The relationships that American Airlines has with its unions has been pretty bad for quite some time.  This really all kicked off with executive bonuses that were perceived to be out of line with airline performance both financially and operationally.  What’s worse, unions weren’t rewarded when executives were and the criteria for reward was fuzzy at best.

The relationships have only gotten worse over time.  In fact, I would attribute the rather militant direction of leadership for its flight attendants union, APFA, has been a direct result of American Airlines inability to establish any kind of rapport with that union in particular.

In short, there is no trust between the parties at all.  It’s gone and it doesn’t appear that executive leadership wants to improve those relationships.  The truth is that the executive team probably correctly realizes that that can’t be done in time to get the cost reductions it needs.  So why try to make friends right now?  It’s not an incorrect judgement.

These relationships are going to stink for a long, long time.  The courts will impose new terms and those terms will likely be oriented more towards productivity than just a reduction in pay.  American could get all it wants in the form of lower pay but the airline needs contracts that allow productivity to improve in order to be truly competitive with other national airlines in the United  States.  Other airlines have that (as a function of bankruptcy) and they don’t.

The exceptional shame of this all is that the unions won’t have much voice in the process.  They’re not well funded (in comparison to American Airlines) and any giveback at this point means almost certain loss of office for leadership of these unions.

American needs action now so it can maintain some control over its destiny.  Actually, it’s American Airlines executives who need action now to maintain some control over their destiny.  Failure to get cost reductions and enumerate a plan for revenue growth will result in a merger or a change in leadership.  The executive team has months, not year, to ensure their future.

The unions will fight.  They will argue loudly on behalf of their membership.  But there isn’t much to win here in court or out of court.  There is plenty of established law and precedent that says they will see reductions pay and changes in work rules that will allow American Airlines to sit roughly on par with its main competitors.

And the relationships are so bad now, there isn’t any reason to just go to court and get it done.  One way or another, there will be bad blood between management and unions and the sooner this is done, the sooner management can think about ways to repair the relationship in the future.

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