SWA, SWAPA and 737MAX

May 19, 2016 on 12:37 pm | In Airline News | No Comments

Southwest pilot’s union, SWAPA, is suing Southwest to prevent them being forced to fly the 737MAX as they believe it’s not covered in the contract.

I understand the move.  This is the pilots wanting a new contract with an industry leading raise.  It’s designed to raise public awareness and tension with the company.

It is a contradiction in so many ways.  First and foremost, the 737MAX is no more than an update to a long existing aircraft flown by the company.   To see it as a new aircraft type and force that issue is a giant stretch at best.

However, we wouldn’t be seeing this if Southwest were able to get a deal done on the pilot’s (and other unions’) contract(s).  Fear of an industry leading contract is reasonable and particularly so for Southwest since they no longer have the lowest costs in the business.  It’s a reasonable fear.

Which means the pilots could stand to have a gut check.  Wanting the most is not unusual.  Wanting it against the specific conditions of your airline and its future is self-defeating.  And while Southwest isn’t bankrupt and isn’t likely to go bankrupt soon, it would be in the interests of the pilots to learn from 30 years of lessons.  Namely that over-reaching has never done an airline nor a union any good in this business.

Failure to achieve a contract is a pox on both houses.  Both can give and both should reach for a contract that starts asap.

The airline and its unions have to come to grips with the fact that the airline is changing, the airline industry has changed and while record profits are seen today, there is nothing in the airline industry that is less volatile than it used to be.   That said, both parties should realize that they enjoy success and wealth today because of the unique special relationship that the airline and unions have historically enjoyed.  That relationship was about getting deals done that benefited both parties without being harmful to either.

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American Airlines orders new regional jets

December 13, 2013 on 2:57 pm | In Airline Fleets, Airline News, Mergers and Bankruptcy | No Comments

American Airlines didn’t waste time in making a new order for new regional jets.  The order is split between Bombardier and Embraer.

Bombardier CRJ900:  30 orders / 40 options

Embraer E-175:  60 orders / 90 options

The CRJ900 jets will go to US Airways wholly owned subsidiary PSA and, as you can imagine, PSA pilots are thrilled.  The Embraer jets are To Be Determined and, as you can imagine, the American Eagle pilots are way less than thrilled.

I honestly can’t read the motives of American Eagle pilots.  That airline is grossly overburdened with expensive 50 seat (or less) regional jets that will be going away.  Make no mistake, even if the capital costs are exceptionally low for keeping those planes, they are going away.  They are inefficient, costly to maintain and frequently break down at this point.  They are becoming quite old and they don’t fit the modern world model.

American Eagle pilots, represented by ALPA, haven’t found an agreement with American Airlines.  American Airlines president Scott Kirby thinks they can put a deal together and I think that . . . maybe not.  AE pilots are very well paid and many have decided to make a career at that airline instead of doing what most other pilots at other regional airlines do after a few years:  transition to a mainline airline.

I think AE pilots want to be paid like mainline pilots with mainline schedules.  If true, I think that American Airlines has a solution for that problem:  sell or shut down the airline.  In case anyone wasn’t watching, there really aren’t any buyers for expensive regional airlines with old equipment.  Comair anyone?

I feel bad for the AE pilots because they have a lot to lose and they don’t have much bargaining power.  If a deal is made, I would make sure that AE pilots have the right to upgrade into mainline AA operations for the next 10 years.  Pilots who stay in the regional airline game for their career can expect to see bankruptcies, consolidations, strikes and layoffs that are reminiscent of an era already gone in mainline operations.  Fighting won’t change that.

The best favor a union could do for those people is find a way for them to move up and out.

Oh, and those Embraer jets that just got bought?  They aren’t going to be committed to American Eagle until and if there is a contract.  Wait too long and they’ll go to someplace like Republic who already operates them and who already works for American Airlines.

 

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Hell No! IAM votes against Boeing

November 14, 2013 on 12:36 pm | In Aircraft Development | 3 Comments

The IAM Local 751 has voted against the contract extension negotiated with Boeing and which was recently described as “crap” by the Local President involved in negotiating the contract.

