Alaska pilots reject 20% pay cut

Pilots for Alaska Airlines overwhelmingly rejected a tentative agreement, negotiated by their union, that called for less severe pay cuts than those imposed by an arbitrator.

Nearly 90 percent of the pilots who voted said "no" to a package that would have limited pay cuts to 20 percent across the board, rather than 22 to 34 percent cuts set by the arbitrator.

Although the tentative agreement offered better wages, it also meant increased health-insurance premiums and work-rule changes that would have brought less certain flying schedules.

In addition, it would have placed newly hired pilots into a 401(k)-type retirement plan rather than the company's pension plan, requiring pilots to put more of their own money toward retirement, the union said.

The Air Line Pilots Association, which represents about 1,500 pilots at Alaska, took a neutral stance on the agreement when putting it up for a vote.

"Our pilots were faced with two choices, neither of them good," said Capt. Mark Bryant, chairman of the union at Alaska, said in a prepared statement.

By rejecting the tentative agreement, "our pilots have unequivocally said their future benefits are worth more than a little extra money in their pockets right now," Bryant said.

The pilots will continue working under a contract that took effect May 1, the day after an arbitrator issued key decisions regarding pay and other issues.

It is a two-year contract under which most Alaska captains earn at least $133,000 a year based on a guaranteed minimum of 75 flying hours a month, according to an analysis by John Steinbeck, who runs a Web site called Airline Pilot Central.

The tentative agreement would have created a five-year contract with only one pay increase — a 2 percent raise in 2008.

Alaska Chief Executive Bill Ayer said he was disappointed with the outcome, and that the pact offered a better long-term option for pilots.

But for the airline, he said, the contract now in effect "provides a market-based cost structure that will allow Alaska Airlines to be competitive and pursue future growth."

Alaska officials expect the airline to save $80 million to $90 million annually as a result of the arbitrator's decision.

Tony Salmon, a first officer for Alaska and spokesman for the union, voted against the tentative agreement, although he sustained a pay cut of almost 30 percent under the arbitrator's decision. He now makes roughly $90,000 a year.

"I have to look long term," he said.

"In two years, we'll have the opportunity to at least negotiate some of this back."

That sentiment was common when the union gave presentations to about 600 pilots in Seattle, Anchorage and Los Angeles, Salmon said.

"A lot of them at the road shows voiced the opinion that benefits and work rules are much harder to get back than wages are," he said.

The Air Line Pilots Association will proceed with a lawsuit it filed in May asking a federal district court to vacate the arbitrator's decision. The company has until July 19 to respond to the lawsuit.

In May, Alaska's tentative agreement with the union seemed like an olive branch extended amid labor turmoil.

At the time, the airline was in a court battle with the baggage-handlers union for letting go 472 workers at Seattle-Tacoma International Airport.

A federal judge has since denied the union's bid to have those jobs immediately reinstated.

The day before announcing its tentative agreement with pilots, Alaska announced a tentative agreement with the flight-attendants union after talks had apparently run into trouble.

The Association of Flight Attendants has recommended Alaska's roughly 2,400 flight attendants vote for their tentative agreement. Results are expected July 19.

One industry expert was surprised at the result of the pilots' vote.

"I guess to them, cash is not king. It's benefits that are king. That's a surprise. I'd think they'd rather have cash to invest or spend as they see fit," said Henry Harteveldt, an airline analyst at Forrester Research in Cambridge, Mass.

Melissa Allison: 206-464-3312 or mallison@seattletimes.com