American’s pilots claim to be unhappy.
American Airlines pilot leaders say a meeting with top company executives left them discouraged about prospects for a real change in culture at the world’s largest airline.
The glum outlook followed talks Wednesday with Chief Executive Officer Doug Parker and his lieutenants about the airline’s operational performance, employee benefits, scheduling practices and long-term financial and balance sheet concerns, said the Allied Pilots Association, the union representing 15,000 American workers.
“To characterize the APA board of directors as underwhelmed by management’s lack of any apparent plan for the long-promised culture change would be a gross understatement,” according to a message posted on the union’s website. “In discussions after the meeting, the board consensus was that management’s dismissive response cast considerable doubt on prospects for lasting change.”
American Airlines Boeing 787
This is important because although American and US Airways have merged, and from a customer-facing standpoint are a single carrier (albeit with very different legacy products that the airline is slow to update), work groups are not yet on the same system and pilots do not yet have a single seniority list that will allow the airline to function as one.
There are still planes attached to destinations and crews, and that prevents American from matching the right equipment to the right route and optimize aircraft so that expensive capital equipment gets the most efficient use possible as well. In other words, many of the merger’s promised synergies remain on the table.
The message from the airline though has consistently been the opposite of confrontational in response. Instead of blasting this message, they’ve accepted it and taken it on as a challenge. They’ve stated over and over they’re committed to the best possible employee relations. They’ve offered up profit sharing without asking for anything in return. And CEO Doug Parker has given up his employment contract as well.
At the same time, it’s not at all surprising to see frustrations in labor relations. If we didn’t, that would be the shock.
Hanger on the edge of DFW Airport
American Airlines wound up taken over by US Airways largely because of two things:
- Doug Parker’s willingness to overpay for the asset, a decision that’s either been vindicated or covered up by fuel prices that dropped like a rock shortly afterward. Even equity holders got a payout when American emerged from bankruptcy.
- Poor labor relations at American. American’s pilots effectively decided that existing management had to go, and underscored it with a work slowdown. Labor unions at American cast their lot with a merger.
The merger was something American Airlines employees wished for which seemed very strange at the time considering US Airways’ history.
- 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.
- US Airways had gone through two bankruptcies. As a ‘failed carrier,’ 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).
- But with more US Airways pilots than America West pilots, the former broke off to form their own union — whose purpose was to privilege US Airways pilots over their America West brethren.
Somehow an airline that couldn’t successfully merge pilot workgroups years after a merger was going to lead to labor peace when trying to merge three airlines at once. But the American merger was supposed to solve US Airways labor problems once and for all — since those employees would be getting raises to bring them up to American Airlines wages.
And with plenty of profits thanks to low fuel prices, they’ve been able to do just that… though those profits also lead to rising expectations.
Various American Airlines aircraft, 2013
American’s leadership clearly knows that pilots can bring an airline to its knees. It’s a large part of how they got to take over American Airlines in the first place. In January the head of the American Airlines pilot union blasted a ‘culture gone awry’ after the merger. Now the drum beat from the pilots continues, and the response from American is we’re working on it.
“Driving this culture change is our priority and it is about showing our employees, including our pilots, that we have their backs and we are here to support them,” said Joshua Freed, a spokesman for American Airlines Group Inc. “We are more committed than ever to getting this right.”
The airline already has begun work on improving hotel accommodations for pilots and flight attendants and employee break rooms, and gaining better access to jump seats or cabins used by off-duty crew members, he said.
One the one hand, the airline really is making an effort here. They’re spending money and they’re giving on quality of life issues too.
On the other hand labor relations at US Airways were a problem before the merger, and they were a problem at American before the merger too. Add in that pilot expectations have certainly risen given the profits the airline is generating, and that doesn’t give you labor peace.
Furthermore, given the history of contentious relations between the pilot work groups, union leadership needs to bring everyone together by focusing their frustrations on management and can only speak for their membership if they’re seen as successfully bringing things to their membership through an adversarial process. It’s a dangerous game both sides are playing to thread this needle.