AA Flight Attendants May Strike
D A L L A S, Jan. 12, 2001 -- One day after American Airlines announced it has agreed to buy parts of two other carriers, leaders of its flight attendants union pushed for a strike vote of rank-and-file members.
The move by union leaders underscored the difficulty American faces in winning labor support to buy Trans World Airlines and parts of US Airways for $1.8 billion in cash and $3.3 billion in debt.
“It is ironic that American can find more than $5 billion for these various assets but can’t invest in its best assets, its employees,” said John Ward, president of the Association of Professional Flight Attendants, which represents 23,000 American employees.
The flight attendants are pressing a federal mediator to end negotiations with American, which would start a 30-day countdown until the workers could legally strike. After the 18-0 vote of union directors, a strike vote of rank-and-file could be completed by mid-February.
American spokeswoman Karen Watson said the company would prefer to resume negotiations with the flight attendants.
Asked whether a strike would complicate the TWA and US Airways deals, Watson said, “We have to work with all of our employee groups to resolve issues of integrating TWA into our operation, but that would be separate negotiations.”
Fliers May Follow Lead
As the flight attendants were taking steps toward a strike, American’s pilots are gearing up for negotiations this summer.
Leaders of the Allied Pilots Association were unhappy after a briefing by an American vice president about this week’s acquisitions. The union president said Thursday officials didn’t learn anything they didn’t already know from press accounts, and they’ve demanded another meeting today.
“This is an enormously large deal, and our pilots’ careers are at stake, so we have questions about several items,” union spokesman Jim Philpot said of the acquisitions. “We’re withholding judgment.”
Industry observers say American’s unions enjoy lots of leverage to seek better contracts in exchange for helping smooth the way for the TWA and US Airways deals. By using that leverage to get richer contracts, labor can make the deals less economically attractive.
“You saw what United pilots exacted … a 46 percent increase in salary that is reverberating like a shockwave through the industry,” said Julius Maldutis, an analyst with CIBC World Markets Corp.
Maldutis was referring to a contract that United — eager to complete a purchase of US Airways — reached with its pilots last year. The settlement was reached only after the pilots snarled traffic by refusing overtime assignments.
American’s pilots are seeking to at least match the United deal.
Seniority at Stake
One of the thorniest issues in airline mergers is how to create one work force from two or more combining airlines. In this case, the rival unions will negotiate over how much seniority TWA and US Airways employees will get when they become American employees — seniority determines who gets the best routes and highest-paying assignments.
The last time American bought another carrier — small Reno Air in 1998 — it provoked an uproar among pilots who feared losing assignments to much-lower paid Reno Air pilots.
The issue was settled, but only after a sickout that led to the cancellation of more than 6,000 flights, costing American an estimated $225 million. A federal judge levied $45.5 million in damages against the union for defying a back-to-work order.
American pilots accused Reno pilots of trying to take their jobs at lower pay. They stuck even the longest-serving Reno pilots at the bottom of American’s seniority list.
“I think people would like to see the TWA pilots treated fairly,” said Russell Cowles, an American pilot based in Miami. “You just hope you can preserve everybody’s relative position, but somebody’s always going to be unhappy.”
Frank Larkin, a spokesman for the International Association of Machinists, which represents TWA’s machinists and flight attendants, said his members would like to receive full credit for their TWA seniority, but he declined to predict the outcome.
Regardless of the seniority issue, most TWA employees are expected to see pay raises, and American chairman and chief executive Donald J. Carty said the carrier would retain all of the St. Louis-based carrier’s union employees — most of its 20,000-member work force.
“Everyone is very happy with the news,” Scott Sherrin, a spokesman for the Allied Pilots Association, which represents TWA’s 2,300 pilots, said after the buyout was announced. “It definitely gives us an added level of security going to a carrier like American.”
TWA has been losing money since 1988, and Sherrin said pilots didn’t know whether the airline would liquidate or be rescued by a white knight.
“This is the best outcome we were hoping for,” he said.