American Airlines and the unions representing more than 30,000 jet mechanics and fleet operations personnel have reached a $4.2-billion tentative five-year contract deal that calls for significant pay increases, benefit enhancements and protections against outsourcing.
Wage gains range from 4.5 percent to 18 percent, depending on the job title and certifications. Fleet Mechanics and Material Logistic Handlers will get a $6,000 signing bonus, while fleet operations staff, which includes titles like Fleet Service Clerk, will get a $3,000 payment.
The deal also provides for an “industry-best profit-sharing formula” for workers that will give them “10 percent of American’s first $2.5 billion of pre-tax income, as well as 20% of pre-tax-income above $2.5 billion,” according to Forbes.
The Transport Workers Union of America and the International Association of Machinists had been locked in a bitter battle with the airline for four years. The major point of contention was the company’s ability to outsource jet repair and maintenance to other countries with cheaper labor rates and less-stringent regulations.
In late 2018 the National Mediation Board intervened in the talks.
Last May, American Airlines sued the unions in Federal court in Texas, alleging they were deliberately orchestrating a slowdown to increase their bargaining leverage. This escalated tensions and prompted talk of a strike.
Unions: ‘Took Right Path’
“Together, after more than four years, the terms of these agreements are proof that we took the right path and achieved the best contracts in the airline industry,” the unions said in a joint statement announcing the tentative deal.
“Our Maintenance & Related and Fleet Service team members are the very best in the business and work incredibly hard to care for our customers,” American CEO Doug Parker said in a statement. “They deserve contracts that include meaningful improvements in pay, quality of life and job protections.”
The deal marks a key point for American, which declared bankruptcy in 2011 yet emerged to become a hot stock-market performer after its merger with U.S. Airways in 2014, making it the largest airline in the world in terms of passengers and revenue miles flown.
“When I took over the presidency, it seemed almost inevitable that American Airlines was going to succeed in shipping our aviation work overseas and just outsourcing in general across all titles—and we beat them back,” John Samuelsen, president of the TWU International, said in a phone interview. “We won the fight. We kept thousands of jobs on American soil and we won significant wage increases by collectively standing together against a greedy and unlikable company.”
‘Industry’s Top Pay Scale’
He continued, “We will have the industry’s leading pay scale upon ratification. And while this contract covers 30,000 workers, by the end of the contract the number [of covered workers] will be significantly more than that, because we brought a lot of work back in-house and back onto U.S. soil.”
During its bankruptcy, a judge granted American the latitude to outsource 30 percent of the work, Mr. Samuelsen said.
TWU members won an extension of their paid vacation from five to six weeks, and IAM machinists retained the bulk of their defined-benefit pension.
“It will take five weeks to roll this all out to the membership and the specific dates are still being finalized,” Mr. Samuelsen said.
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