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MINIMUM STANDARDS: THE PORT OF PORTLAND’S OPPORTUNITY TO FIX BEHIND-THE-SCENES PROBLEMS AT PDX

Portland International Airport (PDX) has earned much positive attention for being

a great airport. It ranks highly for on-time departures, a clean and comfortable

terminal, good food and popular retail stores. The Port of Portland takes pride in

the multiple “America’s Best Airport” awards voted on by readers of Travel & Lei-

sure magazine.

There is another PDX, however, largely hidden from view.

Subcontracted PDX workers cite persistent poverty, high turnover, under-

staffing, and equipment problems as trends at PDX that increase risk for

themselves and the public. These trends, combined with a history of retali-

ation from subcontractor management when workers raise concerns around

safety and working conditions, mean subcontracted workers are being left

behind at “America’s Best Airport”.

Airport jobs were once good jobs with fair pay, benefits, and union representation.

But for many years, airlines have been outsourcing essential services, such as

cleaning and fueling planes, handling baggage and cargo, and assisting passen-

gers with wheelchairs.

Now, the Port of Portland has a choice, whether to allow this situation to remain

the same, or forge a better way for Portland International Airport.

The Port of Portland has demonstrated its leadership in other arenas, including

airport management, environmental practices, and health and safety for its own

employees. Now it can continue its legacy of excellence by increasing job quality

and improving services among the Airline Service Providers.

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TABLE of CONTENTSExecutive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Outsourcing has driven down job standards at airports nationwide . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Problems behind the scenes at PDX . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Poverty at PDX: Poor compensation hurts workers,

their families, and our regional economy 6

Poor working conditions may increase risk

for workers, passengers, and the Port 7

High turnover at PDX may threaten airport operations 8

Changing service contractors without Worker Retention can be disastrous 9

Subcontractors have a history of retaliation against workers

who raise safety or working condition issues 10

It’s time for Port of Portland to lead on job quality throughout the airport . . . . . . . . . . . . . . . . . . . . . . . . . 11

Extending the Port of Portland’s own high standards

throughout the airport 11

A proven model for improvement 11

The Port has the responsibility and the authority

to fix these problems 12

Minimum Standards for PDX Airline ServiceProviders 12

Recommendations for implementation 13

Minimum Standards will serve the Port’s business interests,

and benefit all stakeholders 13

Minimum Standards are no threat to airlines’ operations at PDX 14

Airlines are making record profits; they can invest in their front-line workers 15

Conclusion: The Port of Portland can make PDX America’s Best Airport for everyone . . . . . . . . . . . . . . . . . . . . . . . . . 16

Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

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EXECUTIVE SUMMARYPortland International Airport (PDX) has earned much positive attention for being a

great airport. It ranks highly for on-time departures, a clean and comfortable ter-

minal, good food and popular retail stores. The Port of Portland takes pride in the

multiple “America’s Best Airport” awards voted on by readers of Travel & Leisure

magazine.

There is another PDX, however, largely hidden from view.

Airport jobs were once good jobs with fair pay, benefits, and union representation.

But for many years, airlines have been outsourcing essential services, such as

cleaning and fueling planes, handling baggage and cargo, and assisting passen-

gers with wheelchairs. The Airport Service Providers (ASPs) they contract to do this

work often have low standards, which has created a number of serious problems.

Last year, SEIU Local 49 conducted a non-scientific survey of 148 PDX service

workers. This and other research has brought to light a number of behind-the-

scenes problems, including:

�� Poverty persists at PDX. Low wages do not cover the cost of living, creating

instability for workers and their families. This does not meet the economic in-

terests of the Port of Portland. Many PDX service workers rely on public assis-

tance programs to meet their essential needs, such as food, shelter, and health

care. This means that while airlines such as Alaska, United, and Delta Airlines

are making record profits, they and their service contractors receive de facto

subsidies from other public agencies that support underpaid airport workers.

Other public agencies in our region have taken action to raise labor standards.

By raising Minimum Standards, the Port of Portland can lift PDX workers out of

poverty, while simultaneously spurring growth in induced jobs.

�� High turnover creates risk. For a number of key Airline Service Providers

(ASPs), the average annual turnover rate has been 60% over the last three

years, according to data from the Port of Portland. Such high turnover may

threaten safety and security.

�� Understaffing and equipment problems increase risk for workers and for

the Port of Portland. About two thirds of survey respondents said they work

with equipment that is insufficient or in poor condition, and that their company

does not have enough staff to do a good job.

�� Subcontractors have a history of retaliation against workers who raise

safety or working condition issues. Some workers say they are afraid of

speaking up about problems behind the scenes, because their managers could

fire or otherwise retaliate against them. For example, in 2012, a jury found that

Alaska Airline’s ground handling company Menzies Aviation had illegally fired

two workers after they complained to Oregon OSHA about a lack of toilets.

These problems may put at risk PDX’s operations and quality of service, as has

happened at other airports. As a result of United’s recent outsourcing of ground

handling at Denver International, frustrated passengers have faced a luggage

debacle that became national news. Low standards can also be life-threatening.

In the last year, ramp workers employed by Menzies Aviation and Prospect Airport

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Services – two companies active at PDX – were killed on the job. And in 2005,

when Alaska Airlines outsourced Sea-Tac ground handling to Menzies Aviation,

an inexperienced worker dented a plane, resulting in an emergency landing after

a hole ripped through the fuselage mid-flight. It would be a tragedy if the Port of

Portland waited until after such an emergency occurred at PDX to ensure all com-

panies serving our airport meet high standards.

Other airports have taken the lead in fixing these problems, by raising minimum

standards that Airline Service Providers must meet in order to operate there. Since

the early 2000’s, San Francisco International Airport (SFO) has raised wages, set

standards for safety and equipment, required that experienced workers be rehired

when service contracts change hands, and established strong whistleblower pro-

tection language. These measures dramatically reduced turnover, and according to

employers, improved productivity, employee morale, and customer service. Since

then, other airports have created comparable programs and policies.

