American’s Flights are Back on Schedule, their Pilots Are Negotiating… but Delusional

A month ago, American’s pilots began faking sick to cancel flights, and ginning up last minute maintenance requests and engaging in other tactics to delay flights as well.

When they were the only work group not to come to agreement on a new labor agreement with the airline, voting down the offer that their union brought to them (and leading to an ouster of the union’s leadership), the bankruptcy court went forward allowing American to impose new terms.

The pilots are back at the bargaining table. American has proactively reduced its schedule. And the cancellations have stopped. Yesterday, for instance, there were only three cancellations across the entire American Airlines route network.

On time performance has hovered around 70% — much better but still below average.

This past week the pilot’s union even began talking up how well the negotiations have been going.

While there are some very difficult issues yet to be resolved, we feel management is clearly listening to our issues and acknowledges that they need to be addressed..Enough progress has been made to justify the continuation of negotiations next week.

There’s a tremendous amount of posturing that goes on in these sorts of negotiations. And it’s important not to put too much stock in public statements as though those statements reflect the actual bargaining positions of the parties making them.

The internal politics is complex. The last pilot union head was ousted, the new leadership needs to appear tough to their membership. And they need to make it seem like the pilots are getting something if they’re going to pass a contract.

But these public demands are sufficiently absurd that it makes me worry about the likelihood that negotiations will succeed, even factoring in that I need to not put too much stock in public statements reflecting actual bargaining positions.

The terms the pilots are working under currently are not as advantageous as those they voted down prior to the bankruptcy court acting. The pilots’ union says they don’t want just another bite at the apple they walked away from, and they don’t want anything even remotely like it. Instead, they are looking for:

* Pay rates aligned with peers at Delta Air Lines and United Airlines.

* A contract shorter than the six years American offered last time.

* An industry-standard pension.

* An equity claim in American’s bankruptcy reorganization that can be converted to stock in the new company with “floor” protection.

They want a raise. They want a raise and equity. They want a raise, equity, and a guarantee of what their stock will be worth. And they want a chance to negotiate their gains upward again very quickly.

Good luck with that!

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. […] US Airways and AA are meeting next week to talk more about a merger.  I still can’t tell how I feel about a US/AA merger, but I’m definitely more in favor of it if AA is the dominant management team going forward.  As I’ve written in the past, Doug Parker is unlikely to let that happen without some kicking and screaming.  But, don’t worry, with all this good news, the AA pilots are still out of their friggin’ minds. […]

Comments

  1. Are you a pilot? Would you like someone flying you around that is disgruntled? How about someone operating on you that is disgruntled? I think the opinion of the people from the outside tends to lean towards management of an airline. Those people work hard and don’t forget that these people can save your life in an emergency.

    There will be a major shortage of pilots in the next five years because of forced retirement. So companies should do what they can now to keep pilots.

  2. Give them the whole company then so they arent disgruntled! 🙂 there won’t really be a pilot shortage as there are fewer flights than 3 years ago and more pilots will come out of the military with the wind down of activity in iraq and Afghanistan.

  3. Fewer flights doesn’t always mean fewer pilots needed. There are still duty limits and a certain number of pilots to keep on staff. Military pilots have a long commitment they have to keep with the military. A minimum of 10 years required for pilot training. Many fighter pilots are being forced into drones before they have enough flight time to qualify at an airline as well. I don’t think unions do a good job of helping negotiations, but neither do executives.

  4. This wasn’t an anti-union post. But wanting pay raises, equity, guarantees on that equity (American to hedge their risk), AND another bite at the apple quickly? That’s “what planet are these people on?” territory.

  5. Through all of these actions by pilots, one has to wonder how productive it really was to saddle an already struggling company with a huge spike in the resulting costs. Those costs, and the lost future revenue because some HVC will avoid AA due to their poor reliability lately (I know I have), will ultimately affect every employee. Now management has even less motivation (and money available) to offer to pilots during negotiations. I think that they realize now how huge of a mistake it was to walk away from AAs last offer.

  6. @Kris – Nice to know the standard for getting whatever you want is “works hard.” I work hard, can I demand a pay raise, a stock issue, and a guaranteed value? I find the “they protect us in an emergency” line wholly unconvincing. ALL jobs have some ~.001% likelihood event where the employees would need to step up. Everything from cops and soldiers occasionally getting into firefights to taxi drivers occasionally having to swerve to avoid an accident. The pilots are absolutely free to bargain for whatever they can get AA to offer, but they should spare me the platitudes.

  7. Sounded to me the pilots only asked for a pay equal to industry standard. If that is a pay raise, then they are apparently underpaid. All the pay, equity, and guarantee they are asking are nothing more than what the AA executive and management enjoys everyday, so why is that unreasonable?

    It would be unreasonable if they ask for a bonus, but the executives got that too. If the purpose of bonus is to keep talent, what do you think is the most important talent to an airline?

  8. @Bgiagg – If they want the same pay the Delta pilots have then they can work by the same work rules, same pension (that was turned over the the PGBC), and the same amount of equity that the Delta pilots got (a whole lot less than they are asking for). Perhaps they want the same pay rates of the Eastern pilots. Sorry to say it, there is going to be more and more consolidation in the industry. You can’t have the same pay rates that worked when Jet-A was $1.00 a gallon.

    Sounds like there might be more pilots out there than people think, Virgin America is running out of cash, Frontier could be on the ropes, and with Eagle about ready to go through a culling, there will be plenty of opportunity for regional pilots to move up.

  9. I was delayed on a two flight aa trip recently, 3 hours on one flight, two hours on the other. Not very pleasant for passengers. My father had his commercial pilots license, he was a flight instructor during WWII. He gave up flying entirely, when I asked him why he said “If you have to do it every day it is about like driving a bus”. I think some Pilots could use to be reminded of this.

  10. They want higher pay *AND* ownership, and they want their ownership without risk. Notice they don’t say that they want US Airways-level pay. 😉

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