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AirTran Airways’s success may be the result of dogged persistence, shrewd decision-making, and clever lawyering. But timing has played a big role as well, especially in being able to strike management-friendly deals with labor unions weakened by the slump in travel during the recession. Just a few decades ago, during the era of regulation, unions had the power. Pilots, flight attendants, and baggage handlers at the Uniteds and Deltas extracted favorable deals from management, largely because the airlines could pass along higher costs in the form of government-fixed ticket prices. Even after Congress deregulated the industry in 1978, strong unions built upon their generous contracts. And during the 1990s economic boom, airline unions extracted even more concessions from management, such as guaranteed pensions, a reduction in working hours, and pilot salaries in the low-to-mid six-figure range. But by late 2000, just as AirTran’s CEO Joseph Leonard was assembling his management team, the major airlines had begun to lay workers off. Suddenly, low-cost carriers like AirTran, JetBlue, and Spirit Air could hire workers without paying the majors’ bloated wages. (Since 9/11, however, hard-pressed carriers like United, American, and US Airways have all extracted wage concessions from their unions.) AirTran’s latest deal with its pilots shows how far the balance of power has shifted to management at the budget carriers. Under the terms of that contract, pilots receive lower wages than their counterparts at the major carriers, get 401(k) plans instead of guaranteed pensions, and are required to work much harder than their counterparts at Delta, in some instances up to twice as many hours a month. But they’re not complaining. “Most of our pilots are very happy at AirTran,” says Sean Sullivan, the president of the union that represents AirTran’s pilots. Other low-cost carriers also have a high degree of labor flexibility. At Spirit Air, pilots don’t get big salary boosts if they fly over a certain number of hours a month, as they do at many majors. At Frontier, only the pilots are unionized. JetBlue doesn’t have to contend with any unions whatsoever. And at Southwest, the granddaddy of the low-cost industry, its unionized flight attendants work longer hours than is the norm elsewhere. If the low-cost carriers continue to grow and the labor pool tightens, their easy ride could end. Already, there are signs of employee discontent. Last summer, after AirTran management forged a groundbreaking deal with its flight attendants, the rank and file shot it down. Jon Edenfield, the head of the flight attendants’ union, called the rejection “very frustrating.” But that’s down the runway. Says Stuart Klaskin, a partner at Miami-based KKC Aviation Consulting, “There’s really no impetus for AirTran to play hardball with its unions [now].”

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