The Port of Portland has the responsibility and the authority to implement Mini-

mum Standards. As the airport owner, the Port has a proprietary interest in improv-

ing operations and reducing risk. In addition, Oregon statutes and Port Ordinance

423-R already grant the authority to set Minimum Standards. In fact, PDX already

has a set of Minimum Standards for General Aviation, covering the companies that

serve charter planes and private pilots. Now is the time for the Port to set enforce-

able Minimum Standards that cover the companies that serve the major airlines.

These should include:

�� Standardized contracting requirements. Currently all companies operating at

PDX are required by Port ordinance to have contracts with PDX. However, those

contracts should and could be improved, by regular oversight to prove that com-

panies at PDX comply with laws and regulations, that they are financially stable,

and that they are qualified to operate at our airport.

�� Labor harmony. Outsourced companies at PDX should have a written plan,

approved by the port, with clear steps on how they will avoid disruptive labor

strife.

�� Improved safety, training, & equipment standards

�� Whistleblower protection. Guarantee that workers who report dangerous

problems won’t be retaliated against.

�� Workforce retention. Ensure that when an airline must outsource work in its

operations, the current workforce continues to work so that operations remain

smooth.

�� Living wage & healthcare provisions.

The airlines operating at PDX already operate profitably at the airports that have

raised Minimum Standards, and they can do the same here. Airlines are making

record profits and can afford to invest in their front-line workers.

By raising Minimum Standards, the Port of Portland can significantly reduce risk

to protect its financial interests; build Social Equity into its business practices; and

fulfill its mission of enhancing the region’s economy and quality of life.

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OUTSOURCING HAS DRIVEN DOWN JOB STANDARDS AT AIRPORTS NATIONWIDEAirport jobs were once dependably good jobs, with fair pay, benefits, and union

representation. In recent decades, however, the airline industry has used outsourc-

ing to cut costs and boost profits, with negative impacts on job quality.

Outsourcing refers to airlines’ contracting other companies to handle certain jobs

– such as cleaning and fueling planes, handling baggage and cargo, and assist-

ing passengers with wheelchairs – rather than hiring their own employees. This

approach has eroded wages and job security for airport workers, transforming

middle-class airline careers into jobs with poverty wages, few benefits, and limited

job security.1

Nationally, average real wages for airport operations workers fell by 14 percent

from 1991 to 2011.2 In some job classes, the drop in wages has been even more

precipitous. As seen in the Fig. 1, airlines’ outsourcing of baggage handlers more

than tripled, from 25 percent to 84 percent, from 2002 to 2012. In the same period,

baggage handlers’ average real wages fell by 45 percent, from the equivalent of

$19 an hour, in 2012 dollars, to $10.59.

Wages have also declined for other classes of airport workers, nationwide, and

at PDX.

2002 2012

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

$25 .00

$20 .00

$15 .00

$10 .00

$5 .00

$0 .00

FIGURE 1 AS AIRLINES HAVE OUTSOURCED MORE JOBS, WAGES HAVE DROPPED DRAMATICALLYAverage Hourly Wages for Baggage Porters in United States, 2002-2012, in 2012 dollars

Source: Dietz, Miranda, Peter Hall, and Ken Jacobs. Course Correction: Reversing Wage Erosion to Restore Good Jobs at American Airports. Berkeley, CA: UC Berkeley Center for Labor Research and Education, October 2013.

WAGES

% of JOBS OURSOURCED

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PROBLEMS BEHIND THE SCENES AT PDXThere is a lot to be proud of at Portland International Airport. PDX has won acclaim

for being a great airport in many ways, including on-time flights, an attractive and

efficient terminal, and good food.3 Behind the scenes, however, outsourcing has

contributed to serious problems that need to be addressed.

POVERTY AT PDX: POOR COMPENSATION HURTS WORKERS, THEIR FAMILIES, AND OUR REGIONAL ECONOMYThe impact airline outsourcing has had on job quality nationwide is true also

at PDX.

Last year, we surveyed 148 PDX airline

service workers from eight compa-

nies. Among outsourced PDX service

workers, our survey found a median

wage of $10.30 per hour, or $21,424

per year. This is about half of what

it costs for an average family to live

in Multnomah County.4 Thirty-seven

percent of workers reported earning

no more than minimum wage, or $9.25

per hour. Eight-five percent said they

receive no annual wage increases. This

means workers are constantly having

to choose between paying the rent on

time and buying food, going to the doc-

tor or keeping the lights on.

As a result, many PDX service workers

have to rely on public assistance pro-

grams to meet their essential needs, such as food, shelter, and health care. Twen-

ty-nine percent of full-time workers who took our survey said they receive support

from such programs.

This means that while airlines such as Alaska, United, and Delta Airlines are mak-

ing record profits, they and their service contractors receive de facto subsidies from

the public programs that support underpaid airport workers.5

When the state pays for workers’ essential needs such as food and health care,

because the workers’ wages are too low to afford them, this represents an indirect

subsidy. The recent study The High Cost of Low Wages in Oregon calculates that

“ I work hard at PDX airport making sure that passengers who need assistance make it to their planes on time, making minimum wage with no benefits. To make sure that my lights didn’t get cut off, IRCO (Immigrant Refugee Community Organization) paid my power bill this month. We shouldn’t have to depend on public assistance to get by when we work at the nation’s best airport, an airport

owned by all of us. ”Kasil KaprielPASSENGER SERVICE AGENT FOR HUNTLEIGH

Public assistance to low-wage workers costs $1.7 billion in Oregon, new report says

JANUARY 08, 2015

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Oregon subsidizes low-wage employers to the tune of at least $1.75 billion per

year, across all industries.