The vote was very decisive in rejecting the contract.

There is a strong belief that IAM membership and local leadership believe there is a better deal to be had here and that new negotiations will begin anew.  I think there will be political pressure on Boeing to come back to the table.  Exceptional political pressure.

Ultimately, Boeing probably will get in a room with the union and it will probably have a serious conversation.

I also think Boeing is going to have serious conversations with a wide variety of interested parties across the country.  And I think several of those serious conversations will carry much more enthusiasm on Boeing’s part.

The union wants what it wants and sees givebacks on things like pensions as a step too far.  Maybe it is, for them.

But the landscape of the United States is littered with former employees whose unions resisted change too much on things like pensions.   And the landscape contains a lot of bodies of union leadership who did not embrace the need for a new model for business between corporations and unions.

I’m looking at you, Tom Wroblewski.

You might get elected for another term by being dramatic and tearing up contracts symbolically while describing them as “crap”.  But who do you lead in 8 or 10 years when yet more productions lines have been established in other locations that are Right To Work states?

And, more importantly, what do you say to the machinist who had a great job and who would have still had a superior manufacturing job who now has to go through job retraining and do a service industry job?  Or the guy who has to move to California or Alabama or Georgia or Texas to find another aerospace job?  Or who just can’t find a job under any circumstances?

How do you justify yourselves to the unions at airlines who’ve given up a whole lot more than you to keep the very airlines who buy your products alive?

It’s notable that it took 2 bankruptcies and one near bankruptcy in the car industry for unions to wake up and make a better deal to keep those jobs in the United States.  It was a scary, traumatic time but 5 years later, that industry is healthy, building better cars than they have in 40 years and there are new jobs being created for the first time ever.

No, they aren’t $35/hour jobs that pay full pensions and no cost health benefits while the worker screws a dashboard to a frame.  But they’re good, valued jobs that compared favorably anywhere.

There are two messages to unions in the car industry and its recovery.  I hope that both are heeded.

There was a time when all of Boeing’s leadership was tied to the Seattle community.  That is no longer the case and really hasn’t been the case for a long, long time.  If unions believe that Boeing can’t leave, they are only kidding themselves.  If unions think that because there has always been a deal, there always will be a deal, they are kidding themselves.   It won’t end today or tomorrow but it will end in a decade.

This is a billion dollar business that has to compete in a highly visible, highly competitive global landscape.

So, I’ll offer this final comment to the IAM in the Seattle area for thought and dialogue:

Will the last IAM member in Seattle please turn out the lights when they leave?

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How secure is secure?

April 30, 2013 on 11:50 am | In security | No Comments

The wife of a September 11th United Flight 175 Captain Saracini is campaigning for a second barrier to the cockpit and reportedly is gaining some traction with congress.

I think this is security theater.  Since the September 11th tragedies, there seems to be this belief that we must be safe at all costs.  Particularly in an airliner.  I couldn’t disagree more.

The reality is that there is no such thing as 100% safe from hijackings and there never will be.  Safety comes from vigilance and proper screening.  If a hijacker has gained entry to the aircraft and has a weapon good enough to penetrate the cockpit door in flight, you’re security has already utterly failed.  More barriers aren’t going to stop that attack or effectively slow it.

I think the 2nd barrier idea looks great as an issue and I’m sure that everyone is attracted to it because at the end of the day, it scores points against airline management.

But airline management is the one who is right on this issue.

It’s not lost on me that this all surrounds United Airlines and appears to be related to both United Airlines pilots’ union maneuverings.  I feel the union is maneuvering the captain’s wife in this effort to jab at United Airlines for not doing enough.  It’s a way to gain the public eye, discredit management and seemingly get the upper hand.

But what upper hand is really gained?  Scoring points on this subject is silly.  It’s not a poltiical issue and, frankly, the more security is turned into a political issue, the more it will certainly be deficient.

I would ask the question:  Do you want to be secure or do you want to enjoy the illusion of security?

