Rising rhetoric: An impending union battle for American Airlines

American Airlines and its labor unions are in a bad place today. The most recent moves, a series of parries between management and unions representing the carrier’s mechanics, has the potential to significantly disrupt the airline’s operations during the peak summer travel season according to a lawsuit flied last week. The union is not impressed by these claims, choosing to take a far stronger approach, threatening “the bloodiest, ugliest battle that the United States labor market ever saw.” Perhaps this is all posturing, but given the lack of progress during more than three years of negotiations for a new contract there’s plenty of reason to believe the frustration and potential for significant fallout is very, very real.

$AAL just filed for a preliminary injunction against the the TWU-IAM Association.@AmericanAir says that 125,000 customers have been affected by 650 flight cancellations and more than 1,500 maintenance delays of more than two hours as a result of an illegal slowdown its members.

— Holly Hegeman (@PlaneBusiness) May 20, 2019

The lawsuit filed by American alleges a work slowdown by its TWU/IAM-represented mechanics that affects 3,400 passengers each day. It also claims that the likelihood that the impact seen is natural rather than a result of concerted action by the union is one in a billion. The carrier claims that mechanics are refusing overtime in a coordinated manner and acting more slowly to clear minimum equipment list (MEL) repairs. By allowing the MEL items to accrue the aircraft risk being grounded rather than being repaired at an overnight stop. American says that the number of daily MELs open is up 27% from both 2017 and 2018 and that the number of MELs taking more than 8 days to be resolved is up 35% year over year.

The union’s formal response was limited, essentially indicating that it was disappointed that management is choosing to negotiate via the courts rather than at the bargaining table.

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Getting Aggressive

The unofficial response, however, is where things get really interesting.

At an event in New York City the day after the lawsuit was filed TWU International President John Samuelson confronted AA’s President Robert Isom at a meeting with union members. Samuelson’s comments were far from restrained.

You made $3 billion last year, with all of the concessions that you grinded out of us through bankruptcy and the concessionary deal. You intend to execute work rules and scope changes that will allow you to increase dramatically that $3 billion off the back of your unionized workers, and that’s never going to happen. If this erupts into the bloodiest, ugliest battle that the United States labor market ever saw that’s what’s going to happen. You’re already profitable enough.

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If we get to a point where there’s self-help we’re going to engage in absolutely vicious strike action against American Airlines, to the like of which you’ve never seen. Not organized by airline people, but organized by a guy that came out of the New York City subway system that’s well inclined to strike power and who understands that the only way to challenge power is to aggressively take [the fight] to [management]. I doubt we’ll get to release, but if we do, we’re going to shut this place down.

– TWU International President John Samuelson

There is more in the video, including a portion of Isom’s response in which he suggests the aggressive tone taken by the union is “not going to be productive.”

We all want American Airlines, above all, to succeed now and into the future. … I will tell you this: Anybody that seeks to destroy American Airlines, that is not going to be productive. It just won’t. We have to be able to work together to see the views both sides. The rhetoric that says ‘we’re gonna go to battle,’ we can’t live this way.

– American Airlines President Robert Isom

The segment is also edited so the full context may be slightly different, but one thing is clear: tensions are rising.

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The good news is that this sort of rhetoric is not entirely uncommon when it comes to union negotiations. The bad news is that this particular contract is dragging on in a way that cannot be good for either side. This is the sort of situation that is more likely to breed wildcat actions by small subsets of workers. And American’s CEO Doug Parker has plenty of experience in riding out union challenges from his days of keeping America West and US Airways in the air as a combined operation. That does not bode well for anyone hoping to see a quick solution to the contract negotiating points at hand.

Additional union challenges

And, while the current flare up is with the mechanics, American’s union troubles also extend to is cabin crew. The Association of Professional Flight Attendants (APFA) has been campaigning loudly around executive compensation at the airline. Last month APFA again called out the bonus plan that was rewritten to allow for payouts to many employees that would not have been earned without the adjustments. The carrier is also still fighting legal challenges with respect to its cabin crew uniforms.

Delta Air Lines recently found itself on the receiving end of a similar suit from cabin crew who also happen to be in the midst of a unionization push. Southwest Airlines also used legal means to address work slowdown issues with its mechanics, though that group voted to ratify a deal last week after seven years of negotiations.

US carriers have produced billions of dollars in profits in recent years. And American CEO Doug Parker went so far as to claim that the carrier would never lose money again, even given the historically cyclical nature of the industry. In that context it is easy to see why the employees expect to share in that bounty rather than see it all pumped back to shareholders.