American Airlines Flight Attendants Will See Huge Raises In New Contract….For Now

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
As noted by JonNYC, the Association of Professional Flight Attendants (APFA) made public the details of the tentative contract. The tentative deal includes:

hourly pay increases
boarding pay
retroactive pay
profit sharing
improved 401(K) matching
Let’s briefly look at each one.

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

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.

Improved 401(K) Matching, Per Diem
Per diems and 401(K) contributions will also go up.

Company contribution from 3% to 5%
Matching contribution from 2.5% to 4%
9% is not bad…

Domestic per diems will rise over 30% over the next four years.

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.

CONCLUSION
Details have been revealed about the tentative new contract between American Airlines and its flight attendants. By in large, the union did an excellent job in securing back pay, boarding pay, and pay hikes to keep up with inflation.

But wein the long-term, all these gains may be for naught if AA cannot figure out its flying problem…