The former means you’ve got to listen to security professionals and properly evaluate your risks and mitigate against them.

The latter means that the wife of a lost pilot from a tragedy that occured 12 years ago and which will be highly unlikely to happen in that manner ever again drives the perception of security.

This isn’t disrespect for the feelings of this wife.  She deserves sympathy and empathy for her losses.  She also is not a security expert and has no business advocating for security on an airliner against those really do know better.  More importantly, the issue here is not “safe at all costs”.  It’s an unrealistic requirement in which the only answer is to never leave your home.

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Done Deal

November 9, 2012 on 10:15 pm | In Airline News | No Comments

The Allied Pilots Association and American Airlines have reached a tentative agreement for a new contract.  APA President Keith Wilson seems optimistic about it and describes it as an industry standard contract.  American Airlines seems to think it’s got a deal as well.

I’m pleased to hear a deal has been reached but . . .

There was a deal a few months ago that the pilots voted down.  We’ll see just how much the deal has changed once some details leak.  It’s possible that the pilots are ready for a deal and, if so, they’ll be likely to vote on it.

Maybe I’m cynical but I remain a little skeptical that this deal is truly done.

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Pilot Furor

October 2, 2012 on 1:00 am | In Airline News | No Comments

Terry Maxon who is the regular reporter for all things airline related at the Dallas Morning News and the primary contributor for the Dallas Morning News Aviation Blog has created an uproar among American Airlines pilots by suggesting that AA either suddenly has a vast number of its fleet experiencing serious maintenance problems all at once or something is up among the pilots and/or mechanics.

As a result, he’s gotten many emails from AA pilots contending that maintenance is the real issue  and that pilots are simply going by AA’s own book when it comes to dealing with those issues.

AA’s fleet is old by any standard and, yes, maintenance issues should be pretty common particularly among the MD-80 fleet.   Let me point out that the MD-80 fleet is only 191 strong now and is getting replaced rapidly by new build 737-800s.

AA has the following fleet count:

  • MD-80:  191
  • 737-800:  186
  • 757-200:  105
  • 767-200:  14 (and to be replaced by A321NEO aircraft)
  • 767-300:  58
  • 777-200:  47

205 aircraft in AA’s fleet could be categorized as “very old”.  These are the MD-80s and 767-200s.   Most of the 767-300 aircraft are actually not that old as aircraft go and should be categorized as “appropriate” and that accounts for 58.  The same is true for the 757 fleet and that gives us another 105 aircraft in the “appropriate” category with an average age of just 17 years.  For the relatively low cycles the 757 fleet has, that’s perfectly acceptable.  The 767-300 aircraft tell a story similar to that of the 757 fleet and total 58 aircraft.   The remaining aircraft (737/777) total 233 aircraft.

Now, please remember that fleets change and my counts may be off by a few aircraft but how I’m categorizing them isn’t.  So, let’s look at what is old vs new in the AA fleet:

  • Very Old Aircraft (MD-80 and 767):  205  (34% of the fleet)
  • Old But Appropriate (757 & 767-300):  163 (27% of the fleet)
  • Young Aircraft:  233 (39% of the fleet)

I think the pilots are overplaying their story of age and poor maintenance.  Furthermore, I’ll point out that other airlines run similarly old or even older sub-fleets with nary a problem.  Airlines such as Delta, for instance.

And despite how old those MD-80s are, they are also by all accounts some of the most durable aircraft around and very capable of flying with deferred issues.

Sorry AA pilots, I think you’re right in that some stuff has been deferred, some maintenance not done as regularly but I also think you are still playing “the game” with the company too.  If you think I’m wrong, contact me and give me real evidence that you aren’t.

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Dysfunctional

September 29, 2012 on 1:00 am | In Airline News | No Comments

These days, it seems as though American Airlines and the Allied Pilots Association are in a contest to see who can be more dysfunctional.   After asking for a return to negotiations, American Airlines has made threats to seek a court injunction against the pilots for the work slow downs occurring among some pilots.

