American Airlines And Flight Attendants Go Into “Last Ditch” Negotiations Next Week – View from the Wing

American Airlines and flight attendants go back to mediation in Washington, D.C. next week for what the union characterizes as a “last ditch” effort to avoid a strike. The Association of Professional Flight Attendants is telling crewmembers to “prepare for” a strike, and there’s certainly a looming threat and with negotiations dragging on that threat becomes more real. But for now it appears mostly posturing, and a deal seems likely.

A Deal Between The Union And Airline Seems Close

I’ve written over the past six weeks about the gap between American Airlines and flight attendants narrowing. American was already offering, effectively, the ‘Delta deal’ and Delta gave a raise so American increased its financial offer. Meanwhile, flight attendants lowered their ask.

Southwest gave its flight attendants retro pay and a big raise. American flight attendants want full retro pay to cover missed raises since January 2020. There’s going to have to be a signing bonus of some kind to get flight attendants to vote for a deal.

Flight attendants have been ‘cherry picking’ pieces of the Southwest deal and Delta pay, asking for the best of both, but ultimately there’s a cost to have flight attendants on planes and American will pay total cost at the top of the industry but can’t pay the highest parts of each deal. Southwest hours are calculated differently than American’s and Delta’s, meanwhile Southwest doesn’t do boarding pay like Delta does and American is offering (this would be the first unionized cabin crew group to have pay start during boarding time).

Union President Julie Hedrick tells Ted Reed, “We have made progress. We’re down to a very few issues left on the table.”

A Strike Won’t Benefit Flight Attendants (Much)

The threat of a strike is leverage for flight attendants to get the best deal possible from the airline. Actually striking costs flight attendants real paychecks that they can’t afford to lose (and their union lacks the deep pockets to cover much strike pay).

Meanwhile, American Airlines is already offering to pay top of industry wages. There won’t be flight attendants anywhere making more. If American were financially stronger, they might agree to pay even more knowing that,

• United is also negotiating with its flight attendants, and United would need to match
• Delta would need to match or more to forestall the current unionization drive there

In other words, American might spend more to drive up costs at competitors. But they’re less able to incur those costs now than competitors.

American needs to keep flying, sure, but in the long run can’t afford to pay more than the most that competitors pay in wages. Meanwhile, every day of delay in getting a new contract hurts the most vulnerable flight attendants most – first and second years in expensive cities. While everyone’s wages have been eroded since the last flight attendant raise in January 2019, for them it means having dipped below poverty level.

A big raise is on the table now, a delay won’t change the pay package much, so using the threat of strike makes sense but actually incurring the pain of a strike for little incremental gain may not.

Book Any Late July/Early August Travel Early

If you want to hedge risk of a flight attendants strike, you’re going to want to book travel on airlines other than American for late July and early August now.

If flight attendants strike – if they even threaten a subset of flights each day – customers are going to be avoiding American. All of the travel demand that normally flows to American will be competing for seats on Delta, United and Southwest (and to a lesser extent Alaska, JetBlue, Frontier and Spirit).

A strike basically takes American Airlines capacity out of the market, so all the travel demand bids up the price of flights – and especially last minute flights – on other airlines. A flight attendant strike can be expected to raise airfares substantially on other carriers.

So if you think a strike is reasonably on the table, you should buy your other airline travel in early July.

What Happens If There’s An Impasse?

The National Mediation Board doesn’t want to declare an impasse in negotiations, starting the 30 day “cooling off period” clock that would allow flight attendants to engage in “self-help” (strike).

• A majority of the board was appointed by President Biden
• A strike puts the President in an impossible position

President Biden is five months from a tight re-election. Price levels are already a big issue in the election (and voter frustration broadly). Spiking airfares are bad for the President. Harm to the economy from shutting down American Airlines is bad for the President.

Additionally, the President has the power to order airline strikers back to work. President Clinton did it to American’s pilots. He also pressed American and flight attendants to agree to binding arbitration. Voters inconvenienced by a strike will be angry at the President for not acting, and some will take it out at the ballot box.

At the same time, the President does not want to send strikers back to work. He doesn’t want to press flight attendants to agree to a deal they’re unhappy with. Union support is important to the President (even more important than Dearborn, Michigan).

And while the Mediation Board doesn’t officially do the President’s bidding, putting the President in an impossible situation isn’t a way to get appointed to future positions by Democrat Presidents either.

The Mediation Board is likely to look for any reason not to declare an impasse, but the more they kick the can down the road the less likely an impasse becomes because the closer to the election we get.

Still, if one does get declared there’s still at least 30 days to do a deal. And the union doesn’t even have to strike after that. They can engage in a job action at any point after that (the company could also ‘lock them out’ and stop paying them, and in either case bring in replacement workers like British Airways did 14 years ago to break its flight attendants union – though in American’s case I do not expect this in the immediate term, though it might have been smart to prepare for it).

A Strike Seems Unlikely

The parties are close. Neither one benefits from a strike. And the President certainly doesn’t want one. While negotiations can take on a life of their own, the base case remains that a deal can be found when it’s in everyone’s interests to get a deal done.

After that, of course, the deal will have to be sold to rank and file members of the union. That may not be an easy task after the union promised members more than they’re now asking for. But if the contract fails – as the last one union members voted on after the US Airways merger did (!) – the parties would just be back at the bargaining table, not facing down a strike again right away.

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