Pilots Blast “Toxic Culture” at American, Embarrassed By Inflight Product. Why is Anyone Surprised?

American was, for many years, a bankruptcy waiting to happen. They pushed it off and pushed it off while they lost money and their competitors drove down costs through what Donald Trump refers to as “the Chapters.”

They lost control of the process though and wound up being taken over by US Airways rather than emerging independent. Time and again American management expressed a desire to emerge independent and then consider any merger.

For all the time American spent waiting to enter Chapter 11, they still had plenty of cash on hand and an ability to meet their creditor obligations — though not a long run likelihood of returning to profitability.

One irony is that if they had waited longer they probably could have emerged independent. A year or so longer and the would have been in bankruptcy while fuel prices were dropping, they would have turned profitable and legacy management might have remained in place.


American Airlines Boeing 787

However, three things happened:

  1. Doug Parker and Scott Kirby got the American Airlines unions on board for a merger. And while it held out the possibility of better labor relations for legacy US Airways, since those employees would be getting raises to bring them up to American Airlines wages, it struck me odd that American’s unions would think US Airways history would lead to labor peace.

  2. In the summer of 2012 I saw a merger as highly likely because of US Airways’ willingness to overpay. All of a sudden even equity holders would get something out of bankruptcy. Instead of the originally proposed 50-50 deal they were dickering about what amount over 70% American Airlines stakeholders would get in the combined company.

  3. American Airlines pilots began a sick out in September 2012. Once the pilots decided former CEO Tom Horton had to go, it was likely the end of his tenure one way or another.


Hanger on the edge of DFW Airport

So we got a merger, or rather acquisition of American inside of bankruptcy by US Airways. And it didn’t lead to labor peace.

In the fall American’s flight attendants went to war with each other. But what really matters for an airline to remain operational are its pilots. Pilots can bring an airline to its knees in a way that flight attendants cannot.


Various American Airlines aircraft, 2013

In January the head of the American Airlines pilot union blasted a ‘culture gone awry’ after the merger. Now the offensive continues.

American Airlines Group Inc.’s pilots union, an early backer of the carrier’s merger with US Airways, blasted the return of “toxic” labor relations, a substandard product and violations of their contract.

American executives can no longer rely on the excuse that they need more time to bring everything into order since the two companies merged in December 2013, the Allied Pilots Association board of directors said in a March 4 letter to Chief Executive Officer Doug Parker. Many of the airline’s middle managers are “misaligned” with Parker’s call at a recent leadership conference for better labor relations that will bring all employees in line with a push to make American the best airline, the letter said.

…“The pilots of American Airlines will not remain silent as we witness the rebirth of the toxic culture we fought so hard to eradicate,” the APA letter said.

“The new American Airlines product is outright embarrassing and we’re tired of apologizing to our passengers,” it read. “We hear from many valuable corporate clients and premiere status passengers that the product is not what they’ve come to expect from American Airlines.”

When US Airways and America West merged, the airline faced contentious labor integration issues. The pilots in particular never formally got to a new contract with merged senior list. For them, the merger with American Airlines presented a final opportunity not just for increased pay but for finally overcoming the wounds the US Airways and America West pilots inflicted on each other.

America West and US Airways pilots were both represented by the same umbrella union organization. As such, they had a built-in mechanism for determining how the senior lists of the two airlines would be integrated.

US Airways had gone through two bankruptcies. It was judged to be a ‘failed carrier.’ As a result, US Airways furloughed pilots were supposed to go to the bottom of the seniority list at the merged airline for re-hire, and the arbitrator’s decision on seniority was to keep relative seniority positions intact rather than sort one list based on date of hire (which would have privileged US Airways pilots).

However US Airways was also the larger of the two airlines, and there were more US Airways pilots than America West pilots. As a result, they were able to break off and form their own union — whose purpose was to privilege US Airways pilots over their America West brethren. In effect, the purpose was to overturn the arbitration decision that put US Airways pilots at the bottom of merged seniority.

Usually a union’s purpose is to extract as much as possible from the employer. This, instead, was a Monty Python Life of Brian moment. The pilots fought each other instead of the Romans management.

Without the ability to agree on final merged terms between the airlines, all the old America West terms remained in place for the America West pilots. For instance, America West pilots continued to pay a monthly fee to access their crew scheduling system. It’s the kind of sore thumb item that the airline was willing to give back on, but only as part of a final joint contract. These kinds of thorns remained, because the pilots could never get together on merged seniority.


American Airbus A319

In the process of integrating with American, you really have three pilot groups and not just two that are coming together as part of the new single airline. The bitterness amongst the pilots even leaks out in online wars, editing Wikipedia pages. For instance, as of this writing the US Airline Pilots Association page intoductory section includes,

On August 5, 2013, USAPA’s founder, former President and Vice-President Michael J. Cleary, threatened legal action against USAPA alleging it is using his trademark without his permission. Because of this action, Usapians are commonly referred to as Former Union Known as USAPA Profiteers (FUKUP’s).

