American Airlines cabin crews have been deadlocked for quite some time in negotiations over a new contract. Recently, APFA union members voted overwhelmingly in favor of authorizing a strike. Now, the APFA plans to make an announcement on Monday, per an email blast sent out to its members and obtained by Gary over at View From the Wing.
Negotiations Update #38:
An Update on This Week’s Bargaining
Your APFA Negotiating Committee met this week with the Company in federal mediation with the National Mediation Board (NMB).Email from APFA Negotiating Committee
As we indicated in our previous hotline, we have set this week as a deadline for the Company to make significant movement toward reaching an agreement. This afternoon, your APFA Negotiating Committee met with your Board of Directors to brief them on the status of negotiations, including the next step: a request to the National Mediation Board to release us into a thirty-day cooling-off period.
On Monday, November 20th, we will communicate information regarding this week’s negotiations and next steps, including the APFA Board of Director’s action on the request to the NMB to be released to strike. This will allow ample time to prepare communications for the various interested parties, including the National Mediation Board, the Membership, and the media.
Let’s unpack this. First of all, AA flight attendants earn base pay comparable to Delta’s cabin crews. However, profit sharing is a very different story, and that’s simply because AA isn’t nearly as profitable. There are a few reasons behind this:
- AA has the youngest fleet of any major US carrier. This is great in terms of passenger experience – I’d much rather fly aboard a 787 Dreamliner than a tired old 757 or 767, of which Delta has 121 and 65, respectively, still active in their fleet. That said, with all these new aircraft comes a much larger debt load, and that’s gotta be serviced.
- Delta’s credit card partnership with AmEx sees 1% of the entire United States GDP spent on their cards. Their SkyMiles program is so popular that they’ve had to gut it severely as it has been a victim of its own success (though CEO “Fast Eddie” Bastian had to partially roll the changes back, as too many elites got spooked). US airlines don’t make the bulk of their profits from actually flying planes – they make it through credit card partnerships with AmEx, Citibank, JPMorgan Chase, and so on.
- Domestic travel is basically evaporating before our eyes, while international remains robust. American has a really strong domestic route network, but their international network is far behind Delta’s. During the pandemic, AA got rid of a large chunk of their widebody fleet, expecting that by the time international travel returned in any meaningful way, they’d be taking deliveries of shiny new 787s from Boeing. Well, Boeing can’t seem to deliver on that, and until they do, AA’s international network will continue to be severely constrained. It seems like right now, you can fly AA metal to any destination in Europe, as long as it’s Heathrow.
So will we actually see a Christmas strike materialize? The Biden administration has been more friendly to unions than perhaps any other presidency in recent memory. We have come dangerously close to a UPS strike and a freight rail strike, either of which would have made obtaining essential goods and even clean water significantly more difficult. However, in both cases, the strikes were averted at the 11th hour. Unlike in Europe, we are culturally much more averse to allowing essential infrastructure to be disrupted by a strike.
Specifically for this case, it seems the APFA is aiming to formally ask the National Mediation Board on Monday to release them from negotiations, beginning a 30-day cooling off period. A few outcomes could come of this:
- They’re asking this during another holiday period – Thanksgiving. I don’t forsee AA getting an answer until sometime in early December, which would push any possibility of a strike into the new year.
- The NMB could decline to authorize the cooling-off period, requiring union members to stay at the bargaining table.
- In the unlikely event the union obtains timely authorization from the NMB, the ball is in President Biden’s court. This puts Biden in a precarious position. Biden is up for re-election in less than a year, and primary season is coming much sooner than that. Biden needs to maintain his pro-union image going into election season. At the same time, he won’t want to be remembered for ruining Christmas, especially as many Christmases were ruined last year by another Dallas-based airline.
It’s also important to note that it’s unlikely AA cabin crews will shut down the entire airline if and when they do go on strike. They will probably “walk out” on selected flights, causing disruption more akin to that of a major winter storm. Regardless, it would cause severe reputational harm to AA, prompting passengers to consider flying with competitors.
Personally, I’m not too worried about this. History has shown that under the Biden administration, these strikes tend to get averted – albeit typically at the 11th hour. If nothing else, expect that if a strike does happen, it won’t be until early 2024.