The President of the American Airlines pilots union favors merger discussions that would have another airline take over the carrier. Three months ago his union rejected declaring no confidence in CEO Robert Isom and sought a meeting with the board, but the board refused to meet.
Now, the union President says he’s taking meetings with Wall Street analysts and journalists promoting their view that:
- American management lacks a long-term strategy
- The status quo is unacceptable
- They’re open to “any path forward” (like mergers) that improve the airline.
We have seen little in terms of vision, culture change, and operational improvements to believe that meaningful positive progress can be achieved in an acceptable timeframe.
This is prompted by United CEO’s public acknowledgment that he pitched a merger – and he “encourages” American’s pilots to read Kirby’s message on how “such a merger would be transformative for both airlines and how it could withstand regulatory scrutiny.”
He says American management keeps asking whether anyone is talking to them about a takeover plan. “That answer is, ‘Yes.'” And he wants American’s board to consider these proposals.
There are a number of motivations for this. There’s a combination of sincere belief that overthrowing management would lead to greater profits, which means (1) more profit sharing under their contract and (2) more resources to clai in their next negotiation, and the pilots union is in the midst of its own internal power struggle and merger battle so leadership needs to look aggressive and confrontiational to their base.
A large faction of union members are looking to merge their independent union with the Air Line Pilots Association. A year and a half ago, a union President who opposed merging with ALPA was recalled.
In other words, the message from the American Airlines pilot union is both true and a reflcetion of its internal politics. But it’s also a problem for the airline, where the water cooler talk of replacing the CEO has died down compared to the fever pitch of three months ago.
And it’s somewhat ironic because the airline seems to finally have a vision and strategy for the first time in 12 years. The CEO isn’t out selling that vision to employees, investors and customers. But the strategy appears to be there – to make investments in customer experience so that customers prefer (or at least do not avoid) the carrier. And it comes at precisely a time that Delta may be faltering.
Can’t blame them for trying, but this seems more performative than anything. (Ooh lala… a meeting with Wall Street… and journalists… that’ll show Isom who’s boss… psh.)
Could be worse. You could still be flying 767s and hitting bakery trucks. Or, you could be failing to operate reliably, and just blame the weather, even when it’s perfect conditions… *cough* DELTA.
Why are the pilots “pussyfooting” around when the flight attendants came out and said no confidence in Robert Isom? If they want change come out and state it!
Robert Isom was never ever the guy to lead American. He has no leadership skills. The classic bean counter if you will.
No to airline mergers. Yes to airline closures and liquidations, allowing healthier competitors to buy what they want (and only what they want) on the open market.
Once again, an industry shakeout is long, long overdue. The longer they wait, the worse the pain will be.
Here’s a path forward: lock out the unions. Hire back only employees that are competent and actually want to do the job. Short term pain for sure, but it’s the only way out of this union death spiral jobs program.
What do I know, but I would imagine that the Board is going to evaluate Nat Pieper over the next ~2 years or so as a potential CEO candidate. Is he leading the AA/Alaska revenue sharing talks given his Alaska / Oneworld background? Even if Isom did not have the Board in his pocket, why would the Board push for a new CEO in 2026? A new CEO today would be saddled with high fuel prices and a 100% focus on debt paydown. Better to announce a new CEO in, say, 2028 when fuel prices hopefully have declined and there’s only a 90% focus on paying down debt.
Alaska should buy American.
@Mantis — You literally abandoned us for Asia. Stop attacking American workers on here.
Unlike DL and WN labor, AA and UA labor have long engaged in attempts at publicly shaming their mgmt when the companies failed to perform to labor’s expectations. As much as some want to argue that being successful doesn’t matter, labor benefits or pays the price depending on how financially successful airlines are.
UA didn’t begin to turn itself around because of labor -mgmt discord but because the board and Oscar Munoz realized that UA needed to change and he set up the company for success.
AA mgmt has come to realize they need to change just as WN has come to the same conclusion. Every other airline is now pushing the same premium revenue strategies that DL developed and UA has copied so far to better success than any other airline besides DL.
AA labor wants the company to succeed more but they surely – if they think for even a nanosecond – know that AA employees would be badly hurt in a merger w/ any other carrier. AA’s underperforming hubs would be shrunk or disposed of while other airlines would swoop in take AA’s best jobs – including its flying from successful southern hubs.
APA can’t be taken seriously against a lot of people in it wanting to merge w/ ALPA; throwing in a merger with UA as a good idea shows that it is actually AA mgmt that has a far more credible plan to get the company and its employees back on track.
