Combining more than 100,000 employees into cohesive work groups after an airline merger usually takes several years.
But on Labor Day weekend, less than nine months since American Airlines and US Airways completed their merger, union groups at both airlines are on track to join their workforces with new contracts.
Flight attendants are in the final stages of negotiations for a joint contract that could be voted on by the end of the year. Passenger service agents are currently voting whether or not they want to be represented by the Communications Workers of America. Pilots, mechanics and ground workers have filed for single carrier status and are waiting for federal labor regulators to determine if representation elections will be held this fall.
“We are really enthusiastic about the progress that has been made and excited that we have the structure that will deliver joint collective bargaining agreements pretty quickly after the merger has closed,” said Steve Johnson, American’s executive vice president of corporate affairs.
While American’s management and labor leaders appear to be meeting timetables agreed to in late 2012 and early 2013, there are still several challenges that could derail contract talks. The pilots union could face legal challenges from US Airways pilots who do not want to join the Allied Pilots Association. Mechanics may also have a few choices on who they want to represent their work group.
And now that American has posted profits in the first two quarters of 2014, union leaders want to talk about adding profit-sharing programs back into their contracts.
Airline industry analyst Darryl Jenkins said nothing ever goes smoothly with airline labor unions, but American’s management and union leaders are navigating the complicated process of coming together to create the world’s largest carrier.
“This is a bigger job than anybody has had to merge before, but the good news for [American’s management team] is that we have a stable economy and the company has strong balance sheets,” Jenkins said.
Reaching new deals
The flight attendants, represented by the Association of Professional Flight Attendants, have spent all summer working on a new joint contract. In late July, the National Mediation Board approved the union’s request for single-carrier status and APFA expects to be named the bargaining agent for flight attendants in September.
Talks between APFA and American’s management team are focused on scheduling and compensation and negotiators have been meeting three to four times a week. The union and American agreed that 150 days of bargaining need to be completed by Sept. 19.
“Due to the wild success of the company, it will be an industry-leading contract and we’re kind of excited about that,” said APFA president Laura Glading.
If the two sides can’t come to a deal by Sept. 19, an arbitrator will decide the final issues later this fall. Glading said she is hopeful that the parties will reach an agreement by the deadline, in time for the 25,000 flight attendants to vote on.
Also over the summer, American negotiated new contracts with US Airways mechanics and fleet service workers. Both agreements were approved in July and provide furlough protection and annual pay raises for 11,000 employees represented by the International Association of Machinists.
“We feel we are more fairly and more properly positioned now to go forward,” said Tom Higginbotham, who retired on Friday as president of IAM District 142. “It would not have been right to expect the US Airways membership to go into a joint collective bargaining agreement with something that was several years old and to a certain extent was behind American.”
Series of votes
Passenger service agents are in the middle of a representation vote for US Airways agents, who were represented by the CWA, and American agents who were not unionized. The CWA previously tried to organize American’s agents but lost a representation vote by fewer than 150 votes out of 6,000 cast in 2013.
Voting ends on Sept. 16 and if the workers choose the CWA for representation, American will begin contract talks with the union later this fall.
There may be more union representation votes this fall depending on what federal labor regulators decide.
The NMB has already granted single-carrier status for the pilots as requested by the APA but may require a representation election anyway. APA President Keith Wilson said the union is expecting the NMB’s decision in the middle of September and is preparing to go forward with a membership drive if needed.
The IAM and the Transport Workers Union jointly filed for single-carrier status with the NMB in late July. However, some American mechanics do not want an alliance between IAM and TWU as their union.
In a letter sent to the NMB last week, TWU Local 591 president Gary Peterson, who represents 3,800 mechanics and 570 store clerks at American, argued that such an alliance would keep mechanics in two different work groups just as they existed prior to the merger. He asked the NMB to hold a representation election that listed the TWU on the ballot rather than the alliance.
Higginbotham disagreed with the request saying, “the unions believed this was the best for the memberships and that belief has not changed.”
When U.S. carriers posted hundreds of millions of dollars in profits this summer, American employees watched as their counterparts at Delta Air Lines and Southwest Airlines received significant cash bonuses from their profit-sharing programs.
American’s union workers used to have profit-sharing and earlier this year shared $85 million for the company’s solid performance in 2013. But the carrier rarely reached the goals in the program to trigger profit payments and union leaders agreed to permanent pay raises instead of profit-sharing in their bankruptcy-negotiated contracts.
Now that American reported a $864 million profit in the second quarter, union leaders are hoping to add profit-sharing back into contract talks.
“We believe we should be compensated as our peers at Delta and United are and we hope the company understands our concerns in that area,” Wilson said, adding that the pilots would like to negotiate a profit-sharing plan similar to what pilots at other carriers have. “We brought this merger together with the idea of a culture change. Hopefully we can get an agreement so we don’t have to go through an arbitration process.”
In previous employee meetings, Parker has been asked about profit-sharing and has said he believes workers would prefer fixed pay increases instead of uncertain annual payments tied to profitability.
Glading said the union leaders negotiated away profit-sharing for the 2.5 percent increases in 2013 based on Parker and his management team’s projections for the company after the merger with US Airways closed.
“It was never our intention to never approach the profit-sharing possibility again,” Glading said. “The success of this company has been greater than anyone has imagined.”