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IAM Local Lodge 1635
International Association of Machinists and Aerospace Workers

Local Lodge 1635


Machinist Identify Causes for Dismal State of Airline Industry
The largest airline union in the U.S. told a Senate hearing that failed business plans, the lack of any self-regulation and an addiction to employee concessions are keeping the industry in a permanent state of crisis.

"The financial condition of the airline industry is clearly miserable, and without dramatic changes, the future continues to look bleak," said Robert Roach, Jr., General Vice President of Transportation for the International Association of Machinists and Aerospace Workers (IAM) today in testimony at a hearing on the financial stability of the airline industry before the Aviation Subcommittee of the Senate Commerce, Science and Transportation Committee.

"When airlines were healthy, legacy carriers spent surplus cash by purchasing unnecessary aircraft, irresponsibly expanding operations and pursuing foolish mega-mergers," said Roach. "At the same time, these airlines refused to properly fund their employee pension plans, and now more than a hundred thousand participants and beneficiaries at US Airways and United Airlines have lost more than $5 billion of their promised pension benefits."

The IAM has asked Transportation Secretary Norman Mineta to convene an airline summit so airline executives, labor leaders and government officials could jointly develop solutions to the industry's problems.

"Passengers have returned since 9-11, but the continued reliance on failed business plans jeopardizes our air transportation system," said Roach. "The industry needs new ideas. Airlines can't continue refusing to charge at least what it costs to provide their service and then claim financial emergencies. Whether it be a mandatory fuel surcharge or other government intervention, some re-regulation of the industry is clearly necessary. Left alone, airlines will price themselves out of existence."

The complete Machinists Union testimony is available on the IAM website, Representatives from the Government Accountability Office, Air Transport Association Inc. and J.P. Morgan Securities Inc. also testified at the hearing.

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Last modified: 2/18/2010

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