As of January 1, 2020, AA pilot contracts became amendable. This means that the existing contract is still in force, but can now be modified. With AA profitable, pilots are expecting healthy pay raises and other benefit increases.
A year ago, American Airlines CEO Doug Parker said, “[S]hame on us if we can’t figure out, over the course of a year, how to get a contract done before the amendable date.”
Well, here we are. And in a well-articulated, well-argued, diplomatic note, Captain Eric Ferguson, the President of the Allied Pilots Association, laid out the arguments for why a new contract not only makes sense for pilots, but makes sense for AA.
Notice the veiled threat in the first paragraph:
“No question, we’re disappointed by management’s failure to make good on Mr. Parker’s stated goal, but all is not lost. At least not yet.”
Ferguson goes on to note the delta between AA and the competition:
“We’re sick of scheduling practices that are based on coercion, instead of the incentives our most successful competitors use.”
What AA Pilots Want
He calls for a new contract that will:
Improve scheduling, company transparency and accountability, and quality of work life
Achieve industry-leading hourly pay rates and address gaps in compensation and benefits with peers
Undertake contract repair, with a focus on items that were lost in bankruptcy
Ferguson argues these practices will make American Airlines more profitable:
“Our proposals address our pilots’ needs and also take into account the needs of American Airlines, its passengers, and its investors. They’re designed to create efficiencies and rid our operations of wasteful scheduling practices that degrade operational integrity and our pilots’ quality of life. They will help repair American Airlines’ reliability issues, with particular focus on provisions for swift recovery performance during IROPS.”
Let’s PlAAy Nice
Rather than attack Parker, Ferguson goes out of his way to praise him:
“I give Mr. Parker due credit for being a prime mover behind the U.S. airline industry’s transformation into a stable and profitable industry through consolidation. He had a vision and the tenacity to see it through. Nonetheless, during the six years since the merger, it appears he and his team have fallen short in day-to-day execution and in their ability to bargain with employees.”
But ends with a veiled threat:
“While there’s still time remaining, it’s far from infinite — and neither is our patience.”
I found myself nodding in agreement throughout my reading of the letter. Yes, there are some threats. Yes, I don’t think pilots should use operational reliability as a weapon of warfare, like the mechanics did. But Ferguson’s arguments make a lot of sense. Just like “happy wife, happy life” it is clear that engaged, dedicated, passionate employees help to make a business flourish. That has a cost.
I predict this sober-minded note will lead to a better outcome than threats of the “bloodiest, ugliest battle that the United States labor movement ever saw.” Still, negotiations will be tense and both sides should expect to compromise. But AA cannot dismiss the gist of this note, namely that pilots are reasonable in expecting a pay raise and that the health of American Airlines is tied to their own financial security.