MIRAMAR, Fla. - The low-key remembrance of the Sept. 11 terrorist attacks were a stark reminder that its aftershocks are still being felt and among the hardest hit has been the nation's airline industry. Still reeling and attempting to recover, several airlines have filed for bankruptcy protection more than once, thousands of layoffs continue, hubs are downsized and fliers who used to enjoy free services such as meals and customer service are now being nickeled and dimed as carriers look for ways to recoup their losses. In the midst of it all are the handful of credit unions that are tied to airlines. Once upon a time they touted their strong and perennial ties to their airline sponsors. Now they're having to reassure members that they are indeed separate entities and their money is safe despite the sponsor's financial troubles. And, they're thriving. The $1.8 billion Eastern Financial Florida Credit Union is a shining example that there is life after single sponsorship roils. It survived the demise of its original sponsor Eastern Airlines more than a decade ago, changed its name from Eastern Airlines Employees Credit Union and now serves more than 183,000 members and 900 select employee groups. "Our mission is to become a one-stop financial services provider, offering an array of products and services that meet the dynamic needs of our growing member base," Steve McGill, EFFCU president/CEO has said. With a 10.51% net worth ratio as of June 2004, it is considered "well capitalized" by NCUA. In its first month of offering member business lending this year, it generated more than $2 million in loans. Georgia's largest credit union, $2.5 billion Delta Employees Credit Union (DECU) is reassuring its members that it has no intention of changing its relationship with its troubled sponsor, Delta Airlines. On Sept. 8, the nation's third-largest carrier announced it would cut up to 7,000 jobs over the next 18 months. As press time, the airline's pilots union urged its negotiators to reach a deal with the carrier to prevent even a larger number of pilot walkouts which could lead to grounded flights and push Delta towards bankruptcy. A DECU spokesperson continued to offer no comment but the credit union's Web site said based on what has occurred in other bankruptcy cases, Delta's policy of sending direct payroll deposits should be unaffected by a bankruptcy filing. US Airways Group, Inc. the seventh-largest U.S. airline, filed for Chapter 11 bankruptcy protection on Sept. 12 after failing to reach a deal with its pilots union on concessions. Industry watchers expect a large number of pilot retirements soon. This is the second time US Airways has filed for bankruptcy protection, initially filing in August 2002 and losing $2.1 billion following the 9/11 attacks. It emerged from bankruptcy in March 2003. The $607 million US Airways Federal Credit Union had a strong advantage to having President/CEO Joe Cirelli at the helm. Cirelli, who has held the top spot since 2000, has been with the credit union for nearly 36 years. He will retire on Oct. 1 (See related story on page 3). For more than three decades, he's watched the ebb and flow of the airline industry and in the early 1990s, the credit union made the trailblazing decision to bump up its select employee groups as carriers were either merged or fell by the way side. "When the airline industry declined, we had the vision to expand our membership and get into SEGs," Cirelli said, adding that US Airways FCU actually began adding SEGs are early as 1979. In recent years, the credit union merged four small credit unions into its fold bringing thousands of members. While the assets have been less than $3 million each, unlike smaller SEGs with 40 or 50 employees, they could literally bring in 1,000 members overnight. Being the largest credit union in Western Pennsylvania makes it an attractive suitor to smaller credit unions who are seeking to merge with a larger one for members to have a wider array of services, Cirelli said. Sometimes a name change can make a difference. The former United Airlines Employees' Credit Union changed its name to Alliant Credit Union in 2002, began adding SEGs in 2003, hired David Mooney as new president/CEO that same year, and today has more than $4 billion in assets and 170,000 members. Mooney said the name change was inevitable as its main sponsor, United Airlines, like other carriers, was being financially hammered after the 9/11 attacks. The nation's number two carrier is still in the midst of bankruptcy protection and at press time, had stopped payments to its pension plans. "I expected more distractions" with the name change, Mooney said. "It really told me a lot about the culture (here) because the employees were committed. There is no contrived behavior woven into a corporate or leadership slogan. It's real." Mooney said the credit union will continue