American’s mechanics have played a role in the airline’s subpar operational performance this summer but it’s only one small piece of the puzzle.
The lack of a contract between the airline and its legacy US Airways and legacy Aemrican mechanics and fleet service workers groups means the merger still isn’t completed, and they’re not fully able to capture merger efficiencies even nearly six years in.
Management seems to have messed up some in the negotiations, fronting some of the raises mechanics will get without the need for a new contract. They may not be offering enough to get workers to agree to ‘scope’ provisions the airline wants (more outsourcing). And the workers themselves haven’t come together in a truly unified front, still represented by their own unions as part of an ‘alliance’ and each set of workers has different priorities (US Airways mechanics don’t want to be migrated over to a less generous health plan).
Ultimately though the union wants to preserve its size and strength, which has more to do with future negotiations and future members than with current ones. At legacy American, represented by the TWU, the average age of a mechanic is mid-50s. The airline has insisted they’re offering “job and base protection” so that everyone keeps a job in their current location.
In some sense the fight over whether or not American can do things like more maintenance on the ground by its own (non-union) employees in Brazil, while aircraft sit there all day, is about the future of the union mechanic at U.S. airlines.
U.S. Airline Maintenance is Safe, Period
The American Airlines mechanics unions make the case that outsourcing is dangerous. They focus on foreigners but of course much outsourcing goes on in the U.S. There’s simply no data to suggest that outsourced work is less safe, there are simply anecdotes on both sides. Does anyone think Qantas is an unsafe airline because work is done in Australia (and elsewhere) and not the United States?
- American’s own domestic maintenance facilities have had their own reported issues (such as this and this).
- Domestic outsourcing facilities have had their issues too (such as American’s Boeing 737 retrofit issues earlier this year).
Maintenance work needs to be overseen properly, work needs to be checked, that’s true whether the work is performed in the U.S. or abroad, by union members or non-union workers. The safety record of U.S. airlines suggests this is exactly what’s happening.
One worry over requiring maintenance work to be done by union workers domestically is that high cost maintenance is what airlines might try to avoid. For safety’s sake maintenance needs to be affordable. Lower cost quality maintenance allows an airline to consume more maintenance.
American Does Most of Its Work In-House, What’s All This Talk of Outsourcing?
American Airlines outsources far less than United and Delta do, and that should remain true even if the company gets its way in a final contract. So American is hardly the ‘labor bad boy’ here.
Ted Reed writes about maintenance outsourcing levels at different US airlines:
- Hawaiian 75%
- JetBlue 74%
- Southwest 52%
- Alaska 49%
- Delta 43%
- American 33%
This data is from last year and pre-dates the most recent Southwest mechanics agreement.
Over Time There’s Less and Less Work for Legacy Airline Mechanics to Do
Engine maintenance, which is materials-heavy, is driven at many airlines by the manufacturer (‘power by the hour’ agreements). Many carriers only do line maintenance at their hubs. On the whole smaller airlines outsource maintenance, and many that lease all their planes lack significant maintenance capabilities entirely.
European carriers outsource maintenance too for instance Lufthansa does work in Eastern Europe and the Philippines.
Newer aircraft have longer heavy check intervals, meaning less maintenance work. Composite materials in the latest generation of planes mean less work too (no metal airframe corrosion). The same is true resulting from more electronic components replacing mechanical parts. That’s materials replacing labor.
Inspections can be increasingly done by computers, replacing error-prone people. People have to supervise machines, but the number of people and type of work changes.
The legacy U.S. airline mechanic, doing soup-to-nuts work in house, is becoming increasingly a rarity.
Delta is Chasing High Value Work: Their Outsourcing Benefits Employees
When American management points out that Delta does more outsourcing misses the point, Delta is providing good jobs for its mechanics over the long term because they’re doing high value maintenance in house, and growing that portion of the business turning maintenance into a profit center by doing work for other airlines. Meanwhile they outsource lower value work.
Delta expects to grow its maintenance business by $1 billion a year over the next 5 years.
No doubt unions would prefer all work done in house, meaning more people on their rolls, but for existing employees taking low value work of their plate and giving them more high value work to do is what allows them to earn more. Ultimately fighting to do low value stuff in house is going to be a losing battle, you can’t have 55 year old union workers doing all your de-icing.
The World is Changing and That’s Where Friction Comes From
The TWU and IAM at American are fighting a rearguard action to (1) protect existing jobs, and (2) preserve union strength and numbers for leverage in the next contract. But without a vision for higher value work to be insourced from other airlines, there’s just not going to be as much high value work to do and they’re too expensive for the lower value work. That’s management’s fault, but with the current business plan it’s probably inevitable. So the best mechanics can do is base and job protection for the current group.
There may not be enough money on the table to get a contract done. The airline suing its mechanics, if they obtain damages, could be leverage to push through a deal. In the meantime we see friction, but it’s the friction that is a microcosm of a transforming economy. Airlines are one of the last few private sector union strongholds, but likely aren’t immune from changes in the world.
The trend is for high value work to be done in house, and lower value work to be outsourced. That’s a trend that union mechanics aren’t going to be able to escape. Legacy American Airlines mechanics are in their mid-50s on average and are being promised job and base protection, so the fight is really about future workers.