Port of Portland is an important driver of our regional economy, but this pool of

low-wage jobs is like sand in the engine. When PDX Airline Service Providers pay

poverty wages, they are contributing to this problem. The Port of Portland, by

ensuring the airlines and their service providers meet minimum standards, can be

a part of the solution.

In fact, PDX is already recognized for its ripple effect on employment rates. For

every 10 people who work at PDX, their personal spending creates another 4.5

jobs, according to research commissioned by the Port.6 When the Port of Portland

ensures PDX workers are earn living wages, those workers’ increased income will

translate into new jobs created.

POOR WORKING CONDITIONS MAY INCREASE RISK FOR WORKERS, PASSENGERS, AND THE PORTIn our 2014 survey, PDX workers reported other problems behind the scenes that

relate to Airline Service Providers’ low standards.

�� Understaffing. Sixty-five percent of workers who responded said their compa-

ny does not have enough staff to do their jobs well.7

�� Equipment problems. Two thirds of workers who responded reported equip-

ment that is insufficient or in poor condition, including wheelchairs, aircraft fuel-

ing equipment, and vehicles used to transport baggage and workers on the ramp.

�� Nearly half (47.9%) reported a lack of needed supplies, such as gloves,

cleaning chemicals, and clean rags for cleaning.

�� Injuries. Thirty-four percent of workers who responded have been injured

or fallen ill due to their job, and twice as many (68%) felt at risk for repetitive

motion injuries. Forty-six percent felt at risk of hurting themselves or others due

to lifting.

�� Health and safety hazards. Forty-one percent of workers who responded said

they had been exposed to chemicals, jet fuel, bodily fluids, or other hazards.

These conditions are harmful not just to PDX workers. They may have negative

impacts on passengers, including increased risk of damage to baggage, and unsan-

itary conditions on planes that have not been thoroughly cleaned.

Workers who clean planes for Alaska Airlines (employed by Menzies Aviation) and

United Airlines (Prospect Airport Services) have reported that they have insufficient

time and supplies to clean the inside of planes. One Menzies cabin cleaner, Joyce

Hewling, said “Normally, our cleaning crews are understaffed and poorly managed.

We work extremely fast but still we don’t have time to finish all the cleaning tasks

on Alaska Airlines’ checklist. When we raise concerns about this, our managers

often tell us “Just check off all the boxes anyway. I don’t want to see any empty

spaces there.”

And Prospect Airport Services cabin cleaners reported to their supervisor in Septem-

ber, “We believe old unlaundered mops may breed bacteria that could be harmful

to passengers and workers. We feel that cleaning bathrooms without proper gloves,

masks, a dedicated mop and cleaning materials may put us and passengers at risk

for diseases.”8

“ Too often our cleaning crews are understaffed and poorly managed. We work extremely fast but still we don’t have time to finish all the cleaning tasks on Alaska Airlines’ checklist. When we raise concerns about this, our managers often tell us ‘Just check off all the boxes anyway. I don’t want to see any empty spaces there.’ Conditions have improved somewhat since we started organizing a union, but they are not yet not up to the standards they ought to be.”Joyce HewlingCABIN CLEANER FOR MENZIES AVIATION

Public assistance to low-wage workers costs $1.7 billion in Oregon, new report says

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HIGH TURNOVER AT PDX MAY THREATEN AIRPORT OPERATIONSGiven the low pay and poor working conditions many PDX service workers face, it

should come as no surprise that employee turnover is high. Our analysis of Port of

Portland badge data shows annual turnover at outsourced Airline Service Provid-

ers averaged 60 percent over the last

three years.9

Airport work at PDX is seasonal by

nature, but these numbers suggest a

much bigger problem than can be ex-

plained by seasonal fluctuations alone.

These data confirm what PDX workers

have said anecdotally. For example,

Menzies Aviation, has had a 65% aver-

age annual turnover rate the last three

years. Recently James Davidson, a

Lead Ramp Agent for Menzies Aviation,

spoke to the PDX Community Advisory

Committee.

“I am constantly seeing co-workers come

and go. It feels like every week there is

at least one new ramp agent assigned to

my crew,” said Davidson. “Working on the

ramp is fast-paced and dangerous. Mis-

steps can lead to damaged planes and

equipment, and injured co-workers.”

More than half of PDX workers who

responded to our survey said they have

no training in disaster response. In

the event of a natural disaster, active

shooter, or other event occurred at PDX,

how many front-line workers will have

the experience and training necessary to react appropriately?

Now more than ever, the Port of Portland must ensure that Airline Service Providers

are retaining trustworthy employees, with deep knowledge of PDX and developed

situational awareness.

FIGURE 2

AVERAGE ANNUAL TURNOVER of PDX Airline Service Providers (ASPs), FY 2011-2014

COMPANY SERVICE PROVIDED TURNOVER

Quantem Aviation Services Inc. Cargo handling 88%Smarte Carte Luggage carts 82%Command Security Corp. Cargo security 69%Menzies Aviation

(John Menzies plc)Ground handling – Alaska Airlines 65%

Airport Terminal Services Ground handling – various airlines 63%Worldwide Flight Service Ground handling 53%Prospect Airport Services Cabin cleaning - United and US Air 52%Premier Baggage Service Baggage Handling 49%

ABM Facility ServicesPDX Baggage handling system;

cabin cleaning – Southwest Airlines 49%

Huntleigh USA Corp. Wheelchair assistance 47%Aircraft Service

International Inc. (ASIG)Fueling 41%

Bags Inc.Skycaps – Alaska/Horizon;

Luggage storage and delivery 40%

SCIS Air Security Corp. Catering security 23%ALL COMPANIES (WEIGHTED AVERAGE) 60%Source: Port of Portland badge data

“ I am constantly seeing co-workers come and go. It feels like every week there is at least one new ramp agent assigned to my crew.