The hope of course was that the merger with American meant the past squabbling would become more or less irrelevant.

But now it involves friction with former American Airlines pilots too, it would seem.

For their part, American Airlines isn’t squabbling back. They aren’t willing to fight publicly with their pilots, which seems smart. Instead, they’re saying ‘we get it, we’re working on it.’

American executives are “well aware” that a cultural change is needed, company spokesman Casey Norton said in an interview Sunday. At recent meetings in Dallas, Parker told thousands of managers that the airline must take better care of its employees as part of taking care of customers.

“It’s all about getting middle management to listen to front line employees and place value in the feedback they give us, because we are intent on making American a fantastic place to work,” he said.

…APA is “exactly right” to raise the issues in its letter, Norton said. “These are all things that are incredibly important to us. We’re only two years into a five-year integration. Nothing is going as fast as we’re wanting.”

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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Comments

  1. I love the random pictures. Not quite sure why we needed to see a hanger on the edge of DFW Airport. Whatevs.

  2. Look Parker has a long history of doing it on the cheap and the “new” American will not be any different and its a shame, it’s just not in Parker’s DNA. But then that is the story line of all the “majors” these days, especially internationally. Hell AF has better service.

    I don’t blame the pilot’s their taking pride in what they do, and let’s face it the less people fly them the less job security there is.

    And who care’s about the photo’s.

  3. US planes have always been garbage. The AA fleet was always decent. You just have to know which flights/aircraft to avoid. Don’t fly cross country from any city besides JFK. If you fly PHL-SFO you will be on a beat up piece of junk with no IFE.

  4. Eh would somebody care to explain Captain Kirk’s commentary? So what the entire United States should reroute their travel plans to go through New York or else deal with substandard equipment?

    To be honest, the planes I could deal with so long as they are safe and pose no safety hazard.

    It’s exactly what the pilots cite, the “toxic” attitude of the front line and management employees. I can remember having a single issue and the ‘manager’s’ reaction being well we’re not going to do ‘that’. Oh and forget about dealing with the ‘business’ side of things.

    You’re going to get better customer service at a Taco hut which costs you what 10 bucks tops then you are going to get from any American airline even if you’ve paid 50 times that amount.

  5. Had I never traveled on a foreign carrier, I would have never known but the difference between the 2 or 3 foreign carriers I’ve flown on , and their american counterparts is NIGHT and DAY.

    It’s embarassing and a true testament to the sentiments of “Make Wuddevs Great “AGAIN”” because whateva it is you’re doing nowadays, it’s a lot of things.

    GREAT Isn’t one of them.

    Have a wonderful week and a fantastic 2016.

  6. Parker is the last of the big three liars left. I hope he disappears from the scene soon. I’ve been flying US Air long before it changed to that name. It was always garbage.

  7. I find it strange that the pilots are citing inferior product as a big part of their public complaints. Sure, U.S. legacy carriers are full of old, tattered planes — but things generally seem to be getting better lately, not worse. Especially on AA, you have lots of new flat beds flying international, including the beautiful 77W. And on SFO/LAX-JFK transcons, the relatively new A321T is beautiful and an excellent product. I’m also often getting new 738s with the sky interior and nice seats, AVOD, etc.

    Now, legacy US Airways aircraft are a different story. They were crap before the merger and they are still crap today. But the pilots who fly those planes are used to them. To suddenly say that they are now embarrassed about the product just feels disingenuous. They should have made that claim years ago when US pulled all entertainment and power ports off the planes. But to suddenly make a big deal about it now is strange. And I believe that AA is slowly adding new features like MCE to the legacy US planes, so they are actually getting better.

  8. The pilot’s union is now seeing its chickens come home to roost (as they say) . They were happy to take short term gain and ignore the facts that stared them in the face (the pilot situation at US Airways) in order to give the legacy AA management team (Horton) one last massive kick where it hurts. Now they’re having to come to terms with the fact that they got into bed with Doug Parker…the man who has historically done things on the cheap (remember he tried to charge for water).

    After putting up with the pilots’ nonsense in September/October 2012 and seeing just how blinkered they were when dealing with Horton & co during Ch 11 I’m finding it very hard to scrape together any sympathy for this lot. You reap what you sow.

  9. I think there’s two parts to this story. The first, why did the pilots get behind the merger? Answer: AA execs had been taking huge bonuses for several years while the pilots and flight attendants were denied any profit sharing. When the economic fallout occurred those pilots finally had leverage and had a way to push out the former AA execs. Problem: The replacements were different, but not really any better.

    The second question that is obvious to me: When has labor-management relations gone well? Answer: The larger the group, the less smooth. I’m not surprised with this result. While the fleet is getting upgraded some of those new planes feel much smaller with fewer seats and the airline is reducing service to cities. The hub and spoke system is filling all the planes in the hubs resulting customers in Chicago, Dallas and Miami getting gouged on fares.

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