The Allied Pilots Association is doing its union thing saying “What, us?  No way!” and then refusing to return to negotiations because its feelings are hurt.  But then also publicly cautioning its pilots that if they are engaging in a work slow down, they really should cut it out.

A curse on both their houses.

AA should have kept its silence and gotten to the table to get a deal in place.  Instead, they lost confidence and sent their new HR VP to threaten and already furious labor group.  That isn’t leadership.  That’s accounting people doing the accounting thing.  Do readers think that someone such as Gordon Bethune would have made such a move?

The APA should have shown it was in control of its pilots and gotten the word out quietly to cut it out as this is a chance to get a deal in place.  Instead, they did their usual song and dance.  The APA board is particularly dysfunctional since its run really by pilots who act in self interest instead of the better interest of the entire group.  The union’s president, Keith Wilson, is doing his best imitation of Laura Glading at this point which may get him re-elected but won’t get his group a deal.  Do you think David Bates would have advocated for these silly moves?

Like I said:   A curse on both their houses.

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Shades of Eastern Airlines

September 28, 2012 on 1:00 am | In Airline History, Airline News | No Comments

The Fort Worth Star Telegram’s Sky Talk blog has a story about how Maxim Group analyst Ray Neidl sees a similarity in the behavior of American Airlines pilots and how Eastern Airlines pilots managed to drive their own company into the ground 20+ years ago.

While I agree with Neidl seeing similar behaviors that are similarly irrational, I don’t necessarily agree that the same outcome is likely.  Eastern Airlines pilots did what they did, in part, because it was very hard for airline labor not to believe that an airline such as Eastern would be allowed to go bankrupt and effectively liquidate itself.  This, despite seeing Braniff vanish just a few years before.  There was a belief, at that time, that management would cave in to labor or that Congress would intervene.  Neither happened.

Today, I think that AA pilots know a little better.  That said, things are already getting out of hand.  What pilots don’t appreciate is that their small individual actions have a massive combined effect.  The press on this issue is already exposing just how far this has gone and just how little room there is for it to go further.  Furthermore, I think we would have to see a greater indicator of irrational behavior on the part of the APA board and leadership before determining that the risk is realized and the threat of demise imminent.

I will, however, reserve my right to change my opinion based on union behaviors over the next few weeks.  If we see union leadership fail to reign in these behaviors, I’ll fully acknowledge the likelihood that the airline starts a downward spiral financially.

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Interesting viewpoints in the DFW area

September 27, 2012 on 1:00 am | In Airline News | 2 Comments

It’s no surprise to anyone who lives in the Dallas / Fort Worth area that the local newspapers are awfully friendly towards its local airlines.  Both the Dallas Morning News and the Fort Worth Star Telegram tend to be very forgiving of American Airlines in particular but even Southwest Airlines gets a pass on occasion.   The area is dependent upon this industry in many ways and, to some degree, it’s OK.

One local reporter working for the Dallas Observer, Jim Schutze, is a man I respect quite a bit.  He worked for the Dallas Times Herald when it was in operation and then moved on to working as the Dallas bureau chief of the Houston Chronicle and writes for the Dallas Observer as well.  Schutze is a liberal and, in this town, liberals don’t get much play.  Balance between liberal and conservative viewpoints in the DFW area is a myth.  That said, Schutze is first and foremost a balanced reporter who exemplifies what journalism once was and rarely is today.

Schutze wrote THIS entry on his Dallas Observer blog regarding American Airlines and, curiously enough, Mitch Schnurman, a reporter for the Dallas Morning News and, until recently, the Fort Worth Star Telegram.  It was Schnurman who wrote scathing attacks on American Airlines management through the summer for the Star Telegram and caught national attention.

Schutze takes issue with the fact that in a recent Dallas Morning News column Schnurman took pilots to task this time for the AA operational slowdown without taking note that the pilot’s deed have resulted in a new development:  AA wants to go back to the bargaining table with the pilots.  He’s not wrong:  that is news.

