Thanks to the majority of United States airlines coming to the end of yet another profitable year – the tenth in a row – many of their employees are calling for bosses to provide improved remuneration packages.
Over 120,000 unionized employees will start negotiating their labor agreements that could potentially see major American carriers having higher expenses, including American Airlines who are starting to negotiate not only with pilots and flight attendants but maintenance workers too.
Currently airline companies spend the majority of their expenses on their labor costs with 28 percent of the overall $187 billion revenue being spent on labor costs, an increase of 21% in 2008 – mostly due to higher work forces and increased compensation payments.
Sara Nelson, international president of the Association of Flight Attendants – who has around 50,000 cabin crew members from 20 different airlines, including United Airlines and is calling for flight attendants at Delta Airlines to also join the union – commented that “there are simply more funds to get and workers are cognizant they’re turning out more value.”
This is in stark contrast to ten years ago when many airlines were hit with bankruptcies alongside several megamergers leaving three quarters of the market in the control of four carriers.
However profits started to increase and experts have forecast a net income of under 1% for each of the four big airlines, which although does not sound much actually equates to $12.44 billion.
Kit Darby tracks the pay rate of pilots and notes that “when the airlines are making money, it’s hard to deny the increase in compensation. Everybody tries to get a good contract when times are good. If it’s a short downturn, they hold on to what they got.”
With the news that profits are continuing to increase airports across the country have started to see protests as airline workers demand better schedules and working conditions as well as pay increases.
Executives at American Airlines and Southwest Airlines have attempted to have labor talks with their employees however they have laid the blame with the mechanics’ unions for delaying talks in an attempt to gain leverage, which in turn has caused operational issues that have led to thousands of flights being delayed or even canceled, although the unions have denied this.
In March of this year a resolution between Southwest and their mechanics ended six years of discussions with the new five-year contract including a 20 percent increase in wages as well as $160 million in back pay for employees.
However the airline’s discussions with their flight attendants is still continuing as well as their discussions with their customer service agents, dispatchers, and pilots. Most of the staff is concerned regarding the Boeing 737 Max still being grounded with the unions claiming the issue has caused employees to lose over $100 million in wages.
American Airlines are still in talks with their mechanics’ unions with the airline suing the unions in May due to the travel disruptions they were causing, winning an injunction that means they can no longer get involved in the airlines’ operations.
Josh Freed, the spokesman for American Airlines, said “since August, teams for the company and the union have met for multiple days nearly every week” confirming that both groups have “made considerable progress” although further talks have already been scheduled for January.
Another issue is the fact that although unionized airline workers’ contracts are allowed to have the dates amended they do not expire, all contracts are valid beyond the finalized date and any negotiated raises will no longer be applied.
It is worth noting that employees are not only looking for extra wages with American airlines mechanics asking for the outsourcing of jobs to be limited, especially those to foreign companies. American Airlines pilots are also requesting improved scheduling to ensure a “better quality of life.”
Eric Ferguson, Allied Pilots Association President as well as an Airbus A320 captain agrees that “scheduling is our no. 1 issue.” The union has also requested that employees on the less-desirable flights receive higher wages as well as providing easier ways for the routes to be available to pilots. This should encourage the trips to be picked up by pilots, reducing the operational problems, which in turn would enable revenue and profits to increase and therefore be shared with the airline’s employees. However Ferguson wants to make it clear that the unions are not just saying “pay us more,” but that they want the airlines to “fix the problems” they already have.
The APA represents around 15,000 pilots and although talks started in the first half of 2019, the contract would not be amendable until the beginning of 2020. However the union are asking for 16% raises over a three-year deal. The airline has countered with the same increase but over five years.
Doug Parker, CEO of American Airlines, spoke at a meeting in June last year telling their pilots “shame on us if we can’t figure out over the course of a year how to get a contract done before the amendable date.”