Working on the ramp is fast-paced and dangerous. Missteps can lead to damaged planes and equipment, and injured co-workers.”James DavidsonLEAD RAMP AGENT FOR MENZIES AVIATION

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CHANGING SERVICE CONTRACTORS WITHOUT WORKER RETENTION CAN BE DISASTROUSFrom time to time, airlines choose to cancel service contracts with one company

and replace them with another. They have a right to do so. But when they make

such a change without retaining experienced workers, it can lead to a fiasco.

For example, Simplicity Ground, a subsidiary of Menzies Aviation, took over bag-

gage services for United Airlines at Denver International Airport last December.

The contract change resulted in 650 job losses for Denver workers and led to “lost

luggage, inadequate staffing and a baggage claim area in chaos.”10

In May 2005, Alaska Airlines laid off 472 of its ground handling employees and

replaced them with Menzies Aviation. Alaska estimated this move would save the

company more than $13 million a year.11 In the months following, a series of prob-

lems arose. In December 2005, a Menzies worker bumped a plane with a baggage

loader, which resulted in a hole erupting in the side of the plane during flight,

requiring an emergency landing.12 In January 2006, an Alaska 737 was damaged

when a Menzies employee inadvertently ran it into a jetway and a baggage loader,

and an Alaska passenger watched as a Menzies worker threw the crate containing

her dog into an Alaska jet, rather than loading it with a conveyer belt.13

United Baggage Woes Grow At

DIA, Fingers Point At New

Contractor

JANUARY 5, 2015

“Absolutely Terrifying” Flight After Ground-Crew MistakeAlaska Airlines Flight 536 was 20 minutes out of Seattle and heading for Burbank, Calif., Monday afternoon when a thunderous blast rocked the plane. Passengers gasped for air and grabbed their oxygen masks as the plane dropped from about 26,000 feet, passenger Jeremy Hermanns said by phone Tuesday. “This was absolutely terrifying for a few moments,” said Hermanns, 28, of Los Angeles. “Basically your ears popped, there’s a really loud bang and there was a lot of white noise. It was like somebody turned on a leaf blower in your ear.”… An investigator with the National Transportation Safety Board (NTSB) said baggage handlers had bumped the plane’s fuselage with loading equipment and caused “a crease” in the side of the aircraft. The handlers are contract workers hired to replace unionized workers in May.

DECEMBER 28, 2005

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SUBCONTRACTORS HAVE A HISTORY OF RETALIATION AGAINST WORKERS WHO RAISE SAFETY OR WORKING CONDITION ISSUESIn 2010, Menzies Aviation, Alaska Airlines’ ground handling company, fired two

workers after they complained to Oregon OSHA about a lack of toilets. Later, a jury

found that Menzies had retaliated illegally and awarded them $332,000 in damag-

es.14 The workers testified that when they first reported the problem, their manag-

ers joked that they should “wear a diaper.”

In 2001, according to Multnomah County court records, a security screener was

fired after she reported a potential security violation to the Federal Aviation Admin-

istration (FAA).15

If the Port of Portland establishes a robust Whistleblower Protection policy, it could

significantly contribute to creating a culture of honest reporting throughout the airport.

Jury Awards $332,000 To Two Men Fired After They Complained About Lack Of On-The-Job ToiletDouglas Eki and Xerxes “Jason” Doctolero did mechanical work at Portland Interna-tional Airport and urinated in a bucket or worse yet – soiled their clothing -- because they couldn’t get to a toilet fast enough. …After months of frustration and three accidents, Eki complained to the Oregon Occupational Safety and Health Division in June 2010. An OSHA inspector visited Menzies Aviation the following month. Both men cooperated with the inspector, and on Aug. 6, 2010, OSHA cited the company for failing to provide restroom facilities. The men were fired later that month.…”If someone did it here in Dallas I’d have them gone by the time they zipped up,” Phil Harnden, a Menzies vice president, wrote in an email to managers on Aug. 10. “... They have got to go -- there is no place for them in Menzies. Tell me when it will be done by.”

MAY 20, 2012

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IT’S TIME FOR PORT OF PORTLAND TO LEAD ON JOB QUALITY THROUGHOUT THE AIRPORTEXTENDING THE PORT OF PORTLAND’S OWN HIGH STANDARDS THROUGHOUT THE AIRPORTThe Port is in many ways a cutting-edge airport authority. In 2010, it revised its

Master Plan through a participatory planning process called Airport Futures, includ-

ing a commitment to sustainability in environmental, economic, and social arenas.16

Since then, the Port has demonstrated measurable progress in areas of recycling,

water quality, energy efficiency, and other environmental goals. The Port of Port-

land has also made great strides in improving the health and safety of its own

employees at PDX, receiving certification from Oregon OSHA’s Safety and Health

Achievement Recognition Program (SHARP).17

Now it is time to extend this kind of proactive change throughout the airport,

making good on the Airport Futures goal of creating “quality job opportunities” and

ensuring the employees of Airline Service Providers are also healthy and safe on

the job.18

A PROVEN MODEL FOR IMPROVEMENTIn the last few years, many leading airport authorities have established labor

standards, enhancing worker performance and lowering turnover without harming

employment or flight volume. . These include the Certified Service Provider Program

at Los Angeles (LAX), San Jose’s Airport Living Wage and Training Standards, and

other programs at Minneapolis, Oakland, JFK, LaGuardia, and Boston-Logan, JFK

and LaGuardia, Ft. Lauderdale, Sea-Tac, and Philadelphia.19

San Francisco International Airport (SFO) set the bar in 2000 with its Quality Ser-

vice Program (QSP). With the aim of improving aeronautical and passenger service

quality, the QSP raised wages, in some cases by 55%, from $6.45 to $10.00 per

hour. It also set standards for training & equipment.

