Air travelers tend to have plenty of worries as their trips near — including concerns about costs, weather, baggage fees, security lines and delays.
Airline passengers understandably also get nervous about disruptions to their flight plans when they hear of labor disputes that rise to the level of strike threats.
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And that is exactly what American Airlines (AAL) is currently dealing with — and hopes to avoid.
"Flight attendants are ready to strike," Association of Professional Flight Attendants President Julie Hedrick told American Airlines CEO Robert Isom at a company all-hands on April 25. "If you want to push it any further, push it. We are ready."
Pres Hedrick to AA CEO Isom: “@AmericanAir Flight Attendants are ready to #strike. If you want to push it any further, push it. We are ready.” #1u #corporategreed pic.twitter.com/njHYNTSJNP
— Association of Professional Flight Attendants (@APFAunity) April 25, 2024
Hedrick's comments were a reaction to an update Isom gave at the all-hands about the status of the airlines negotiations with its flight attendants in which he compared the deal American Airlines was prepared to offer with Delta Air Lines' (DAL) new pay structure.
But the union believes Southwest Airlines (LUV) has a model that is more lucrative and should therefore be the standard that American Airlines is striving toward.
The Southwest flight attendants deal includes retroactive pay as well as a raise.
American Airlines CEO Robert Isom explains his position
View From the Wing's Gary Leff viewed a recording of the American Airlines all-hands. The travel writer shared some of Isom's remarks at the meeting where the CEO addressed the carrier's past negotiations with its other unions.
"I want to pay them at the best in the industry," Isom said, according to Leff. "And right now every offer that we put on the table for our pilots, for our dispatchers, for our agents, has been consistent with that philosophy."
Isom claimed that the airline had reached some satisfactory agreements, but that during those negotiations some developments had occurred with respect to other airlines.
"And in every one of those cases we went and adjusted our offer so that we were consistent with that philosophy," he said, according to Leff.
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Isom explained his belief that American Airlines' approach to negotiations with its flight attendants would be no different.
"We are using that absolute same philosophy with our flight attendants. And we have to — we have to be fair across the entire company, we have to be consistent with what we do."
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American Airlines believes the Delta Air Lines standard is appropriate
Isom said he believes that American Airlines has an "industry-leading offer" on the table.
"The marketplace has changed. It changed when Delta put in place a new pay structure," Isom said, according to View From the Wing. "Now, their pay structure’s not contractual. They don't have to sign on it. And they aren't held by the work rules that they've established."
"But I'm willing to sign up for that, and I'm also willing to commit — the company is willing to commit — that we will match that," Isom added.
More on travel:
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Isom said that as he understood the deal at the time of the meeting, it would result in a 25% pay increase for flight attendants on the day of signing and a 401(k) increase from 5.5% to 9%, as well as profit sharing increases.
As for matching Southwest Airlines' offer to their cabin crew that involves retroactive pay, there is no sign American Airlines is willing to entertain that requirement as part of its negotiations.
"Reaching an agreement for our more than 26,000 flight attendants remains our priority," a spokesperson for American Airlines told TheStreet in an email statement. "We continue to meet regularly with the APFA and are ready to get a deal done quickly."
American shares were off 1.77% on Friday and down 9.6% this month. But they are up 1% on the year.
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