Why American’s Operational Problems are About More than a Mechanics Slowdown

The American Airlines – US Airways merger still isn’t complete. Their mechanics and fleet service workers are on two different contracts. And even though the airline is able to send US Airways planes to fly former American Airlines routes with a mix of pilots and flight attendants from either former airline they’re still running as two separate airlines when it comes to maintenance.

They’ve negotiated for some cross-fleeting of maintenance work between the US Airways and American Airlines labor groups, but that’s limited.

The merger of the two airlines was supported by its unions. US Airways workers would generally get raises coming up to American Airlines levels of pay. Why American Airlines workers wanted the US Airways management team to come in, though, was always a mystery (beyond mere resentment of legacy management).

US Airways management was never good with labor. The US Airways and America West pilots never managed to get a joint contract after the merger. Legacy America West pilots were still paying a monthly fee to access their scheduling system even by the time US Airways and American merged, for instance.

We’re already on the cusp of pilots and flight attendants union contracts becoming amendable again, but no contract has come into place for the airline’s mechanics.

  • The mechanics didn’t form a single union. Instead they’re represented by an ‘alliance’ of each group’s former unions (TWU and IAM).

  • Each work group has different priorities, for instance US Airways mechanics had a better health plan they want to keep. The airline isn’t going to take the most generous provisions out of each contract and agree to those across the board, but neither work group wants to give up on its priorities.

  • American has the most restrictive work rules of the major airlines. United and Delta outsource more than American does. So when American says they’d happily sign either the Delta or United deals, and that mechanics are going to get something industry-leading that’s true — but also feels like a giveback so they’re not willing to take what work groups at other airlines have taken.

  • The airline made a strategic blunder in giving its workers a pay raise without getting a new contract in return. Now, with a smaller difference in pay than there otherwise would have been from signing a new contract, there hasn’t been enough money on the table to get workers to agree on the differences they have with each other and make concessions the company wants on ‘scope’ (letting non-union American Airlines employees in Brazil do more work on planes that sit on the ground during the day, for instance).

Since the airline hasn’t been able to get a deal done, bad feelings have festered.

So it’s easy to place the blame squarely at the feet of Amercan’s mechanics for flight delays and cancellations. Goodness knows employees groan when they see mechanics come on board an aircraft at this point, rather than appreciating that mechanics are keeping them safe many crew assume they’re just being messed with.

However it’s far from just the mechanics work slowdown that has contributed to the airline failing to meet its operational goals this summer.

  • The 737 MAX grounding has meant 24 planes out of service. The airline reduced its schedule as a result, but this is a fleet that’s also not providing spare aircraft. Meanwhile they’ve continued to retire MD80 aircraft from their fleet.

  • Deferred maintenance catches up with you. Riding the fleet hard already going into summer, in part because fo the ariline’s operational plan but magnified by the MAX grounding, there are simply going to be more (legitimate) mechanical events.

  • The failure to get a joint contract itself, while cross-fleeting, has meant that mechanical delays are longer. Former American Airlines mechanics are limited in what work they can perform on an ex-US Airways aircraft and vice versa. So if a US Airways plane breaks down at an American Airlines station some work requires waiting for US Airways mechanics to fly in to fix it — the contracts don’t allow the mechanics who are already on the ground to do the work. The job action comes into play here as mechanics have been less willing to take these assignments.

  • Failure to supply needed parts where aircraft fly. We’re a far cry from a dozen years ago when US Airways largely warehoused parts in Phoenix to save money and used to have to fly them to Europe when a plane broke down there. However I’ve heard from mechanics about the lack of parts and equipment being stocked at major stations, so they have to wait endless hours to do work that should be completed in far less time.

I’ve certainly written the most about the mechanics slowdown component of this issue. It’s what employees and the company have been most vocal about. But even without that the operation would still be suffering. And the reason to get a joint contract done isn’t just to end the animosity (an odd place to be for a company claiming its culture is its competitive advantage), it will also reduce the friction in getting legitimate maintenance work accomplished — on ex-US Airways aircraft by legacy American Airlines employees and vice versa.