The results were a dramatic improvement. According to a study conducted the

next year, turnover plummeted from 95 percent to 19 percent per year. Employers

reported improvements in work performance, employee morale, disciplinary issues,

and customer service. Employers also saved themselves at least $3.3 million in the

first year, by avoiding an estimated $4,000 in turnover costs per hire.20

In 2001, SFO instituted a Worker Retention requirement, and later a Whistleblower

Protection policy. Since then, when an airport service contract is taken over by a

new company, the well-trained, professional workforce remains in place.

PDX’s major airlines – Alaska/Horizon, Southwest, Delta, American, and United – are

already operating at these airports, and have demonstrated they can do so profitably.21

12

THE PORT HAS THE RESPONSIBILITY AND THE AUTHORITY TO FIX THESE PROBLEMSThe Port is a public agency, created by the Oregon Legislature, and our airport is a public good.22 We count on the Port of Portland to serve the public interest, not just the interests of the airlines, the Port’s largest financial stakeholders.

As the airport owner, the Port has a propriety interest in improving operations and reducing risk. In addition, Oregon statutes and a Port Ordinance already grant the authority to set Minimum Standards.

Oregon statutes allow the Port of Portland to consider the qualifications, compen-sation and retention policies of bidding contractors and lessees operating on Port property, and of their subcontractors.23 The Port may set minimum wage require-ments in its public contracts.24

Port Ordinance 423-R delegates broad authority to the Port Director to modify PDX Rules to improve security, safety, efficiency, and to implement best practices.25 It requires any company operating at the airport to comply with an operating agreement issued by the Director, and under terms and conditions prescribed by the Port.26 It also gives the Port Director broad powers to “establish qualifications, standards, and criteria which make up the Minimum Standards which must be met as a condition for the right to engage in aeronautical activities at each Airport.”27

In fact, the Port already has established Minimum Standards for General Aviation, covering the companies that serve charters and private pilots. These Minimum Standards include requirements that General Aviation companies comply prove they are experienced, responsible, financially stable, safe, and secure.

Now is the time to set Minimum Standards that cover the companies that serve the major airlines.

MINIMUM STANDARDS FOR PDX AIRLINE SERVICEPROVIDERSWe urge the Port to adopt and enforce these Minimum Standards for Service Pro-

viders at PDX:

STANDARDIZED CONTRACTING REQUIREMENTS In order to become Contracted

Service Providers and operate at PDX, all companies would need to prove that they

comply with laws, regulations, and other Minimum Standards, that they are finan-

cially stable, and that they are qualified to operate at our airport.

LABOR HARMONY Outsourced companies at PDX should have a written plan, ap-

proved by the Port, with clear steps on how they will avoid disruptive labor strife.

SAFETY, TRAINING, & EQUIPMENT STANDARDS Ensure all badged workers

of permitted contractors at PDX are adequately trained on worker and passenger

safety, disaster response, and requirements for adequate equipment at all times.

WHISTLEBLOWER PROTECTION Guarantee that workers who report dangerous

problems won’t be retaliated against.

WORKFORCE RETENTION Ensure that when an airline must outsource work in its

operations, the current workforce continues to work so that operations remain smooth.

LIVING WAGE & HEALTHCARE PROVISIONS Require living wage and health-

care standards to ensure that lowest-bidder contracting decisions don’t perpetuate

poverty-wage jobs at PDX.

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RECOMMENDATIONS FOR IMPLEMENTATIONComparable standards have proven successful at other airports.28 Tailoring this

experience to PDX, the Port of Portland can take the following steps to implement

Minimum Standards:

1. Establish Minimum Standards that are clear and consistent for all Airline

Service Providers.

2. Create a clear application process, by which Airline Service Providers will

demonstrate they meet all Minimum Standards. Approved companies would be

recognized as Contracted Service Providers (CSPs).

3. Require all new Airline Service Providers to become Contracted Service

Providers (CSPs) before beginning operations.

4. Require ASPs already operating at PDX to apply to become CSPs within a

period of time, such as six months.

5. Require all CSPs to report, within 30 days, any material changes to the infor-

mation provided on their CSP application.

6. Require all companies to reapply for CSP recognition, periodically, such

as every 1-3 years.

MINIMUM STANDARDS WILL SERVE THE PORT’S BUSINESS INTERESTS, AND BENEFIT ALL STAKEHOLDERSCreating enforceable Minimum Standards is not just the right thing to do for work-

ers. It makes good business sense for the Port of Portland, the airlines, and Airline

Service Providers, in many ways:

�� Reduce risk. Standardized Contracting Requirements will help ensure that all

companies operating at PDX run safe operations and are financially stable. Labor

Harmony plans reduce the risk of disruptive labor strife.

�� Safety. Safety, training, and equipment standards will reduce risk to employees,

�� Security. Retaining more workers for longer periods can enhance security,

because experience is required to develop situational awareness.

�� Foster economic growth. The Port has already demonstrated itself to be an

important economic engine. In the 2011 report “The Local and Regional Eco-

nomic Impacts of the Port of Portland,” the Port showed that wages paid to PDX

workers have a positive ripple effect, creating

�� Passengers can benefit from improved customer service and efficiency, as

shown by the results of SFO’s Quality Service Program.

�� By reducing turnover, the airlines and their service providers can save money,

through reduced hiring costs.

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MINIMUM STANDARDS ARE NO THREAT TO AIRLINES’ OPERATIONS AT PDXSome may suggest that raising standards at PDX will cost the airlines too much

money, and dissuade them from adding flights in and out of our airport. But past

experience and empirical research suggests otherwise.

First, research on SFO’s Quality Service Program shows that setting Minimum Stan-

dards can mean significant improvements in job quality, with limited cost increas-

es.29 These improvements also can be financially beneficial for airlines and their

service contractors. Improved employee retention and morale can improve efficien-

cy and customer satisfaction, and reduce the costs associated with turnover.