Both are right.  The greater news was that AA is taking a beating and needs to come to a better agreement with its pilots.  But the pilots are, in fact, driving their company to the wall and that can only happen for so long before real and permanent damage gets done.

As I keep pointing out:  The pilots didn’t get their attitude today because they were treated appropriately by management.  Management didn’t lead them well at all.  However, you can only beat your own company up so long before not only does the board and creditors lose faith in the management, the public will lose faith in the airline.  When the public loses faith in the airline, that is a very, very dangerous thing.

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AA and APA will return to negotiations

September 25, 2012 on 1:00 pm | In Airline News | 1 Comment

American Airlines has made a formal request of the Allied Pilots Association to return to the negotiating table.  We believe this is entirely due to the “work to rules” action that pilots are engaging in over the past few weeks at American Airlines.  Hey, when your on-time record plunges more than 20 percentage points in a month’s time, you’ve got to do something.

Frankly, I’m ambivalent about this.  On the one hand, it’s rewarding atrocious behavior designed to directly impact customers and thereby directly impact a company that continues to issue paychecks to these same pilots.

On the other hand, I  would point a finger at American Airlines and point out that while the company did try to make a deal, it wasn’t done out of sheer anger.  No one at AA understands that the rage among labor needs to be cooled.  This is a mistake that gets repeated over and over and over again in the airline world and I do not understand it.

Both parties have done very badly for their constituents and both need to clean up their behavior.  Neither will.

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It will get worse

September 24, 2012 on 11:59 am | In Airline Service | No Comments

Over the weekend, I was contacted by several people about the American Airlines “pilot strike”.  Yes, everyone was talking about the pilot “strike”.  No, I’m not kidding.

There is no pilot strike.  There is no APA union sanctionized work action going on right now.

But . . . there does appear to be an informal “work to rules” campaign going on right now if anecdotal reports are to be believed.   It appears to be focused on maintenance items and most particularly oriented towards equipment that nominally can be “MEL’d” (Minimum Equipment List) for continuing a flight.

It would appear that the mechanics are cooperating as well.  By that I mean the mechanics are dutifully investigating and writing up problems in a meticulous manner.  All of this is resulting in big delays within the American Airlines network and it appears to include American Eagle labor as well.

While it may not be organized by the union, I would expect AA to go to court and ask for a court order to the union to stop these actions.  US Airways suffered similar actions in Charlotte and Philadelphia about a year ago when US Airways (EAST) pilots decided to throw a temper tantrum at that airline.  US Airways went to court and got a court order issued to the union to stop that behavior.

In other news, another American Eagle flight was delayed for 4 hours when two flight attendants decided to have a public spat with each other and the captain of that flight decided the two couldn’t work together.  Whether or not the pilot was smiling as it all went on, we do not know.   It appears that one flight attendant called for their colleague to stop using their phone during taxi and everything went down hill from there.

This stuff is going to get worse, much worse, before it gets better.  Expect American Airlines to suffer increasing delays and cancelled flights over the next 2 to 3 months at the least.  Labor is unhappy and labor is making its unhappiness known in very troublesome ways.

This isn’t just because of bankruptcy or reduced benefits, it has much more to do with the open loathing labor has for AA executive staff with CEO Tom Horton being at the top of that list.  The hostility is raw and angry and unlikely to fade any time soon.

And I repeat again:  This is why I do not believe that American Airlines has its revenue problem solved for exiting bankruptcy.  All the corner strategies and alliances in the world cannot stop labor from sabotaging the company’s reputation.

Customers are getting angrier by the day and voicing that anger in very public ways.  I think we will see traffic erode on American Airlines over the next 3 to 4 months at minimum and possibly longer.  Once you lose those customers, it will be very, very hard to convince them to come back.  They are already abandoning AA as a travel option wherever possible according to anecdotal reports.

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Full of sound and fury, signifying nothing

August 25, 2012 on 1:00 am | In Airline News | No Comments

Since behaving like responsible adults and taking their own best interests into account was too difficult, the Allied Pilots Association has now decided to stamp its feet and shakes its fists.