@Tim Dunn — Speaking of DL labor, the flight attendants, baggage handlers, and maintenance technicians should join Delta’s pilots (since 1934!) and dispatchers in organizing. It’s not great to be ‘at-will’ during a downturn; with all the recent disruptions, non-union crews have to book their own hotels and transportation. Sure, Delta may pre-emptively raise pay to discourage unionization, but let’s see how long that lasts. You can enjoy profit-sharing and the additional benefits and protections, too.
A merger! A name for the new entity: Unamerican! Catchy!
of course, 1990
so they can get into the same pi78ong match that the two are engaged in over staffing?
DL raises pay for union and non-union workers because they can afford to do so and because they can see a clear connection between higher pay and increased revenue.
Do you know that DL gets more revenue per employee from their workforce than any other US airline – and by a pretty wide margin? It is precisely why DL is able to keep raising pay and put pressure on other airlines.
DL non-union labor have nothing to gain from becoming unionized.
AA labor, OTOH, desperately wants to get even half of the financial gains that DL employees get – but the same is true of UA employees.
Kirby is just a better cheerleader in convincing UA employees how good they have it so they don’t act out the way AA employees do
@retard
Do you ever have anything interesting or relevant to say about me outside of my present location? Such a boring and slow witted stand to take on a travel blog. Many here will live abroad for some years, it’s not renouncing my citizenship, you dullard.
@Tim Dunn — Money does matter. The 4% pay raise (starting June) is good; the $1.3b profit sharing is also good. Yet, transparency, scheduling, representation, and other benefits and protections matter, too. Without unions and the rules they fight for, internal company portals that can be updated without notice (think, seniority, transfers, and holiday pay). Pilots and dispatchers know this; I think it’s only a matter of time before the rest realize it.
@Mantis — So, you mentioned Grab, recently… so, you in Singapore, Indonesia, Malaysia, Thailand, Philippines, Vietnam, Cambodia, or Myanmar?
Unless one of the US3 ended up in Chapter 11 there will never be a merger between the US3. It’s just worm food for people on travel sites to obsess over.
@George Romey — Better or worse than a Wawa sandwich?
@Mantis – Just ignore him. I’ve been having a *much* better experience on this blog by doing so lately. Also, I am a (former) fellow Asia expat. It was an awesome experience, and made me far more patriotic, not less so. He’s clearly far too stupid to understand that expatriation has absolutely nothing to do with whether or not you love your native country. My guess is that he’s a dumb flight attendant living in his mother’s basement… but really, who cares? He is worthless and meaningless, and his opinions mean less than nothing.
I fly AA in and out of PHL about 25 times a year. I have been about a harsh a critic of AA over the years as anyone.
I must say that in the past year they have gotten better. My last flight a week ago was the first delayed flight of mine in months. They were transparent about the timing and reasons for the delay from the very start.
As an unasked for surprise they gave me 2500 miles as compensation.
1990
you continue to trout out your union and socialist fear mongering despite the fact that DL employees have consistently ranked their employer higher than any other US airline and in the upper tier of all US corporations.
Further, a 25 year DL FA has had 3 opportunities to vote for a union and have rejected it every time.
There simply is no evidence that DL’s non-union employees are being negatively impacted any more than any other airline employee for all of the things you claim they lack.
and, specific to this discussion, AA employees – just like UA employees – have repeatedly acted out because the company underperforms and it does impact employees. DL employees benefit from DL being well-run.
AA pilots are grasping for something to fling at the company but any threat of supporting a merger with UA is just foolish
@Mike Hunt — If you hate your fellow citizens, how can you say that you love your country?
@Tim Dunn — It has been socialism for the wealthy and corporations for a while now; however, it’s been rugged individualism for everyone else, and they aren’t enjoying it. Like I said, I think this next downturn is going to remind the non-union workers at Delta why the pilots and others have theirs. As for AA, you saw in my first comment, I said: “this seems more performative than anything.”
your generalizations might be correct but you can’t accept that DL workers have had more opportunities to vote for unions than practically any other American workers but have rejected it
and then they have turned around voted their company as one of the best to work for.
The sooner you accept that DL might or might not do some things well but their HR strategies are what not only the vast majority of American workers would die to have but also many companies wish they could succeed at.
AA and UA have long had contentious labor relations – in opposition to what DL and WN have. DL just happens to be heavily non-union while WN is heavily unionized which proves it is how the company is run and how it sees its people more than anything else.
