American Reaches Tentative Agreement With Its Mechanics

American Airlines has finally reached a deal with its mechanics. The association of unions representing mechanics and fleet service workers has shared the basic outlines of the agreements. Here is the mechanics’ deal.

US Airways mechanics and legacy American mechanics were represented by different unions, and instead of picking one union the two groups decided to work together in an ‘association’. Each work group had different priorities, making it difficult to come to a deal. Overgeneralizing a bit:

  • Legacy American Airlines mechanics were largely interested in the amount of outsourcing of maintenance work the airline would be allowed to do (American outsources less than Delta and United).
  • Legacy US Airways mechanics were interested in keeping their more generous health plan, rather than being folded into the plan the rest of the company has.

Since no joint contract had been achieved, each work group kept their own separate work and the airline’s 2013 merger still isn’t complete. 2019 was a long, hot summer with the airline’s operations melting down amidst a work slowdown by mechanics.

So what did American agree to? The details are still being worked through, and comparisons to existing deals will need to be made, but roughly it appears that:

  • US Airways mechanics largely keep their separate and generous health plan for the next 5 years. Other work groups are going to want special treatment on health insurance.

  • American agreed to 10% profit sharing on the first $2.5 billion in profits, 20% (!) above that, compared to their current 5% profit sharing plan. That’s something we can expect other work groups to get then as the airline negotiates with pilots and flight attendants this year.

  • Job and base protection. No current worker has to move or lose their job. There’s defined minimum levels of work for union members. I’ll have to compare the minimums to the current contract to see how much outsourcing American will be able to do.

Between raises, signing bonuses, and at least a transition period to keep existing health policies for US Airways legacy workers this is a really generous deal. Mechanics had little reason to accept anything that wasn’t, and certainly not to give ground on scope protections without a lot of money from the company.

Fleet service workers actually bring more cities in-house (less outsourcing).

Union members will still have to vote on the contract. I suspect this was the best deal available, that this summer’s disruption helped get it for them, but that the judge’s restraining order against further job action brought expectations back down to earth.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. What this means is that American will still be a mess and they’ve kicked the Armageddon can down the road five years, which by that time current leadership should be out on its ass. What a train wreck of an airline. They make United look good. Real good.

  2. So just the mechanics get 10-20% of profits? After pilots, crew, and ground crew get their piece then there won’t be any left for the shareholders. I’ll short this stock.

  3. Shareholders have gotten theirs for the last few years while the employees have gotten crumbs. We move this airline so that you can enjoy the rewards as a shareholder. It’s incredibly distasteful for you to sit there and say such remarks without and regard to the employees and their families over your greed.

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