The APA has taken steps, very publicly, to get a strike vote against American Airlines.  The APA board has taken a vote to authorize that steps be taken to make “. . . necessary preparations to conduct a strike vote of the membership and to initiate balloting upon the first action of AMR to impose any of the negative term sheet provisions.”

The problem is, the National Mediation Board has to give the APA permission to take this kind of action and even when it does, it imposes a 30 day cooling off period first.  Not only has the NMB traditionally been very, very reluctant to release parties from negotiations, in the past decade it has shown no inclination to even hear a union out fully on its desire to strike.

Furthermore, once an airline exits bankruptcy, the NMB will be inclined to keep parties at the table for a long, long time.

So, lacking any influence on the bankruptcy for AA in the form of having a promised 13.5% equity stake in the airline or an influential seat at the unsecured creditors committee, the APA decided to fire its rational voice (David Bates) and act like a union from the old school days in making noise in the press about its desire to strike.

Well, there will be no legal strike over the next several years at American Airlines.

When the pilots stop throwing temper tantrums, I’m afraid their going to discover that they have sent themselves backwards 10 years or more both in compensation and quality of life.  All because the membership making it personal.

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Agendas at the AA unions

August 23, 2012 on 1:00 am | In Airline News | No Comments

Lest one believe that the APFA was going to meekly accept its contract and go forward quietly . . .

Surprise.  They aren’t.  APFA President Laura Glading has communicated that: “Now we need to work together to get rid of American Airlines management.”  Glading says that the goal of the contract was to provide a mechanism to support a merger between US Airways and American Airlines with US Airways management taking over.

There is no doubt that APFA leadership does want that merger to happen.  They’re angry and they want to show it to the current AA management, who, in fairness, has earned the enmity.  But I’m not sure that rank and file saw it as quite the same purpose.  The APFA membership are tired, beat up and fairly miserable.  Yes, they’re angry too but the chatter I saw out there prior to the vote seem to indicate a certain inevitableness to the process.

The APA is now demanding information from AA to back up its filing for Section 1113 terms.  This amuses me since their contention is that the contract was worth less savings than the Section 1113 terms are.  So . . . why the hell didn’t you vote for the contract?

Because your membership is angry as hell and likely wouldn’t vote for any deal ever proposed by AA management.

I think that the APA is now officially irrelevant in most of the bankruptcy process.  It denied itself a seat at the table by voting their contract down and trying to get that leverage back by challenging AA in court is a somewhat desperate move.  The bankruptcy judge essentially agreed with American’s terms except in two relatively minor areas and where he did disagree, he provided a roadmap to AA to refile its motion and win.

This is going to be painful to watch the APA relegated to the sidelines and with a terrible contract to boot.

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The AA Pilot Contract

August 16, 2012 on 1:46 pm | In Airline News | No Comments

Bankruptcy Judge Sean Lane did not impose Section 1113 terms per American Airlines’ request on pilots yesterday but don’t think that that was a win for the pilots.  Judge Lane found two small areas where he disagreed with need.  The first was unlimited codeshares and the second was an overly large number of furloughs.

American Airlines will revise its proposed terms and hand them back to the court in days and something will be decided.  The pilots can crow victory for labor all they want, this wasn’t a win for them on any level.  American Airlines is going to get fundamentally what they want and the judge signaled that, so far, he sees nothing out of line with the forming business plan despite the specious arguments made by pilots that it was unsustainable.

The business plan isn’t pie in the sky.  I honestly don’t think they have made a strong business case for a long term view either.  The continued focus on costs ignores the revenue problem which, despite AA PR, remains pretty bad.  Costs are much easier to quantify and therefore generally remain in focus during bankruptcy.  Revenue is based on a plan and projections that fundamentally rely on business conditions that are assumed and the ability to execute the plan.

My reservations about American Airlines are based on two fundamental observations.  First, the executive team in place today is in no way fundamentally different than the one in place for the past decade.  Over that past decade, the executive team has not shown itself capable of executing a plan to success.  As a result, the company has lost more than $10 Billion over 10 years.  That is not a company proving itself.

