American Airlines and flight attendants go back to mediation in Washington, D.C. next week for what the union characterizes as a “last ditch” effort to avoid a strike. The Association of Professional Flight Attendants is telling crewmembers to “prepare for” a strike, and there’s certainly a looming threat and with negotiations dragging on that threat becomes more real. But for now it appears mostly posturing, and a deal seems likely.
A Deal Between The Union And Airline Seems Close
I’ve written over the past six weeks about the gap between American Airlines and flight attendants narrowing. American was already offering, effectively, the ‘Delta deal’ and Delta gave a raise so American increased its financial offer. Meanwhile, flight attendants lowered their ask.
Southwest gave its flight attendants retro pay and a big raise. American flight attendants want full retro pay to cover missed raises since January 2020. There’s going to have to be a signing bonus of some kind to get flight attendants to vote for a deal.
Flight attendants have been ‘cherry picking’ pieces of the Southwest deal and Delta pay, asking for the best of both, but ultimately there’s a cost to have flight attendants on planes and American will pay total cost at the top of the industry but can’t pay the highest parts of each deal. Southwest hours are calculated differently than American’s and Delta’s, meanwhile Southwest doesn’t do boarding pay like Delta does and American is offering (this would be the first unionized cabin crew group to have pay start during boarding time).
Union President Julie Hedrick tells Ted Reed, “We have made progress. We’re down to a very few issues left on the table.”
A Strike Won’t Benefit Flight Attendants (Much)
The threat of a strike is leverage for flight attendants to get the best deal possible from the airline. Actually striking costs flight attendants real paychecks that they can’t afford to lose (and their union lacks the deep pockets to cover much strike pay).
Meanwhile, American Airlines is already offering to pay top of industry wages. There won’t be flight attendants anywhere making more. If American were financially stronger, they might agree to pay even more knowing that,
- United is also negotiating with its flight attendants, and United would need to match
- Delta would need to match or more to forestall the current unionization drive there
In other words, American might spend more to drive up costs at competitors. But they’re less able to incur those costs now than competitors.
American needs to keep flying, sure, but in the long run can’t afford to pay more than the most that competitors pay in wages. Meanwhile, every day of delay in getting a new contract hurts the most vulnerable flight attendants most – first and second years in expensive cities. While everyone’s wages have been eroded since the last flight attendant raise in January 2019, for them it means having dipped below poverty level.
A big raise is on the table now, a delay won’t change the pay package much, so using the threat of strike makes sense but actually incurring the pain of a strike for little incremental gain may not.
Book Any Late July/Early August Travel Early
If you want to hedge risk of a flight attendants strike, you’re going to want to book travel on airlines other than American for late July and early August now.
If flight attendants strike – if they even threaten a subset of flights each day – customers are going to be avoiding American. All of the travel demand that normally flows to American will be competing for seats on Delta, United and Southwest (and to a lesser extent Alaska, JetBlue, Frontier and Spirit).
A strike basically takes American Airlines capacity out of the market, so all the travel demand bids up the price of flights – and especially last minute flights – on other airlines. A flight attendant strike can be expected to raise airfares substantially on other carriers.
So if you think a strike is reasonably on the table, you should buy your other airline travel in early July.
What Happens If There’s An Impasse?
The National Mediation Board doesn’t want to declare an impasse in negotiations, starting the 30 day “cooling off period” clock that would allow flight attendants to engage in “self-help” (strike).
- A majority of the board was appointed by President Biden
- A strike puts the President in an impossible position
President Biden is five months from a tight re-election. Price levels are already a big issue in the election (and voter frustration broadly). Spiking airfares are bad for the President. Harm to the economy from shutting down American Airlines is bad for the President.
Additionally, the President has the power to order airline strikers back to work. President Clinton did it to American’s pilots. He also pressed American and flight attendants to agree to binding arbitration. Voters inconvenienced by a strike will be angry at the President for not acting, and some will take it out at the ballot box.
At the same time, the President does not want to send strikers back to work. He doesn’t want to press flight attendants to agree to a deal they’re unhappy with. Union support is important to the President (even more important than Dearborn, Michigan).
And while the Mediation Board doesn’t officially do the President’s bidding, putting the President in an impossible situation isn’t a way to get appointed to future positions by Democrat Presidents either.
The Mediation Board is likely to look for any reason not to declare an impasse, but the more they kick the can down the road the less likely an impasse becomes because the closer to the election we get.
Still, if one does get declared there’s still at least 30 days to do a deal. And the union doesn’t even have to strike after that. They can engage in a job action at any point after that (the company could also ‘lock them out’ and stop paying them, and in either case bring in replacement workers like British Airways did 14 years ago to break its flight attendants union – though in American’s case I do not expect this in the immediate term, though it might have been smart to prepare for it).