Research by the Port of Portland and others suggests that marginal changes in

operating costs at PDX have little or no impact on flight volume.30 Rather, mac-

roeconomic factors such as rates of employment and Gross Domestic Product are

associated with whether or not people fly. Our regional economy is growing, and

major employers such as Intel, Nike, and others, help drive demand for air travel.

PDX had nearly 16 million enplaned passengers in 2014, a new record.

PDX is a great airport, which is lucky for Portland-area travelers, because they don’t

have much choice. As Standard and Poor’s has reported, PDX has limited competi-

tion.31 There are no alternative airports nearby, and PDX serves a primarily Origin

and Destination (“O&D”) market, meaning that most passengers are leaving from or

are traveling specifically to the Portland area, rather than stopping over en route to

another destination.

It is worth noting that in 2010, an Alaska Airlines representative warned that if the

Port of Portland did not modify its annual budget to reduce airline costs, it would

“drive airlines, including ours, to look for opportunities with greater profit poten-

tial.”32 The Port Commission voted to approve the budget anyway, and it there was

no adverse impact on Alaska’s operations at PDX. On the contrary, Alaska/Horizon

flights have continued to increase in the intervening years, and Alaska’s overall

profits have grown rapidly.33

15

AIRLINES ARE MAKING RECORD PROFITS; THEY CAN INVEST IN THEIR FRONT-LINE WORKERSThe American airline industry has bounced back from the shock of 9/11 and the

Great Recession. Thanks to mergers and consolidation, increased revenue streams

such a baggage fees, dropping fuel prices, and other factors, major airlines have

been breaking profit records the last few years. Financial forecasts predict 2015

will continue this trend.34

These airlines have announced plans to return some of these profits to sharehold-

ers. They can afford to invest in their front-line workers, too.

Alaska Air Group

Delta Airlines

Southwest Airlines

American Airlines

United Airlines

$3,000

$2,500

$2,000

$1,500

$1000

$500

$0

FIGURE 3

2014 PROFITS FOR PDX’S MAJOR AIRLINES IN MILLIONS

Source: Airline websites

Airline Profits Soar Yet No Relief For PassengersAir travelers wondering how they would experience the recent wave of airline mergers appear to have an answer: Airplanes are more crowded than ever, fares remain at a five-year high despite plummeting fuel costs — and airlines are reporting record profits and soaring stock prices. The four major airlines all reported huge profits for 2014 in the past week — and made clear that they have no plans to cut airfares or to increase the number of seats. [...]

JANUARY 27, 2015

Airlines Upbeat for 2015 as Oil Prices Fall & Demand RisesDALLAS — Airline stocks soared on Thursday as leaders of United and Southwest gave an upbeat forecast for 2015 that combined strong travel demand and cheaper fuel. ThepriceofjetfuelhasdroppedbyabouthalfsinceSeptember,liftingairlineprofitsandtampingdown fear that global economic weakness could hurt the carriers. Analysts expect all four of the big-gestairlinesintheUnitedStatestopostbiggerprofitsthisyearthanin2014. UnitedContinentalHoldingspredictedthatfirst-quarterprofitmarginswouldbehigherthanmanyanalysts had expected. SouthwestAirlinessaiditexpecteditsfuelbillfor2015tobe$1.7billionlowerthanin2014.

JANUARY 27, 2015

16

CONCLUSION: THE PORT OF PORTLAND CAN MAKE PDX AMERICA’S BEST AIRPORT FOR EVERYONE In recent years, some airlines have chosen to outsource certain services as a

cost-saving strategy, which has negatively impacted airport workers’ jobs and

quality of life.

Now, the Port of Portland has a choice, whether to allow this situation to remain

the same, or forge a better way for Portland International Airport.

The Port of Portland has demonstrated its leadership in other arenas, including

airport management, environmental practices, and health and safety for its own

employees. Now it can continue its legacy of excellence by increasing job quality

and improving services among the Airline Service Providers.

To this end, establishing enforceable Minimum Standards is the right thing to do.

It is clearly within the Port of Portland’s authority. It is also a good strategy for the

Port’s bottom line, as a way to reduce risk, improve operations and customer ser-

vice, and fulfill its mission “to enhance the region’s economy and quality of life.”

17

NOTES1 . Dietz, Miranda, Peter Hall, and Ken Jacobs. Course Correction: Reversing Wage Erosion

to Restore Good Jobs at American Airports. Berkeley, CA: UC Berkeley Center for Labor

Research and Education, October 2013. http://laborcenter.berkeley.edu/livingwage/re-

store_good_jobs_american_airports.pdf.

2 . “Average weekly wages in the airport operations industry generally (excluding air traf-

fic control) did not keep up with inflation, but fell in real terms by 14 percent from 1991

to 2011. Wages for these workers not only grew more slowly than the average rate

across all industries, but also grew more slowly than wages in the low-paying food

services and retail industries. In 2011, workers in airport operations made an average

of $545 a week.”

Executive Summary, “Course Correction.”

3 . “PDX Backgrounder,” Port of Portland, http://www.portofportland.com/newsroom_home.

aspx, accessed February 5, 2015.

4 . The 2012-2017 Portland Plan adopted the Self-Sufficiency Standard – a measure-

ment of the cost of living, without public or private support - as the official measure

of poverty. The Portland Plan, adopted by Portland City Council resolution April 25,

2012. Accessed via http://www.portlandonline.com/portlandplan/index.cfm?c=58776,

February 2, 2015. See Action no. 88 under Economic Prosperity and Affordability Action

Plan, p. 69.

In Multnomah County, the average number of persons per household is 2.34. US

Census State & County QuickFacts, Mult. Co., Oregon, http://quickfacts.census.gov/qfd/

states/41/41051.html, accessed Nov. 5, 2013.

