It’s Just The Pilots Now

Running a bit behind while having a great time on vacation.

The flight attendants ratified their new contract with American Airlines on Sunday.  The disappointing (though not surprising) part is that just over 40% of the flight attendants rejected the contract offer.  The union continues to make statements about how they prefer a merger with US Airways, but preferring a merger and outright rejecting an offer that’s almost assuredly better than what you’ll get if the bankruptcy judge voids your contract is just not smart.  And it seems pretty clear the judge will void the pilots contract if they don’t ratify something soon.

Meanwhile, I think American made a somewhat smart move (with some pressure from their creditor committee) by making another offer to the pilots’ union.  I say somewhat because I do think it’s wise to get a deal both sides agree on without the judge voiding the contract.  There’s a difference between doing a deal with a gun near your head as opposed to pressed up against your temple ready to fire.  However, the downside here is that this action by American may continue to fuel the pilots’ belief that they can keep pushing the envelope on a new contract.  And, it won’t do anything for the relationship between AA and the pilots if the judge voids the contract.

The pilots are the last group to agree to a new contract.  Agreeing to new terms with all of it’s unions is a big part of what AA needs to accomplish to exit bankruptcy.  Who knows?  They may even be able to acquire US Airways instead of the other way around.  They are the bigger (and much more well run) airline.  It’s not completely impossible, and some are even discussing it.