely positive.
Or, I might have devoted my attention to the status of the legal fight
between the former America West pilots and the US Airways East pilots, with
both sides now awaiting the determination of an appeal to the 9th Circuit
Court of Appeals. No matter what the decision is, of course, there will be
more legal maneuvering by one side or the other. But, on this occasion my
mind was focused -- as I was sitting in the middle of a financial
presentation -- on revenues and costs.
I wondered, "So how much in legal fees is this latest incident going to cost
USAPA members? How much money did the union take in last year anyway? How
many former America West pilots aren't even paying dues?"
Reflecting on all of this, as I sat in Tempe, and watched US Airways CEO
Doug Parker during a question and answer session try to answer a question
about this issue in 2 minutes or less -- a completely impossible task, given
the long drawn-out ugly story here -- it occurred to me that we know so much
about the airlines and their financial condition, but very little about the
unions that represent the employees who work for the airlines.
So this week we decided it was time to take a little stroll through the
federally-mandated annual reports currently on file for each of the four
major airline pilot unions and see what we could see.
And what we saw will probably keep us busy for a long time. All we did this
week was skim the surface.
For those who would like to follow along, the information this week comes
from the LM-2 reports that each union is required to file with the U.S.
Department of Labor.
For this week, we took the reports from the four largest pilot unions -- Air
Line Pilots Association, Allied Pilots Association, Southwest Airlines Pilot
Association, and the US Airways Pilot Association -- and looked at a couple
of key metrics.
Because I had become transfixed on the subject of legal fees and how much
USAPA has paid out in such fees over the last year, we looked at the line
item called "representational activity". This is where expenses related to
consulting, legal fees, PR firms, etc. are listed. This line item does not
include lobbying or political activity. That is a separate line item that we
will take a look at in the future.
We looked at these numbers in terms of both cost as a percentage of total
receipts and cost per member. A note here. "Total receipts" includes other
items besides dues.
Finally, we took a look at how much was received in dues and agency fees.
Per member. In other words, when you take all the dues that were collected
by a particular union, how much, on average, did each member contribute to
the union's coffers?
In follow-up reports to this one, we'll take a much closer look at some of
those expenses that show up on the representational activities line, and
we'll also look at what percentage each union spends on overhead,
administration, benefits, and political activities.
Yes, this is going to be a gift that keeps on giving.
But for this week -- just a small peek.
First, in terms of sheer revenues, the union groups stacked up thusly from
largest to smallest: ALPA, APA, SWAPA and USAPA.
Here's our teaser question for the week. Which union has more net assets per
member than the others? We'll answer that in our next chapter of "Pilot
Unions, Money and More." After this quarter's earnings releases have been
digested, dissected, and rolled out.
Back to this week.
In this first chart, we see a breakdown of the representational costs, as
reported by each union, as a % of that union's total receipts. To simply
list which union had the highest representational costs would be very
misleading, as ALPA's member base is so much larger that its expenses for
this line item are tremendously greater than the other three combined.
However, when we look at the amounts paid, as a percentage of total
receipts, I think we have an even playing field upon which to make our
evaluations.
As you can see in the chart above, USAPA does indeed spend almost 40%
(38.2%) of all of its receipts on representational activities. A cursory
look at the union's line by line accounting confirms that the bulk of this
is legal-related expenses. SWAPA comes in second with 33.4%, while ALPA is
third with 28.2%.
Then there is the Allied Pilots Association. You'd think from looking at
this chart that the pilots at American Airlines were the happiest campers in
the world. Furthermore, they don't appear to need a lot of consultants
telling them what to do. APA spent only 8.1% of its annual receipts on
representational activities in 2010.
Looking at these expenditures from a slightly different perpective, how do
these totals stack up, in terms of per member cost? How much per member is
each of the four unions paying for those consultants, those advisors -- and
most importantly, those lawyers?
Once again USAPA easily leads the pack, spending over $1100 per member on
representational activity. $1151 to be exact.
ALPA and SWAPA reverse positions from the previous metric with second-place
ALPA spending almost $900 per member while third-place SWAPA spends a bit
more than $600. Once again, APA brings up the rear, with spending in this
category of only $390 per member.
Finally, I thought we'd look at just how much money per member each union
took in, as per their 2010 report.
It's a virtual dead heat between ALPA and SWAPA on the bottom end, with APA
union members contributing a bit more per member. But again, the pilots at
US Airways are sitting at the wrong end of the graph, as their union took in
approximatly $2520 per member, according to its 2010 report.
But this is not because pilots at US Airways are paying more in dues as a
percentage of their pay than pilots at ALPA.
According to the reports filed for each union, ALPA and USAPA take 1.95%
from each member for dues; APA takes 1.5%; while SWAPA's dues are only 1% of
pilot pay.
I believe the difference between ALPA's 1712 number and USAPA's 2520 number
is merely a reflection that ALPA represents a lot of regional airline pilots
whose salary levels, on average, are lower than that of the USAPA pilot
group.
Another factoid I noted when looking at these filings: ALPA reported it had
60,301 members; APA listed 8,439; SWAPA claimed 5,862; while USAPA claimed
only 4,242.
However, on the USAPA website the union says that it represents "5200
mainline pilots." And yes, between the two groups of pilots there should be
about 5200 pilots total.