The Self-Sufficiency Standard for Oregon 2011 calculated the Multnomah Co. living

wage to be $19.06 for one adult and one preschool-aged child, which is $20.25 in

2014 dollars. Pearce, Diana M. The Self-Sufficiency Standard for Oregon 2011. Worksys-

tems, Inc., April 2011, p. viii. https://www2.prosperityplanner.org/docs/OR_SSS11_

COLOR%20WEB.pdf.

5 . Frank, Frank, Thomas. “Airline Profits Soar yet No Relief for Passengers.” USAToday.

com, January 27, 2015. http://www.usatoday.com/story/news/2015/01/27/airline-prof-

its-soar-passengers-fuel/22395509/.

Brehmer, Elwood. “Alaska Air Group Has 5th Straight Record Year, Profit up 49%.”

Alaska Journal of Commerce, January 28, 2015. http://www.alaskajournal.com/Alas-

ka-Journal-of-Commerce/February-Issue-1-2015/Alaska-Air-Group-has-5th-straight-

record-year-profit-up-49/

Levine-Weinberg, Adam. “Delta Air Lines, Inc. Earnings: Jet Fuel-Powered Profit

Growth.” The Motley Fool, January 20, 2015. http://www.fool.com/investing/gener-

al/2015/01/20/delta-air-lines-inc-earnings-jet-fuel-powered-prof.aspx.

6 . Martin Associates. The Local and Regional Economic Impacts of the Port of Portland,

2011. Lancaster, PA: Martin Associates, March 15, 2012. http://www.portofportland.com/

PDFPOP/Trade_Trans_Studies_Ecnmc_Impact_2011.pdf.

This report estimated that in 2011, there were the equivalent of 10,077 jobs at PDX,

and that those workers’ personal expenditures supported 4,505 induced jobs. This is

equivalent to 0.447 induced jobs for every direct PDX job.

18

7 . Airport Worker Survey Reveals Problems Behind the Scenes at PDX. SEIU Local 49, July

2014. http://ourpdx.tumblr.com/behind-the-scenes.

8 . Letter to Steve Magistrale, General Manager, Prospect Airport Services, Sep. 30, 2014.

9 . Through a public records request, we obtained from the Port of Portland monthly

reports of the number of active badges held by the companies listed above, and the

number of badges they returned to the Port, over a three-year period. We assume

that the number of badges returned approximates the number of employees whose

employment was terminated in a given month, whether they quit, were fired, or were

laid off. (The Port commented in an email Oct. 15, 2014: “Please note: the numbers

are not going to add up month-over-month... The numbers should, however, be fairly

reasonable when trending over the entire data set.”) To calculate the average annual

turnover rates for each company, and for all companies combined, we divided the sum

of all badges returned over the three-year period by the average number of active

badges per month over the same period, and then divided the resulting ratio by three.

10 . Keeney, Laura. “United Baggage Woes Grow at DIA, Fingers Point at New Contractor.”

The Denver Post, January 5, 2015. http://www.denverpost.com/business/ci_27263121/

united-baggage-woes-grow-at-dia-fingers-point.

———. “United’s Baggage Woes Start to Affect Denver Airport’s Reputation.” The

Denver Post, January 6, 2015. http://www.denverpost.com/business/ci_27270086/

uniteds-baggage-woes-start-affect-denver-airports-reputation.

11 . Allison, Melissa. “Alaska Airlines Outsources 472 Baggage-Handling Jobs.” The Seattle

Times, May 14, 2005, sec. Business & Technology. http://seattletimes.com/html/busi-

nesstechnology/2002274683_alaska14.html.

12 . Sullivan, Jennifer, and Melissa Allison. “‘Absolutely Terrifying’ Flight after Ground-Crew

Mistake.” The Seattle Times, December 28, 2005, sec. Local News. http://seattletimes.

com/html/localnews/2002707586_plane28m.html.

13 . Bowermaster, David. “Latest Alaska Mishap: Landing-Gear Door Open.” The Seat-

tle Times, January 12, 2006, sec. Local News. http://seattletimes.com/html/local-

news/2002734900_alaska12.html.

14 . Green, Aimee. “Jury Awards $332,000 to Two Men Fired after They Complained About

Lack of On-the-job Toilet.” OregonLive.com, May 21, 2012. http://www.oregonlive.com/

portland/index.ssf/2012/05/jury_awards_332000_to_two_men.html

15 . Khou v. Huntleigh USA. First filed in Multnomah Co. circuit court (case no. 02-

0909027), later removed to US District Court (Dist. Of OR), civil action 3-02-01369-ST.

In 2002, former employee Suling Khou sued Huntleigh USA for firing her in retaliation

for her “whistleblower” report on a possible violation of security protocol. According

to the plaintiff’s complaint, in Nov. 2001, Ms. Khou, a Huntleigh employee, observed

a Port of Portland police officer take a young woman through a security exit at PDX

without first taking her through a security check point. Ms. Khou questioned the police

officer. Subsequently, Ms. Khou’s supervisor, Ms. Ann Majewski, verbally reprimanded

Ms. Khou for questioning the police officer. Ms. Khou later reported the incident to the

FAA, which informed Ms. Majewski that she (Ms. Majewski) had acted improperly in

allowing the police officer through security without the required security check. The

next day, Ms. Majewski terminated Ms. Khou’s employment. In Nov. 2003, the parties

agreed to dismiss the case with prejudice.

19

16 . These goals were included in a binding intergovernmental agreement the Port of

Portland signed with the City of Portland and the City of Vancouver. Intergovernmental

Agreement for Ongoing Agreements Related to the Airport Futures Project, 2011. http://

www.pdxairportfutures.com/Documents/PDX_Airport_ftrs_Ongng_Agrmnts_Rltd_Ar-

prt_Ftrs_IGA.pdf.

17 . The Port of Portland’s Maritime operations have been recognized by Oregon OSHA

under its SHARP certification program. Linstrom, Annie. “Port Sets the Standard for

Safety.” Port Dispatch, August 14, 2012. http://www.portofportland.com/publications/

PortDispatch/post/Port-Sets-the-Standard-for-Safety.aspx.

