CWA Releases New Report on How Outsourcing, Restructuring, and Consolidation are Harming Workers and Consumers

Wednesday, January 8, 2020

In advance of a U.S. House Subcommittee on Aviation hearing on working conditions for airline ground workers that has been scheduled for January 15, CWA has released a new report called Fissuring in Flight by labor economist Dr. Brian Callaci. The report uses government data to show how major airline carriers have used outsourcing, restructuring, and consolidation to suppress wages and erode the quality of jobs in the airline industry.

Callaci will testify at the January 15 congressional hearing along with Piedmont Airlines passenger service agent Donielle Prophete, Vice President of CWA Local 3645, who will call on American Airlines to address serious safety issues for passenger service agents at the company’s subsidiaries including Piedmont.

Prophete has first-hand experience of the tragic consequences when safety hazards go unaddressed. She works at Charlotte Douglas International Airport, where ramp worker Kendrick Hudson was killed in August when the vehicle he was driving flipped over after hitting a piece of baggage he could not see that had fallen out of a luggage cart.

Ground service workers from 32BJ SEIU and UNITE-HERE Local 23 are also expected to testify.

Key findings from Fissuring in Flight:

  • A merger wave across the US domestic airline industry has resulted in control of the market by three legacy airlines – America, Delta, and United – with limited competition from other airlines. Those three large domestic airlines are outsourcing ground and passenger service work to third-party contractors, and relying on regional airlines they’ve acquired or contracted for an increasing share of routes to do the same work as direct employees but for lower wages.
  • Outsourced employment in the U.S. domestic airline industry has skyrocketed from 19% in 2001 to 30% in 2018.
  • Outsourcing, contracting, and consolidation are all contributing to stagnant wages for workers in the industry. But workers’ best way to fight back against these harmful trends, collective bargaining power, is declining — especially with the rise of contracting arrangements that exclude outsourced workers from directly bargaining with the employers that control their working conditions.
  • In the airline industry, wages for employees working directly for carriers are above the national average for all workers. However, outsourced employee wages are below the average and have been stagnant, demonstrating that this outsourcing trend is used by airlines to avoid paying workers a fair share of profits.
  • Heavily outsourced occupations in the airline industry have lower wages. As outsourcing of passenger and fleet service occupations has increased by 10% in the last decade, wages have declined by five percent.
  • The three legacy airlines are using regional carriers, such as Envoy and Piedmont (American Airlines), to operate more and more of their flights. These regional carriers fly under the name of the parent airline and are largely controlled by the parent, but wages at these carriers are much lower in comparison to direct employees of the main airlines. This model threatens to further erode the quality of jobs in the airline industry.

Read the full report here: CWA-Union.org/AirlineOutsourcing

“It's important for Congress to investigate safety at Piedmont and other regional carriers because my life and my coworkers' lives depend on it,” said Danielle Prophete, Piedmont passenger service agent and Vice President of CWA Local 3645. “Regional carriers are an important building block of our current passenger air system. American Airlines needs to be held accountable to make sure that all passenger service agents have stronger safety protections and safe work environments, without compromise.”

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