American Airlines In The News: Positive News At JFK From Selling Slots Elsewhere, Possible Labor Trouble At American Eagle

A couple bits of news regarding American Airlines:

As part of the requirement that the New American divest slots at Reagan, American worked out a deal to sell a chunk of slots to JetBlue.  While not significant, that deal gives them ownership over 24 slots they were previously leasing from JetBlue at JFK.  I don’t think this means any ramp-up at JFK for American but it’s a good plus after having to sell a bunch of slots off at Reagan and elsewhere.

The union leaders for the wholly-owned subsidiary American Eagle have rejected a new contract offer from the parent company.  The basis of the offer was that the pilots take wage concessions in exchange for American Eagle agreeing to add new 76-seat regional jets which would in essence create more jobs.  I’m generally not a big fan of unions, but I’m even less a fan of inaccurate statements:

“Our pilots decided they were not willing to work for less than the company is already paying our peers,” union Chairman William Sprague said in the message. “We will now begin the process of assisting our pilots in identifying alternative career options within the industry.”

Well, no.  The pilots didn’t decide that because the union leadership didn’t give them a chance to vote on the contract offer.

Terry Maxon of the Dallas Morning News covered an interview with the chairman of the union council, William Sprague.  One of the questions asked:

DMN:  Do you think that if this had been sent out as a tentative agreement to the pilots, the members would have voted it down?

Sprague: I’d like to believe it would have, yes, given that the MEC vote represents what the pilot voice is, and we have done an enormous amount of work over the last several months, even preceding the initial meetings with the company, to figure out what the pilots want and make sure that voice was coming through the individual members of the MEC. So the voice they brought today to the table, which was not an easy thing for these guys to do, was that the pilots were not willing to entertain this. By such, I do believe had it gone out for pilot ratification, it would have failed.

Look, it likely would have failed. But if it were my job they were talking about I still would have rather been able to vote on it myself.

For a while American thought they would spin-off the Eagle division.  Now it looks more likely that they’ll ramp up flying with folks like Republic Airways, who already is doing quite a bit of flying for American as a regional carrier.

Sprague goes on to say that American Eagle is willing to pay more to Republic to fly these flights than they are Eagle pilots.  I don’t think that’s right in an absolute sense, but it’s not uncommon for businesses to pay more to outsource work.  From the company perspective, you don’t have to manage things like payroll taxes, benefits, unions, etc.

American was a bit unique in keeping the majority of its regional flying in a wholly-owned subsidiary but it looks more and more as if they’ll outsource this work.

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  1. Given how pilots lobbied for new rest rules that have effectively created a regional pilot shortage, I’d expect Eagle pilots to be able to find jobs elsewhere… with a loss of seniority.

    The other piece of the statement that doesn’t seem right is the implication (though the statement seems a bit more carefully worded than this) that the Eagle contract was for less than what other regional pilots make. The statement is technically true, there are pilots who make more, but there are plenty who make less.

    1. Gary, I had the impression that Eagle pilots at the top of the scale were relatively well-paid compared to other airlines. Glad to hear that assumption was likely right. I think the union’s being very careful with their statements here. What I can’t figure out is if this is ultimately a “win” of sorts for both sides. Eagle pilots will find jobs elsewhere and the folks at the bottom who are leaving now may even make more money. And it seems AMR (or the remnants of it) wants Eagle gone so they can just deal with outsource providers.

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