18 . Portland International Airport Master Plan Update - Sustainability Report, July 2010.

http://www.pdxairportfutures.com/Documents/PDX_AF_Sust_rpt.pdf.

Table 3-1: MAJOR OUTCOMES RELATING TO SUSTAINABILITY FROM THE MASTER

PLANNING PROCESS includes “Objective/Recommendation: To encourage employers to

provide quality job opportunities to residents of economically disadvantaged commu-

nities.”

19 . For example, see http://www.lawa.org/cspp/ and http://www.flysanjose.com/fl/busi-

ness.php?page=training/wage&subtitle=Airport+Living+Wage+and+Training+Stan-

dards+|+Airport+Living+Wage.

20 . Reich, Michael, Peter Hall, and Ken Jacobs. Living Wages and Economic Performance:

The San Francisco Airport Model. Berkeley, CA: Institute of Industrial Relations, UC

Berkeley, March 2003. http://www.irle.berkeley.edu/research/livingwage/sfo_mar03.

pdf.

21 . Keenan, Nicole, and Howard Greenwich. Below The Radar: How Sea-Tac Airport’s Sub-

standard Working Conditions Hurt Our Region and How Other Major Airports Changed

Course toward Growth and Prosperity. Puget Sound Sage, March 2013. http://puget-

soundsage.org/downloads/Below_the_Radar.pdf.

22 . Our airport was created with public funds, as a project of the Works Project Administra-

tion (WPA).

Bui, Hien, and Michelle Kain. “The New Deal Was a Big Deal.” Center for Columbia River

History - Columbia Slough. Accessed February 9, 2015. http://www.ccrh.org/comm/

slough/airport3.php.

Oregon Historical Society. “Oregon History Project: Oregon in Depression and War,

1925-1945: The Most Visible of Relief Agencies.” Oregon History Project. Accessed

February 9, 2015. http://www.ohs.org/education/oregonhistory/narratives/subtopic.

cfm?subtopic_ID=106.

23 . ORS § 778.016, Best value standards for Port of Portland contracts and space leases.

24 . ORS § 653.017(3)(b), Local minimum wage requirements.

25 . Port of Portland Ordinance 423-R, Sec. 4.1.1

26 . Port Ordinance 423-R, Sec. 3.2.1

27 . Port Ordinance 423-R, Sec. 4.1

28 . For details of how other airports have implemented such programs, see SFO Quality

Service Program (QSP), http://media.flysfo.com/media/sfo/about-sfo/quality-stan-

dards-program-2015.pdf; and LAX Certified Service Provider Program (CSPP), http://

www.lawa.org/uploadedFiles/AirOps/pdf/CSPP%20Application%20Package%20Fill-

able%20Version.pdf

20

29 . Reich, Michael, Peter Hall, and Ken Jacobs. Living Wages and Economic Performance:

The San Francisco Airport Model. Berkeley, CA: Institute of Industrial Relations, UC

Berkeley, March 2003. http://www.irle.berkeley.edu/research/livingwage/sfo_mar03.

pdf.

30 . Phil G. Hill. “Factors Influencing Airline Service Decisions.” presented at the Port of

Portland Board of Commissioners, August 8, 2012.

Beach, Tracy. “Balancing Airport Fees with Service Needs.” Airport Magazine, Septem-

ber 2014.

31 . For years running, Standard & Poor’s have given the Port of Portland a high credit rat-

ing due in part to “The predominantly O&D nature of passenger traffic and the airport’s

dominant market position in the region.” Mary Ellen E Wriedt, “Ratings Direct: Port of

Portland, Oregon Portland International Airport,”Standard & Poor’s Ratings Services,

Aug. 25, 2014. Accessed via www.portofportland.com/PDFPOP/POP_Invstrs_Stndrd_

Prs_Rtng_2014.pdf, February 1, 2015.

32 . “MINUTES: REGULAR COMMISSION MEETING.” Port of Portland, May 12, 2010. http://

www.portofportland.com/SelfPost/A_201072113186May_10-Fin.pdf.

33 . Brehmer, Elwood. “Alaska Air Group Has 5th Straight Record Year, Profit up 49%.”

Alaska Journal of Commerce, January 28, 2015. http://www.alaskajournal.com/Alas-

ka-Journal-of-Commerce/February-Issue-1-2015/Alaska-Air-Group-has-5th-straight-

record-year-profit-up-49/.

34 . Associated Press. “Airlines Expect Big Rise in Profits in 2015, as Fuel Costs Drop.” NY-

Times.com, January 22, 2015. http://www.nytimes.com/2014/12/11/business/airlines-

expect-big-rise-in-profits-in-2015-as-fuel-costs-drop.html?_r=0.

Sifferlin, Alexandra. “Airline Profits Are About to Surge Thanks to Falling Oil Prices.”

TIME, December 10, 2014. http://time.com/3628415/airline-prices-profits-oil/.

Brehmer, Elwood. “Alaska Air Group Has 5th Straight Record Year, Profit up 49%.”

Alaska Journal of Commerce, January 28, 2015. http://www.alaskajournal.com/Alas-

ka-Journal-of-Commerce/February-Issue-1-2015/Alaska-Air-Group-has-5th-straight-

record-year-profit-up-49/.

Maxon, Terry. “American Airlines, Southwest Post Record Profits.” Dallas Morning News,

October 23, 2014. http://aviationblog.dallasnews.com/2014/10/american-airlines-south-

west-post-record-profits.html/.

Rothman, Andrea, and Simeon Bennett. “Airlines Profit Records Seen Prolonged on Oil

Price Drop.” Bloomberg Business, December 10, 2014. http://www.bloomberg.com/

news/articles/2014-12-10/airlines-to-tap-record-profit-run-as-oil-decline-widens-

margins.

21

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