A Strike Seems Unlikely
The parties are close. Neither one benefits from a strike. And the President certainly doesn’t want one. While negotiations can take on a life of their own, the base case remains that a deal can be found when it’s in everyone’s interests to get a deal done.
After that, of course, the deal will have to be sold to rank and file members of the union. That may not be an easy task after the union promised members more than they’re now asking for. But if the contract fails – as the last one union members voted on after the US Airways merger did (!) – the parties would just be back at the bargaining table, not facing down a strike again right away.
AA flight attendants are in line for a big raise plus boarding pay. They need to grab this deal asap and start collecting these higher wages now.
First attendants need to accept reality and lower their demands. AA can’t afford to pay what Delta or SW is paying. I’m not saying the FAs don’t deserve the same salary as other airlines but with all the recent operational mistakes at AA they simply don’t have the funds. The time to have gotten this done was a year ago before the current financial problems and there was still optimism at AA.
I put the odds of a chapter 11 filing (to lower lease payments, get take a haircut on debt and lower union wage agreements – all of which can and will likely happen in bankruptcy court) at 50/50. To me AA is in a very precarious position that is well behind DL and UA without the cost structure of the ULCCs or the loyalty (which I still don’t understand) that SW can instill in many of their passengers. Tough to be the odd man out but that is what AA is right now. I live in an AA hub (CLT) so wish they were stronger but they aren’t. I do have flights to DFW and PHX booked late July and early August so will just have to roll the dice. Luckily I’m retired and they are golf/gambling trips so no big deal to me if they are disrupted. My next major trip is 2 1/2 weeks in Europe in October and I’ve booked the positioning flights (to IAD and home from EWR) in UA first class.
AA needs to start putting management and and other volunteers through fa training now.
“…the company could also ‘lock them out’ and stop paying them…”
Yes, the option that should be employed more often. In a society that honored and supported individual rights, most of these labor disputes would be resolved quickly.
Lock them out, start fresh with young, eager hires…unless they will agree to a mandatory retirement age of 40. They are just there for safety, don’t you know! What’s an elderly woman going to do to save a 300 lb sweaty man stuck in a middle seat?
The real factor to watch is retro or bonus pay. I am betting that all of the delays ultimately will have cost AA FAs substantial income that they will never recover. Playing hardball only works if you will win – and it was clear that AA FAs would never gain what they were seeking for most of the negotiating period.
And DL FAs simply don’t need to see increases beyond what they are already getting; DL raised their pay multiple times while union FAs argued.
And UA FAs will pay the highest price because they do have the money to pay retro and they have been quiet throughout the whole process. They full expect to top AA FAs and get the retro equivalent to pay that DL FAs have already been given.
Given that UA just said it is slowing hiring due to expected slower growth, the current employees will want to get their share of revenue; it wasn’t their fault that UA had an aggressive growth plan that was never going to be possible.
@Mantis says, “Lock them out, start fresh with young, eager hires…unless they will agree to a mandatory retirement age of 40. They are just there for safety, don’t you know! What’s an elderly woman going to do to save a 300 lb sweaty man stuck in a middle seat?”
Are you proposing that American Airlines hire only flight attendants who agree to a mandatory retirement age of 40 because you are concerned that an elderly woman cannot save a 300-pound sweaty man stuck in a middle seat?
Your proposal is not an essential job mandate. It seems unreasonable that American Airlines would adopt an age discrimination job requirement that flight attendants must retire when they are 40 years old and demonstrate an effective rescue of a 300-pound person stuck in a middle seat regardless of whether or not they are sweaty. Across the world, firefighters, pilots, doctors, armed forces service members, and many other employees in safety-sensitive positions are working after they are over 40 years old.
Good to see those red lanyards, pins, bag tags, and sidewalk chants are inching them along.
Flush the AA toilet and let it waller in its own excrement. The ONLY thing that the AA union wants is to feather their nest. The only thing that AA management wants is their fat salary. Who at AA gives a damn about the CUSTOMER that puts up with this crap?
Holy cow Timyboy pumping DAL??? What a surprise!!
The reality is that since UAL reported 1Q results, UAL has gone up 21% more than DAL.
A lot of riskless money you left on the table Timmyboy. I’ve been telling you all along but you didn’t listen.
Now Timmyboy, did you listen to Bastian saying 2 days ago that international is much stronger than domestic? Do you know by any chance which carrier is by far the biggest international carrier? Bigger internationally than all the others combined?
