Alaska Airlines and Horizon Air 2007 Annual Report Download - page 110

market wage increases, and higher healthcare
costs. Horizon faces similar pressures on wages
and benefits. We expect to see continued
upward pressure on wages and benefits in the
future. We recognize the need to continue to
improve employee productivity in order to
mitigate this cost pressure and to reduce our
wages and benefits on an available-seat-mile
basis. We have initiatives underway to increase
productivity and efficiency.
We had 14,710 (Alaska and Horizon had 10,526
and 4,184, respectively) active full-time and part-
time employees at December 31, 2007,
compared to 14,485 (10,454 at Alaska and
4,031 at Horizon) as of December 31, 2006.
Wages, salaries and benefits (including variable
incentive pay) represented approximately 30%
and 28% of our total operating expenses in 2007
and 2006, respectively.
At December 31, 2007, labor unions
represented 84% of Alaska’s and 48% of
Horizon’s employees. Our relations with our labor
organizations are governed by the Railway Labor
Act (RLA). Under this act, collective bargaining
agreements do not expire but instead become
amendable as of a stated date. If either party
wishes to modify the terms of any such
agreement, it must notify the other party in the
manner prescribed by the RLA and/or described
in the agreement. After receipt of such notice,
the parties must meet for direct negotiations,
and if no agreement is reached, either party may
request the National Mediation Board to appoint
a federal mediator. If no agreement is reached in
mediation, the National Mediation Board may
declare that an impasse exists, at which point
the National Mediation Board offers binding
arbitration to the parties. Either party may
decline to submit to arbitration. If either party
rejects arbitration, a 30-day “cooling-off” period
commences. During that period, a Presidential
Emergency Board may be established, which
examines the parties’ positions and
recommends a solution. The Presidential
Emergency Board process, if invoked, lasts for
30 days and is followed by another “cooling-off”
period of 30 days. At the end of the applicable
“cooling-off” period, unless an agreement is
reached or action is taken by Congress, the labor
organization may strike and the airline may
resort to “self-help,” including the imposition of
any or all of its proposed amendments on the
collective bargaining agreements and/or the
hiring of workers to replace strikers.
Alaska’s union contracts at December 31, 2007 were as follows:
Union Employee Group
Number of
Employees Contract Status
Air Line Pilots Association
International (ALPA)
Pilots 1,483 In Negotiations
Association of Flight Attendants (AFA) Flight attendants 2,720 Amendable 4/27/10
International Association of
Machinists and
Ramp service and stock
clerks; and Clerical, office
and passenger service
664 Amendable 7/17/10
Aerospace Workers (IAM/RSSA) 3,121 Amendable 7/17/10
Aircraft Mechanics Fraternal
Association (AMFA)
Technicians, inspectors
and cleaners
678 Amendable 10/01/09
Mexico Workers Association of Air
Transport
Station personnel in
Mexico
111 Amendable 9/29/09
Transport Workers Union of America
(TWU)
Dispatchers 35 Amendable 7/01/10*
* Collective bargaining agreement contains interest arbitration provision.
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