Second, business conditions in the industry are too volatile for making sound projections.  Delta Airlines exited bankruptcy with a business plan based on $80 / barrel oil prices.  Within months they were faced with $130 / barrel oil prices.  The airline industry is subject to strong influences from a variety sources that are entirely outside of the airline industry’s control.  The sum of American Airlines’ plan for revenues is “the other guys are doing this and we therefore think that with reduced costs, we can do that or better.”

The problem with that is you only know how the other guys are doing today, not how they’ll be doing tomorrow.  The other guys have other issues to cope with that aren’t always the same issues that AA is presented with.  Delta fixed many of its issues with a merger and built an unparalleled network as a result.  Then they doubled down and did a deal to capture the NYC market.  United did its merger in the reality that to compete with Delta, it needed scale and it remains to be seen that the ContiUnited merger is a true success.  There is evidence that they’ll succeed, we can’t declare it a success quite yet.

My problem with American is that, so far, the business plan seems to ignore weaknesses that are inherent in the system today.  In part, the Cornerstone Strategy relies upon capturing market share in very competitive markets.  Anyone who follows this industry knows that in light of the capacity restraints that airlines have shown, American Airlines has been the least effective in this and hasn’t shown much restraint.  Furthermore, to gain that market share means getting it on price (which sets off an industry war on fares) or on service.  American Airlines continues to do virtually nothing to improve service and demonstrate that it has a handle on service issues and can get its employees to assist in raising the customer experience level.

I think American Airlines needs a team that can execute a revenue and service plan.  That team sits at US Airways, not American Airlines.

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Can pay cuts drive

June 27, 2012 on 1:21 pm | In Airline News | 1 Comment

Pay cuts are the hot point for the American Airlines unions and particularly so for the APFA (flight attendants union).  The section 1113 hearings will move to abrogate those current contracts and unilaterally impose terms but that doesn’t mean the unions just have to unilaterally shut up and do nothing either.

American Airlines will still have a flight attendants union and will still be subject to NLRB (National Labor Relations Board) and the Railway Labor Act.  In short, it still has to negotiate a lasting contract with the union and the union still can ultimately resort to labor actions against the airline.  All the Section 1113 hearings do is potentially kick the can down the street for a few years more.

If the pay cuts are significant (and they almost certainly will be) and affect differential pay in particular, at what point do flight attendants just leave the business?  It doesn’t happen very often today because seniority drives people to hang on.  Seniority equals higher pay.  Some flight attendants out there in the world did see the writing on the wall when it came to legacy airlines and jumped ship to other airlines such as JetBlue to start fresh and build a new career at a new airline.  Some just left the industry altogether but those are few and far between in general.

But at what paycut do we see AA flight attendants seek work elsewhere?  The interesting thing to me is that when flight attendants do leave the business, they generally move on to more financially rewarding jobs, not less rewarding.   Granted, the economy today isn’t friendly to the idea of shopping for a new career.  On the other hand, people are hiring and people are getting hired and there are plenty of jobs out there that could offer as much or more financial reward and quite possibly a better quality of life.

What also may be missed in this is that there is more incentive to jump ship for the junior flight attendants than the senior flight attendants.   Retaining high paid, senior flight attendants doesn’t exactly help an airline much and that is particularly true for American Airlines.

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Southwest and Airtran Mechanics agree

June 23, 2012 on 1:00 am | In Airline News | No Comments

Southwest Airlines and Airtran mechanics have agreed upon a new deal and found a way to merge seniority satisfactorily. I wrote about this in February when Southwest mechanics derailed the last agreed upon deal.  At that time, how seniority would be handled within the airline in general as well as in Atlanta was the primary issue.

Getting a new deal agreed upon and accepted since then is fast work by all those involved.  I suspect that Southwest was able to alleviate some of the concerns involved with its moves into new aircraft and international flying.  SWA has likely been able to find a way to ensure that all parties maintain some parity in their seniority and their quality of life is preserved.