The Pilot’s union and Flight Attendant’s union supported the last merger with US Airways which has not worked out so great for AA. Why does the union thing it will be any different with another merger?
@Tim Dunn — I’ll accept a ‘might be correct’ from you. Actually, that’s ‘high-praise.’ I’ll return the favor by saying how much I personally enjoy when things go well while flying with Delta, whether mainline or even wholly-owned subsidiary. Sure, that may be anecdotal, but I think it still counts. (And, yeah, I’m no longer a Diamond, but still proudly a Platinum. Gotta put those RUCs to good use!)
I know @1990 won’t agree with me on this however IMO they have reaped what they have sown by going along with Parker rather than staying with Horton. Horton did an incredible job during the BK process and was responsible for AA’s deals with Boeing/Airbus for their single-isle replacement.
I remember even the head of the APA at the time was bragging about it. I had mentioned in my now-defunct blog back then this will come back to haunt them eventually.
@jacobin777 — I don’t necessarily disagree; I mostly just can’t stand those that want to get rid of organized labor wholesale. Sure, there should be differences of opinion, strategy, etc. There’s always gonna be a balance to be had between capital, management, labor, consumers, etc. Lotta stakeholders here, not just shareholders.
After the pilots union effed up huge by bringing in Parker and the rest of the ULCC stooges in the last merger I would think the pilots would have learned to stay the hell away from trying to play kingmaker.
If AA was to merge with another airline, being taken over by Alaska would be by far the best choice. Unlike American, Alaska has capable competent leadership.
The president of the APA has no say in mergers.
He wants a merger for one reason and one reason only. More money for members.
No one will buy AA for the purpose of paying pilots more
While Isom is indeed an idiot with ZERO leadership skills a merger with UA is not the answer for turning things around at AA. I don’t know what the pilot union is thinking.
Spectrum boy is scared it seems.It was inevitable given DL’s multitude of failures finally reported in the media over the last weeks. Very sad to see, but predictable thus the AA fire now in its posts.
@1990 – I’m not the biggest union supporter however I support the Boeing unions. Previous Boeing management really did a “number” to the company. They made so many mistakes its disgusting yet they walked away with tens of millions of $$$$ in salary, compensation, etc.
Quite sad.
Of course, there should be some balance between the various stakeholders (be it employees, bond holders, shareholders, etc.). I agree on that.
Unfortunately, that’s not how Wall St. has operated the past number of decades.
@jacobin777 — Lately, yes, Boeing is both enraging and sad. An ethical crisis. Short term profits over people, at every turn. The company should be case study in corporate greed, preventable death, and systemic corruption. Yes, especially over the past decade, I do wish their workers were more empowered, specifically to challenge overpaid executives who ignored safety and punished whistleblowers. Over the past two years, thanks in-part to the IAM union, the strikes in Seattle, Missouri, and Illinois did lead to increased wages (~40%), but there’s more to do on retirement.
We just lost a low cost carrier with Spirit. Will we see fare increases? Yes, at least in some markets. If this merger is allowed, we won’t see fares increase in some markets. But, you can take this to the bank. We will see fares skyrocket in most. That’s what will happen if you control 40 percent of the market.
@1990 – Well said. The problems really started with the Boeing merger where Boeing people were no longer running things. The MCD people effed everything up bigly for a quick buck. Look at the results: the 787 that still has problems to this day, the 737MAX with hundreds of deaths to its credit, and the new 777 that’s running a half decade behind so far. That’s what you get from crappy shortsighted management.
as long as fuel remains elevated, DL will have an advantage over its peers
Larry,
it’s not remotely realistic to think that AA and UA could merge as they currently exist with any of the other big 4.
and those that think that UA was just blabbing to justify a bid for B6 might look at the route additions that UA and B6 are doing to each other.
B6 added ORD and IAH to FLL; UA just added LAX-FLL.
This doesn’t seem to following the script for those that are convinced that B6 and UA are chummy buds that are setting up for B6 to be acquired by UA.
United / AA merger would never be approved … certainly not before the midterms (too risky), and the after the midterms when the Dems hold the House, its DOA.
@Tim Dunn – “as long as fuel remains elevated, DL will have an advantage over its peers” the refinery? meh. It’s a countercyclical asset, but it’s just one out of a portfolio. Delta is exposed to Virgin Atlantic and Aeromexico and Korean and… not to mention those super fuel-efficient 767s…