Get ready for 2Q results and 3Q guidance Timmyboy, because Scott is gonna kick your ass again. The 21% is just the beginning. UAL will be the airline with the fastest growth and highest profitability. No refinery gimmick from DAL will be able to hide reality.
There’s a new sheriff in town. His name is Scott Kirby and he’s gonna tell Bastian “hasta la vista amigo”.
stop being so childish, marco.
UAL is still worth just 60% of DAL as a company and UAL stock is up a fraction of DAL stock over the last year.
Wall Street continues to expect UAL to perform much better than it does but it never seems to happen esp. because UAL manages to lose money on one or more of its international networks for one or more quarters of the year.
You do realize that UAL managed to lose money flying the Pacific in the 4th quarter of 2023 and likely will again in the first quarter of 2024?
All of that size doesn’t translate into profitability.
None of which changes that UAL FAs are due for a hefty raise and likely will get retro which will impact UAL’s results.
DAL FAs and all other employees have been paid at higher rates since the pandemic.
Not sure why most of the commenters care what my paycheck looks like because I certainly don’t care about anyone else’s. I guess we’ll see what next week brings. Carry on.
Should a strike be approved FAs immediately gain ultimate leverage. Simple math – if the union is seeking 2 billion more in compensation than what the company is willing to offer , when does it become more cost efficient to agree with the FAs? Last year’s revenue numbers show AA averages about 150m in revenue a day. So about 16 days into a strike the company loses more by not coming to an agreement. FAs fly like 12-16 days a month. It would be very easy to have the entire population take a week or two off.
Here’s an interesting page on the union’s site. The page was privatized but there’s an archived version.
https://archive.is/85alX
@Richard – that math is not correct.
– Leaving aside that the numbers on additional comp are made up
– That additional comp compounds over the life of the contract and is a baseline for the next one
– Flight attendants lose pay during a strike and the most junior ones in Boston already qualify for food stamps
– If American capitulates and has structurally higher costs than competitors, they wind up in bankruptcy. They already earn less and have higher debt.
British Airways flight attendants went on strike and it effectively broke the union. The idea that strikes improve bargaining leverage is silly. Gaining approval to strike is different than actually striking!
Another Aegean flight yesterday ATH-IST. 55 minutes in the air and a FULL meal served in business…..which was surprisingly pretty good.
Know what the flight attendants on a US domestic would have done on a 55 minute flight? Zilch.
We NEED domestic competition from foreign airlines NOW.
They are unlikely to strike by all walking off their jobs, they will likely walk away from some select flights per day – especially in hubs where they believe there is a reserve shortage. Then its not actually about not working, they will want to show they can disrupt the airline and show that to passengers. So if passengers want to get to where they want to go, they’ll choose other airlines (as Gary has highlighted) and this can affect the airline’s revenue for months even with only a few days of striking. The other benefit of this kind of strike is that they can get the most senior flight attendants to walk off the flights (who stand to benefit the most from retro pay) and the junior ones can still get a paycheck.
So I agree with Gary in the most part, however I don’t think the striking will hurt the junior flight attendants as much as he thinks.
You are comparing an international flight by the 16th largest airline in Europe against a hypothetical DOMESTIC flight by the largest airline in the world?
I’m sure American is shaking at the thought of Aegean’s 63 aircraft crisscrossing America.
@MW
I’m comparing a 55 minute flight on an A320 to well……a 55 minute flight on an A320. The destination or even tbe route doesn’t really matter. It’s still 55 minutes in the air. One airline and it’s employees have a desire to provide great service while the other is……..not sure what they’re willing to provide but great service it isn’t.
“ Meanwhile, American Airlines is already offering to pay top of industry wages. There won’t be flight attendants anywhere making more.”
I’m surprised that you don’t have any knowledgeable flight attendants on hand to be able to cross-check these silly claims. If American were to offer their proposed 17% immediate raise effective June 1st – that would match them to Delta, at around $79/hr. Southwest FA’s make more than this today – and before you “buT THEYRE PAID DiFFERENTLEEEE!” – yes – their TFP rate converted to an hourly rate is $89/hr-ish today. AA FA’s would be making $10 less per hour lol.. not sure how you figured “there won’t be flight attendants anywhere making anymore”
@Trina you aren’t adding in boarding pay, and Southwest flight attendants don’t make more than Delta’s when you include profit sharing.
The question of whether a given flight attendant makes more or less at a specific airline will depend on their years of seniority and the number of line hours they hold.
A Delta 80 hour line is going to earn more than a comparable Southwest flight attendant, when including profit sharing and boarding pay.
They really need to file chapter 11 and void everyone’s contract so they can focus on restructuring debt.
GO BANKRUPT…WHO CARES! AA SUCKS!