American Airlines unions are now asking for binding arbitration in their negotiations with American Airlines management as a pathway that they think will yield more satisfying results than a court order from bankruptcy.  In theory, this is quite likely the case.  However, that’s in theory.

I’m not sure arbitration works for the unions. Yes, it does force both sides to accept things they don’t want and both sides get some of what they do want.  However, arbitrators also have to consider the real facts surrounding what the business can support and the airline is far better positioned to press its case in this area.  Unions, on the other hand, aren’t. 

Furthermore, an agreement out of arbitration is still an agreement that the airline can get tossed out in court if the right argument is made.  The trick is in getting an arbitrated agreement that both parties can actually survive with and that a judge will find sensible and equitable. 

Moreover, another issue that arbitration doesn’t address, at least for AA’s management, is the need for quick resolution to labor.  American can hardly afford to spend months pleading its case, waiting many more months for an answer and then making a business plan.  It needs some certainty on the labor front in order to go forward with a business plan that addresses successful exit from bankruptcy.

I expect we will see AA resist arbitration, press its case on the publicity front with its unions and start action with the courts to change the labor agreements that way.

Filed under: Airline News by ajax