I Spoke To A Veteran AA Flight Attendant: Why A Strike Is Closer Than Ever – Live and Let’s Fly

An enlightening conversation with a veteran American Airlines flight attendant has me convinced a strike is all but inevitable.

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American Airlines Flight Attendants Have Reason To Strike

We have often highlighted on this site the tough position that labor and airlines are in and have been in since 2019. In the case of American Airlines flight attendants, it’s perhaps truer than other labor groups and other carriers. They have not had a new contract since 2019 and what a different world that was from the one we find today. The one constant is that much like 2019, planes are once again full and have been for a couple of years.

Considering what has happened since 2019, a global pandemic and near standstill for travel comes to mind. Worries of global financial collapse, navigating a peculiar world of travel permissions and hurdles, political extremism, a war in Ukraine, in Israel, and 9 million undocumented migrants (some of whom are flown by US carriers to cities throughout the country) and the first-ever US president convicted of a felony adding to an already wide political divide. . Unruly passenger incidents on airplanes were up 35% from 2022 to 2023 after most of the masking requirements had gone away. Concerns over aircraft safety and the competency of Boeing equipment, not to mention the questionable delivery schedule of replacement and growth aircraft only added to years of stress, worry, and malcontent

This list doesn’t even include inflation of more than 26% in aggregate over that short five-year period and remember too that during the Reagan administration, food and gas were excluded from inflation statistics. The former is up 30% during the period, the latter is up more than 100%.

American Airlines flight attendants have endured an awful lot and continue to work under the same contract just as before. As if none of it happened. As if none of it continues to pose problems. The labor group has watched as flight attendants elsewhere have seen dramatic raises in generous new deals, including being paid more equitably for the time they are working which doesn’t start solely once the aircraft door is closed. Pilots secured a $9 bn five-year package, the best in the history of the company only to receive a new contract inside of two months from that prior historical deal landing them a further billion dollars. Pilots had two contracts inside of a quarter both landmark at the time and American management can’t get one done for FAs in a five-year span.

The labor group has asked for a 28% raise along with some other items, but in fairness, even at 28% it seems it may be just below real wage degradation over the period.

American Airlines Can’t Afford To Pay Flight Attendants More

The real problem is that American Airlines is poorly run. As covered last week, American Airlines makes more than $5.8bn annually (and growing) from its loyalty program, a sector of the business other airlines have disclosed runs at a more than 90% margin. Despite revenues in 2023 of $53bn, the company made just $19MM, an operating margin of 0.035%. Without the loyalty program, the airline is easily losing more than 10% annually.

CEO Robert Isom took home $31MM in 2023, but if he gave that all to flight attendants they’d make just $1,148/each more annually, amounting to less than a 2.5% raise for the median flight attendant. A further $19MM to bring the airline back to break even wouldn’t crack a 4% raise.

The airline attempted to circumvent flight attendant union reps last week by appealing directly to labor with an offer of a 17% raise until a new contract can be reached. Flight attendants overwhelmingly not only rejected the offer but wrote more than 5,000 letters to management stating that they were with the union.

But with such thin margins, the airline can’t afford to pay flight attendants, nor any other labor group, any more than they are now. They need to find ways to pay even less.

If the airline raises prices, it will lose customers to better-priced competitors. Even a modest bump of $1 more per roundtrip, may cast American further down the list on aggregator sites like Expedia where the airline no longer gains an unnoticeable dollar, but loses an entire airfare for consumers that are brand agnostic.

American Airlines couldn’t afford to pay flight attendants more in 2023, it certainly can’t afford the proposed 17% jump, and wouldn’t be able to pay the flight attendants what they are clearly due.

American Airlines Can’t Afford NOT To Pay Flight Attendants More

American Airlines also can’t afford to not pay flight attendants more. Both the United States and global airline markets remain robust. They have employment options.

In Q2 and Q3 of 2023, the period accounted for 52% of the total revenue for the carrier.  But those quarters span both busy and light periods at the extreme ends. Assuming, however, that revenue every day of the year was flat, in a total strike situation, American would lose $145MM every day the carrier couldn’t operate, and worse still, would carry costs despite that lack of revenue. A seven-day strike would cost no less than $1bn in revenue but potentially more as concerned customers book away from the carrier beyond the strike period or worse still, simply never return.

Gary Leff notes that FAs have discussed employing a CHAOS strike method:

“If/when flight attendants execute CHAOS strike (skipping specific flights each day, not doing a full walkout – which is what they’ve talked about), the airline would be paying most flight attendants even as customers booked away. This would have raised the cost to the airline imposed by the strike.” – Gary Leff, View From The Wing

This would do even more harm to the carrier.

They’re Ready

Speaking with a long-term veteran flight attendant this weekend, the union and the FA’s peers are more than ready to strike. Candidly, they admitted they were looking forward to it. “It’s ridiculous,” the FA said concerning just how far behind the market flight attendant contracts have fallen. The FA noted that they are paid less, there’s no profit to share even if that demand was met, and every other group had seen a raise.

The FA mentioned the support they and their peers had shown to the union, and the complete lack of interest in the 17% deal management offered. They believed that it would only prolong the wait for a new contract and that five years was already far too long.

There was a sense that FAs feel they have nothing left to lose. There’s a desire to punish poor management for poor execution. Vasu Raja’s termination was cheered (maybe management can do something right after all) because “[he] shrank the airline” and switched from a large, global carrier to one focused more on small domestic cities.

“We lost some big corporate accounts” was another comment and this appears to be substantiated by the carrier’s recent policy reversal designed to shun smaller travel agencies and its customers, forcing them to book directly.

“It’s a [expletive] show.”

“They’ll probably just declare bankruptcy [once the deal is executed] and we will be back at square one just as we were in 2001, 2008, and 2019.” The concern that new labor agreements are untenable is a notion we agree on.

The flight attendant had even discussed looking forward to planting a yard sign to prominently display that they were on strike and speculated on when that might arrive. For all of these reasons, it appears that not only are flight attendants ready, but they fully expect to take action. The FA expected the ordeal would last 7-10 days before terms were met. There was no doubt in the mind of the FA I spoke with that a strike was inevitable and was “the only way” management would reach a fair agreement.

Conclusion

While the account of one engaged flight attendant doesn’t necessarily represent the whole, 87% of American Airlines flight attendants are represented by the union and based on the overwhelming support they have demonstrated, labor is not going to accept a partial offer in a play for more time. The airline will have to find a way to run more profitably while absorbing higher labor costs, and without raising prices.  American can neither afford to pay more for flight attendants, nor can they afford a continued labor struggle. What happens in the coming weeks could determine the fate, size, and shape of the airline over the long term.

What do you think?