Not every deal has been made the first time around in union integration in this merger but every deal has been done fairly swiftly compared to most any other merger.

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Arbritration

March 14, 2012 on 1:00 am | In Airline News | 1 Comment

American Airlines unions are now asking for binding arbitration in their negotiations with American Airlines management as a pathway that they think will yield more satisfying results than a court order from bankruptcy.  In theory, this is quite likely the case.  However, that’s in theory.

I’m not sure arbitration works for the unions. Yes, it does force both sides to accept things they don’t want and both sides get some of what they do want.  However, arbitrators also have to consider the real facts surrounding what the business can support and the airline is far better positioned to press its case in this area.  Unions, on the other hand, aren’t. 

Furthermore, an agreement out of arbitration is still an agreement that the airline can get tossed out in court if the right argument is made.  The trick is in getting an arbitrated agreement that both parties can actually survive with and that a judge will find sensible and equitable. 

Moreover, another issue that arbitration doesn’t address, at least for AA’s management, is the need for quick resolution to labor.  American can hardly afford to spend months pleading its case, waiting many more months for an answer and then making a business plan.  It needs some certainty on the labor front in order to go forward with a business plan that addresses successful exit from bankruptcy.

I expect we will see AA resist arbitration, press its case on the publicity front with its unions and start action with the courts to change the labor agreements that way.

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Southwest mechanics derail union integration with Airtran

February 22, 2012 on 12:34 pm | In Airline News | 3 Comments

Southwest Airlines mechanics have voted against the integration agreement crafted between their union and the Teamsters who represent Airtran mechanics.  Curiously, Airtran mechanics voted overwhelmingly for the integration agreement. 

This isn’t the worst setback for Southwest but it does make one wonder what was a part of that agreement that made it so unsatisfying for the mechanics?  This isn’t an area that should feel too threatened on either side as Southwest has a culture of inclusion and has a strong need for mechanics to service its aircraft.  I do not see how anyone could have perceived that their jobs or salaries were threatened.

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US Airways and Pilots Settle

January 12, 2012 on 9:03 am | In Airline News | No Comments

US Airways and its pilots have come to an agreement to drop the lawsuit that US Airways filed against its union for a work slowdown.  A permanent injunction will be entered into the record, US Airways will be the “winner” and both sides pay their own legal costs.

Color me wholly unsurprised.  This was a bad move on the part of the pilots union as there was already precedent in courts going against them and it wasn’t a good way to get the company’s attention. 

Instead, the union should be working to unify its membership and get them on an integrated seniority list and then a new agreement with the airline.  These pilots have been working off two different seniority lists and without a new negotiated agreement since 2005.  That’s 6 years of bickering that admittedly, has benefitted US Airways in that it has kept pilots wages relatively lower than its competitors. 

The dysfunction shown by US Airways pilots has stunned me at times.  Particularly that of the “East” pilots (aka former US Airways pilots and not America West pilots).  First rejecting an ALPA negotiated integration and then forming a new union that could be under the control of the “East” pilots, no one has benefited from this behaviour. 

Furthermore, it’s hurt the company as well.  Until its labor problems are smoothed, US Airways doesn’t look like a good merger partner to anyone else.  After all, who wants to have three different pilots agreements and a labor group that has to be operated like three different airlines?

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SWA and Airtran Flight Attendants Agree

December 30, 2011 on 1:00 am | In Airline News | No Comments

Southwest Airlines and Airtran flight attendants have come to an agreement on merging their seniority lists now and it smells like a similar deal to what the pilots enjoyed.

SWA flight attendants, 10,000 strong, receive enhanced job security and seniority while Airtran flight attendants get an Atlanta base and better wages.  I would not be surprised if Atlanta is “fenced off” as a flight attendant base for former Airtran flight attendants for a period of time.

Both unions have to vote to ratify the agreement but expect that to be done quickly as there is no incentive to try to wait things out if the pilots’ negotiations are anything to go by.

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