Dozens of union members and supporters stood outside the Museum of Flight yesterday afternoon, carrying signs denouncing Alaska Airlines...

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Dozens of union members and supporters stood outside the Museum of Flight yesterday afternoon, carrying signs denouncing Alaska Airlines management for recent job losses and pay cuts.

Inside the museum, Alaska Air Group CEO Bill Ayer oversaw a nearly two-hour annual shareholders meeting that included much of the same, without the signs. At times workers who stepped up to address the executives on stage became emotional while describing their unhappiness with the airline.

Alaska Capt. Edward J. Wilson, who has worked for the airline 23 years, told Ayer it was the first annual meeting he has attended where security guards waved a wand over him before he entered.

Alaska Airlines pilot James Veitz holds his son, Logan, before the company’s annual shareholders meeting. Veitz said his salary was reduced by 34.5 percent this month and he was taking care of the baby because his wife works.

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“I’m glad you have so many security people here, because I believe a crime has been committed,” Wilson said, receiving a standing ovation from about a third of the people packed into the museum’s theater.

He was among many workers, including a newly out-of-work baggage handler, who attended the meeting and expressed dismay at the company’s recent cost-cutting moves. Last week, 472 baggage handlers were laid off at Seattle-Tacoma International Airport, and earlier this month pilots took an average 26 percent pay cut after an arbitrator’s decision.

Wilson asked Ayer to say what he plans to do about the “Alaska spirit.”

“I still have it inside of me, but it’s dimmer than it was a few days ago,” Wilson said.

Ayer answered that no one should be surprised that morale is low, given the recent changes. “Yeah, it’s damn painful, and I wish it were different,” he said.

Returning the carrier to profitability will bring job security and the opportunity to grow, he added.

Reaching market levels

Asked why management didn’t take pay cuts commensurate with those demanded from some workers, Ayer replied that management pay is fair based on what the industry pays. Ayer’s salary and bonus in 2004 totaled $479,311, up 1 percent from 2003.

The company needs to save about $340 million a year, a third of it coming from reductions in labor expenses.

That is expected to bring Alaska’s cost per available seat mile down to 7.25 cents, from last year’s 7.92 cents. The figures exclude the cost of fuel.

The airline might have to lower its target below 7.25 cents if fuel or competitive pressures continue to hurt profits, but it would not go back to workers for additional concessions after bringing their compensation down to market levels, Ayer said in an interview before the annual meeting.

Earlene Shaw, whose husband, Donald, died in the 2000 crash of Alaska Flight 261, said during the meeting that she worries about safety at the airline, given the cost cuts it is making.

Ayer answered that nothing is more important to the airline than safety. Executive Vice President of Operations George Bagley added that, even if Alaska got into worse financial straits, “the last flight we fly will be as safe as any flight we’ve flown.”

Mark Walker, one of 472 baggage handlers let go by Alaska on Friday, said he considers the replacement of those workers with employees from Menzies Aviation “destructive and short-sighted.”

Walker, 37, had worked 15 years for the airline and lost a job that paid $20.80 an hour, he said after the meeting. “My first option is to try to exercise my seniority into an air-freight position in Seattle,” he said. If that doesn’t work, he might look into retraining programs.

“Hopefully I could go into a field where I’m not at risk five years down the road,” Walker said.

Alaska flight attendant Kelle Wells, who is also president of the Seattle local council of the Association of Flight Attendants, also voiced disapproval of management at the meeting.

She said in a separate interview that talks between the airline and her union have run into trouble. Two of three mediation dates this year were canceled by the mediator at the request of the airline, Wells said.

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