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August 10th, 2012 12:52 pm
American Airlines’ Labor Union Antics Continue

In yet another example of big labor flexing its destructive muscle to undercut American Airlines’ bankruptcy restructuring, the Allied Pilots Association this week rejected a contract offer from American that included pay raises and a 13.5 percent stake in the company, among other generous terms. 

To make matters worse, afterwards, the union board forced its president David Bates – who has a reputation for being both reasonable and pragmatic – to resign as seemingly a sole consequence of his support for American’s offer. 

It’s now beyond clear that the pilots union is going all in with US Airways CEO Doug Parker, who has made numerous promises to labor in his recent attempts to prematurely force a merger with American. This is the same CEO Parker who, since uniting America West with US Airways seven years ago,  has been unable to settle terms with the pilots of those airlines, even while he is now actively negotiating with American’s pilots. 

The fact remains that the entire airline industry was bloated during the last decade, and every legacy carrier has been forced to restructure to reduce their costs. While American – whose onerous labor costs are the highest in the industry – waited the longest to restructure, the company has recently excelled financially. To sustain its recent performance, however, there is no getting around the fact that it will need  to continue to cut costs, which means labor will have to agree to reasonable concessions.

Fortunately, a number of other unions have been more agreeable in their negotiations with American: mechanics and aircraft stock clerks represented by  the Transport Workers Union both ratified new accords this week. 

But if American’s pilots are unable to cooperate with their own labor leadership, colleagues and management to accept generous but realistic contract terms, they could effectively send their employer, or perhaps the entire airline industry, the way of the auto industry.

The difference this time being, the taxpayers won’t be there to bail them out.

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