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On the heels of historic pilot contracts, one labor group at American Airlines is also looking for a me-too revision to its deal, others will follow.
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American Airlines Flight Attendants Ready to Strike
The headline from this website read: “American Airlines Flight Attendants Want Up To $92/Hour, Plan Strike Vote” this week. Matthew wrote:
“…the union and company are far apart. Under one proposal, the APFA is asking for a:
35% immediate pay increase
6% pay increase in subsequent years
boarding pay
bonuses for international flights and working premium cabins”
To be clear, the $92.13/hour would only be eligible for flight attendants in their 13th year. However, if those FAs were to work a standard 40-hour work week (they may not, but that’s standard for most US employees.) For that, they would earn a base pay of $185,000/year, but wait, there’s more! Because many of those FAs would have seniority, their ability to secure international flights, and premium cabins they would earn even more.
Matthew goes into why this is unnecessary in the above-linked post and if you haven’t had a chance to read it, go do it; his points are fair and reasoned.
I’ll touch on something he mentioned and emphasize it further. He mentions that there are so many applicants that airlines have lower acceptance rates than Ivy League schools but there’s more to discuss. Pilots have been able to secure such great (I have argued “unsustainable”) deals because the barrier to entry for becoming a pilot is high and there’s a pilot shortage. They are utilizing supply and demand, but for flight attendants, the position doesn’t face a shortage so the sole concern for the airline is a temporary disruption of service.
American Airlines Pilots Want Revisions to Historic Deal
Delta Air Lines led the way with its best-in-the-industry deal. American Airlines followed with a deal that stole Delta’s thunder promising up to $600,000 for its top pilots. United recently joined the party and completed its own pilot deal, but now American Airlines pilots want to revisit their newly inked contract.
It didn’t take long, American Airlines pilots can now throw another “bil” on the pile moving the value of the deal from $8bn to $9bn for the entire contract. It’s reminscent of a scene in Succession but I can’t decide who is the airline and who is the APA in this situation (caution, caution, caution, NSFW language, caution).
The head of the APA had this to say just seven weeks after signing the most lucrative deal in the union’s history and for its member pilots:
“Last week, APA President Ed Sicher said in a statement it is “dead obvious” their union’s existing tentative agreement is “woefully deficient by comparison” to the tentative agreement reached by its competitor airline’s pilots.” – CNN
Yet here was his statement when he announced the deal with American in mid-May:
“In a message to pilots a week ago, APA President Ed Sicher wrote, “There are reports that the overall valuation of the contract would be the largest in the history of the airline industry – and they are accurate, as this agreement will be historic.” – Forbes
A deal Sicher described as historic inside of 8 weeks ago, the largest in the aviation industry (not just North America) is now “woefully deficient.”
Matthew described that deal as “obscene” and I described the deal as “unsustainable” assuming that we don’t continue to see quarter after quarter of all-time-high travel demand. Many pilots wrote in to say that the deal seemed fair, but none at the time said it was deficient. Nothing in the industry has changed over the last eight weeks other than United pilots negotiating a better deal.
Other Labor Sectors
What started as a necessry contract revision that was years overdue for commercial pilots reflected a shortage in pilot supply. But now that the wallet of the airlines has been opened, it’s no longer about an airline pilot shortage but a reckoning other labor groups may feel they are due.
They could be right.
This site covered the mechanics labor struggles specifically with American Airlines for years, but baggage handlers, counter staff, reservation agents, and even middle level executives may make their voice heard. North American airlines have little position to turn down these groups as they have shown that they will negotiate nearly any deal to continue to operate air travel. Consequences be damned.
When Will It End?
These me-too deals will have to stop at some point. Should Delta be worried that they need to revise their agreement up too? Flight attendants for American may get their deal, but then United, Delta, and Southwest Airlines will face the same challenges. With such huge increases based initially on demand for pilots, how can carriers in the United States continue to sign these deals and remain in business to pay them?
Further, yes there is record profit for carriers, but there’s also record demand. When demand drops and these other labor groups add in their deals as well, is it not obvious that carriers will struggle not only to remain profitable but to remain solvent if a pullback is substantial enough?
What then happens to these deals if the carriers can’t pay for them? Do they not become insolvent and get broken up in bankruptcy court? All of the gains received disappear under reorganization so does it not make more sense to achieve a deal that doesn’t place as much pressure on airlines to perform when this has been a challenge during slow periods in the past?
Conclusion
Labor groups watching the pilot negotiations have started to speak up about their own contracts. It will only be a matter of time before each labor group is angling for their own “historic” deal but at some point the gravy train has to end. It may be at the negotiation table, or it may be when the travel industry demand slows and airlines are left holding the bag. Some of these increases might be overdue, but airlines largely took heavy losses during COVID, so it seems fair that now that demand has returned, they should recover some profits. Only time will tell what happens in these many labor groups, the only question is whether that will be years… or another seven weeks.
What do you think?