Even so, the airline will have to invest in clearing deferred maintenance items. It will have to stock the parts needed to keep the fleet flying. In the meantime they’re still planning to re-start their domestic narrowbody densification program next year, so they’ll be taking additional aircraft out of service. It may be awhile for the airline’s operation to recover even after they get a deal done with mechanics and there’s little indication at this point that a deal is close. The next National Mediation Board status conference (not negotiations) will be held August 15th.

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 InsideFlyer.com, 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. Let’s correct the record above: The company does not claim “culture as a competitive advantage.” Culture as a competitive advantage is a goal. Doug Parker is very clear that it’s one of the top three strategic goals and also admits, the company has a lot of work to get there. That goal as well as the other two have a number of sub elements to achieve respective overall goals. Much different then years past when there was no mission at all.

  2. @Gary

    AA is also running an *extremely* heavy schedule at DFW this summer. That just adds more brittleness to the system. Heavy schedule, fleet issues, labor strife, that’s just asking for it.

  3. I know it’s a little trite for people who, for lack of a better label, are “anti-union” to bring up ridiculous work rules as a reason for why unions are not good for the economy…

    “Former American Airlines mechanics are limited in what work they can perform on an ex-US Airways aircraft and vice versa. So if a US Airways plane breaks down at an American Airlines station some work requires waiting for US Airways mechanics to fly in to fix it — the contracts don’t allow the mechanics who are already on the ground to do the work.”

    …but I couldn’t have come up with a more ludicrous example if I tried.

  4. Yawn. As I’ve mentioned here several times, if you started looking forward instead of backwards, and simply looked at the publicly-available data, you’d see this “mechanics problem” has been solved (at least for the forseeable future). The Judge’s order has put the fear of God into the union and the AA mechanics are again doing their jobs. AA’s completion factor has been 100% the past 3 days — I don’t believe there was a single day in May or June with that number. Reality is way more interesting, and useful, than fiction.

  5. Gary, I laughed with Chopsticks comment about the completion factor. As I tweeted to you on the 26th, AA flight 2864 should have departed LBB for DFW on 25JUL. However, it encountered a 22hour 33 minute maintenance delay, but by golly they completed the flight. Albeit on 26JUL. As I stated in my tweet, AA has taken a play out of the DL playbook.

    Chopsticks, I’m not laughing at you just the completion rate game the airlines play.

    I will say my 4 flights on AA last week where the best I have had in over two years. The crews where great, flights on-time, pre-departure beverage offered in the premium cabin, etc.

  6. The parallels between American and Amtrak would shock any professor of transportation:
    1) The corporate suite is occupied by arrogant, know-it-alls that have no time or interest to listen to their employees, who are far more knowledgeable than management.
    2) A total lack of stewardship from the Board of Directors who fail to demand accountability.
    3) Providing a (domestic) first class food service that gives crap a good name.
    4) A demoralized, unenthusiastic work force.
    5) Customers attitude pick their service because it’s the only game in town; no real or perceived competition. Amazing how United, and Delta in particular, have not capitalized on this marketing failure of AA; Congress must eliminate Amtrak’s monopoly and inject a healthy dose of private competition.
    6) Corporate officers who could care less about the customer experience, or, reacting to customer input.

  7. @MicharelP — Something goes wrong everyday at every major airline. Last week, Gary noted that Delta — which runs the best airline operation in the world — has a curious habit of tolerating very lengthy flight delays. AA’s ops are still nowhere near as good as DL’s, but they’re now normal. Today is get another day that AA has a 100 percent completion factor (and that’s rounding to the nearest whole number). The mechanics story is over, at least for now.

  8. Maybe my comment as a 60 year passenger is simple:
    1. Long term passengers have lost confidence in the airline!
    2. Profits have become more important than passengers and employees.
    3. Employees appear to have lost pride with their employer and the goals and beliefs the company. This is apparent from ground crew to the cockpit!
    4. At one time the company had an A+ view with the industry and consumer s that Americans planes and maintenance was the best.
    5. When you abandoned your initial beliefs the company began its demise.
    6. Have you looked at the number of longstanding customers you’ve had? How many are now are customers of United and Southwest?
    7. Give the mechanics and other unions a raise.
    8. Make customers and employees feel like family again!
    9. Not a major stock holder but my vote is to send current CEO and like mind management packing.

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