Details have been revealed about the new contract deal American Airlines has tentatively struck with its flight attendants and it represents a big raise for every flight attendant plus retroactive pay, boarding pay, and other benefits. But with AA losing money flying, how long will this new contract last?
Tentative Contract Will Give Flight Attendants Big Raises At American Airlines
Hourly Pay Increases
At the bottom end, entry-level wage would jump from $30.35/hour to $35.82/hour (18% pay increase). At the high end, senior flight attendants working at least 13 years with AA would jump from $68.25 to $82.24 an hour (20.5% pay increase). These numbers would rise each year as well for the next four years.
Boarding Pay
Flight attendants will receive boarding pay at hte rate of 50% of “standard” pay, in line with what Delta Air Lines flight attendants now earn.
Retroactive Pay
As is customary with flight attendant contracts, retroactive pay will be awarded between the time in which the contract became amenable and today. Specifically, that will include:
It’s striking that flight attendants will get a pay bump for the pandemic years when taxpayers continue to pay them despite virtually zero air travel demand…
Profit Sharing
While the APFA claims the new contract is more lucrative than what non-unionized Delta flight attendants recently gained, it is not…because Delta is so much more profitable.
Theoretically, AA employees will see a higher profit share, but that will require the company to be profitable. The new contract offers profit sharing equating to 10% of pre-tax earnings up to $2.5 billion and 20% of pre-tax earnings above $2.5 billion.
I Worry For The Future Of American Airlines
To be clear, I want all workers to earn a living wage and believe no worker should have to go on public assistance (doing so is essentially the employer passing the buck to taxpayers). But I put “for now” in my title because I do wonder for how long flight attendants will enjoy these higher wages. Or will this deal even be finalized?
Indeed, flight attendants typically reject the “first offer” as part of the pageantry union contract negotiations. Will they do so here in hopes of something even better?
The problem is American Airlines loses money flying. Its AAdvantage loyalty program has been able to prop it up, but a fundamental failure of leadership and vision has made world’s largest airline struggle to profit.
While that is not the fault of flight attendants, it is a problem for flight attendants because AA does not exist in a vacuum. There’s hope among some in the airline industry like United CEO Scott Kirby that airlines can simply raise prices in unison because demand is “inelastic.”
I do not agree with that assessment and I think we will also see carriers spring up to fill voids left by other carriers. It won’t be possible to keep routes high between busy city pairs because if American raises prices by limiting flights, other carriers like Spirit or Frontier will fill the void.
Thus, I am fairly pessimistic about AA’s long-term prospects. With demand tapering off after an extended “revenge travel” boom, the future is uncertain: and that is not good news for the Dalllas-based carriers or the pilots and flight attendants who have benefited (or will soon benefit) from higher wages.
Sure, we can all agree that CEO had no business making $31 million last year. But the real problem is the leadership of the entire C-Suite and how American Airlines has failed to keep up with its peers.
Thus, to flight attendants, I say enjoy your higher pay…while it lasts.