Swelbar: Is The Union Leadership At American Really Representing The Membership’s Best Interests?

A merger for the sake of a merger inside of bankruptcy is not going to make the creditors want less


From the Swelblog, written by William S. Swelbar, a Research Engineer in the Massachusetts Institute of Technology’s International Center for Air Transportation, where he is affiliated with the Global Airline Industry Program and Airline Industry Research Consortium.

Find the original post here: http://www.swelblog.com/articles/is-the-union-leadership-at-american-really-representing-the.html

 

Delta is cutting international capacity by 3-4 percent in the face of economic weakness. In an effort to improve profitability, United has announced capacity cuts for 2013. Federal Express just announced a 3-year plan to cut $1.7 billion in costs mainly in its Express unit as revenue suffers from high oil prices and the fact that customers have found cheaper alternatives. The cost cuts will largely be accomplished through headcount reductions which work to eliminate fixed costs.

If FedEx is seriously evaluating headcount at a perpetually profitable business unit, then so should those who believe that American and US Airways together would not need to trim costs any more than has been done at each airline in restructuring.

This is why it is so puzzling to me that Laura Glading, president of the Association of Professional Flight Attendants at American, continues to beat the drum for a merger between American and US Airways.

My guess is that Glading negotiated some concessions for flight attendants in talks with American because she is convinced, or has been promised, that a deal with US Airways will come with some sort of snapbacks or other icing that benefit her members and, perhaps, her position in what would be a larger, more powerful union.

That theory, however, ignores the economic reality of consolidation in today’s domestic market which has proven time and again that airlines with the highest costs have a distinct competitve disadvantage. So Glading continues to view her world through rose-colored glasses, preaching the purported labor benefits of a merger that can’t hope to succeed without the strict cost discipline neither she nor Parker are willing to acknowledge.

Recently, Glading asked flight attendants at both airlines to petition AMR’s Board of Directors to pursue a merger. The petition reads:

Dear AMR Board of Directors,

American Airlines is no longer the brand it used to be. Instead, this once great airline is now at the mercy of a dwindling network and an inferior product.

Fortunately, not all hope is lost. There is a way to right this ship. If American Airlines could merge with US Airways before this bankruptcy has run its course and the AA brand completely destroyed, we can all work together to get American Airlines back on top.

The US Airways merger plan is the best option to correct the problems AA faces. I encourage you to pursue the only path available that will lead American Airlines out of bankruptcy stronger than the day it entered: a merger with US Airways.

American Airlines + US Airways: Our Future Depends On It

One has to wonder exactly what Glading was promised to press so hard for a plan with such limited economic foundation. If US Airways brings so much to the table, then why did the Delta employees band together to block Parker’s ardent overtures? Why did United leave US Airways at the altar at the eleventh hour when a better partner emerged? Yet at American, the unions’ leadership seems to believe that a marriage with US Airways is some sort of panacea that represents no pain/all gain for employees.

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