Let’s Do the Labor Roundup at the Big Three

The last couple of weeks have been action-packed when it comes to labor issues with each of the big three legacy airlines. For one airline, it’s good news while for the other two . . . not so much. Let’s just go in alphabetical order for lack of a better plan. If you’re a traveler, there’s only thing you care about. Will it impact your travels? With two of the three, minor disruptions are possible at most, I suppose, but I wouldn’t worry about it.

American
In the last month, there has been a ton of momentum for American to finally come to an agreement with its pilots. This comes from a combination of two things. American pilots elected a far more rational leader awhile back in Dave Bates, so that right away makes a deal more likely than under the old regime. From the other side, American is feeling pressure for a few reasons.

Probably most pressing is the fact that American has seen a large number of pilots retire in the last few months, far more than normal. That means that American needs to do a lot of shifting and training to fly its airplanes, and it’s trying to get relief from the pilots to be a little more flexible during the transition. The pilots, however, said that no relief will be given unless it’s part of a full contract. This is where the potential for disruption lies. If American doesn’t have enough pilots, then some flights could cancel. American should know this in advance, however, so I wouldn’t look for any last minute issues.

The other big issue for American is that investors are getting antsy. Without a new contract in place, there’s a higher concern that American could file bankruptcy. The stock has been beaten up, losing half its value in the last three months. We all know that American’s leaders don’t like when that happens, so the pilots have some leverage here.

There seemed to be some progress on the negotiations until American put out its last, best offer. The airline decided to negotiate in public by putting this out on its website. The pilots were not happy with either of the two options. While I always expect union leaders to complain, it sounds like the rank and file doesn’t like it either. And that means we’re probably back where we started.

I still don’t expect bankruptcy any time soon, but if it happens eventually, this would undoubtedly be like many of the other bankruptcies over the last several years where operations aren’t impacted. So don’t worry.

Delta
Delta is the good news “meat” in between the two slices of “bad news” bread here. After a long, drawn-out process, there is finally labor peace with the flight attendants. See, pre-merger Delta flight attendants were non-union but pre-merger Northwest flight attendants were union. There was an election a year ago to see which path would win, and the votes went in favor of doing away with the union by a clear amount.

The union, however, challenged the results, saying that Delta had interfered with the election. This is generally standard operating procedure any time a union loses, but this time, the union was told to stuff it. The National Mediation Board says that there wasn’t enough interference to influence the outcome, so the vote stands. Delta’s flight attendants will remain non-union.

While some flight attendants will be unhappy with this outcome, it’s a done deal and the integration can continue.

United
Then there’s United. The negotiations with pilots are ongoing, and really I haven’t heard about much progress. But the bigger, more important short term issue is with training.

Continental and United both have different procedures in the cockpit, but they need to be harmonized before the airline can become one under a single operating certificate. According to the pilots, it sounds like on the 757, 767, and 777 fleets, there are a lot of changes being made and most of them are standardizing with Continental procedures. So, the United pilots have a lot of learning to do.

The airline has decided to do all this new training via computer instead of in a simulator or in a classroom. The union thinks this is inadequate considering how big of a change it is, and I get the feeling after talking to some folks about this that very well might be the case. This is far from my area of expertise, so maybe some pilots can chime in below. (You can read the full report from the union.)

The airline keeps pushing on, however, and CEO Jeff Smisek had some harsh words, saying that union leaders “are crossing a line that is shameful and inappropriate between safety and industrial relations.” The FAA won’t step in, so it looks it’s a go. The new target date is, I believe, November 30.

What’s the hurry to get this done? According to the union, there are financial incentives for execs at the airline to get a single operating certificate by a certain time. It always comes down to money, doesn’t it?

So will this cause any disruption? I’m not sure. It would seem that if a pilot is scheduled to fly and doesn’t feel comfortable with the new procedures, then he might refuse the trip. I can’t imagine a pilot agreeing to fly if he thinks he’s not prepared. I haven’t heard a word about any real disruption, but I would think some mineor ones are always possible depending upon how this proceeds.

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To sum things up, there shouldn’t be any labor issues that disrupt flights during the holidays, but some of these related issues could have some sort of tiny impact. Personally, I wouldn’t worry about it. Just worry about the potential for snowstorms to snarl your plans. That’s the bigger potential problem.