to concentrate on adding relatively small SEGs, a move that has been consistent with its history. Its success as the nation's seventh largest credit union is strongly tied to high member loyalty, which is reflected in high average loan and share balances. Disciplined spending, cost effiencicies and exceptional personal service have also resulted in member retention and expansion. Wings Financial Federal Credit Union changed its name from NWA Financial Federal Credit Union to spread its wings from long-time sponsor Northwest Airlines. Northwest Airlines recently joined a nine-airline alliance in hopes of easing competition from low-fare domestic rivals and expanding its route network in more than 130 countries. Since 9/11, the carrier has lost $23 billion. Meanwhile, the $1.5 billion credit union has partnered with AirTran Airways and is actively seeking out other relationships afforded through its trade, industry and profession (TIP) charter. President/CEO Paul Parish has said the charter will allow members to access a plethora of brands in the future. The $4 billion American Airlines Credit Union was also granted a TIP charter last year but President/CEO John Tippets views the expanded FOM opportunity as a "small, incremental change." "We've always worked hard at maintaining the positive relationship we have with American Airlines," Tippets said. "In the last three years, with the difficulty the airline has been going through, we've been able to do more for them now." By offering work-out loan policies to laid off American Airline employees, hiring them and developing a check card for special assignment airline employees shortly after 9/11, the credit union has reaped the benefits through loyalty and good value. Tippets said the credit union has also managed to grow through running a lean shop. Had it gone into the last three-year period with high operation costs, "that would have been painful." American Airlines was on the brink of filing bankruptcy 18 months ago. The credit union has seen more member delinquencies and bankruptcies in its 68-year history. Tippets said. Still, with all the strain affecting the airline industry, credit unions that count their employees among their members must stay on track. "Stay true to your core," Tippets explained. "Substantial changes in field of membership or products and services beyond what you know well will likely be expensive and unsuccessful in the long run." Continental Airlines has the distinction of being the only airline ever to file for Chapter 11 twice and emerge both times. The $187 million Continental Federal Credit Union didn't receive any notice that its main sponsor had filed for bankruptcy in 1983, said Gary Swensson, president/CEO. "The shutdown came as a surprise to everybody including Continental's employees," Swensson recalled. "It was a scary time." Indeed, the credit union had strong umbilical ties to the airline: the carrier provided Continental's payroll, benefits and retirement plans. The credit union had to act fast by putting together a human resource plan, bringing in large amounts of cash, doing away with withdrawal limits and extending evening and weekend hours. Continental's last payroll check was not negotiable but through negotiations with the airline, $10 million was put in a fund at a local bank that would allow the credit union to pay members their wages. Today, Swensson says members remember the hoops Continental jumped through to reassure them and employees that their money and jobs were safe. The credit union, like others airline CUs, have been rewarded with their loyalty. "People remember when times are tough," Swensson said. "It may be as easy as skipping a loan payment for a month or two." Swensson also says since members have been down this road before, their bankruptcy disaster plan is firmly in place. Still, there was some discussion on changing Continental FCU's name back in 1983. "It's been a good identity for us," Swensson said. "We're not interested in disassociating from the airline." The $140 million Southwest Airlines Credit Union is in a different place as its sponsor, Southwest Airlines, is beating its competitors single-handedly. It remains to be seen how $256 million FAA First FCU's membership will be impacted now that several airline credit unions have TIP charters that include Federal Aviation Administration employees. Most airline CEOs agree that their lot is a unique one. TIP and community charters will continue to be bandied about. Others may explore name changes in an attempt to attract a wider FOM. Whatever the strategy, some risks are inevitable. "In any business, excessive concentration can be risky," Mooney said. "In the late 1990s, we had the winds at our backs and we prospered. When that cycle changed, it got our attention. It's just not in the interest of members to be exposed to a single industry." [email protected]