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American has been negotiating since 2006 with its major unions representing pilots, flight attendants, mechanics and baggage handlers, but the talks stalled this month when the pilots union refused to allow the rank and file to vote on a management proposal for a 3.2% pay raise followed by 1% annual increases. The pilots demanded 10% upfront and 7% for each of the next three years, among other la dolce vita demands.
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American's wages, benefits, work rules and pensions are the most costly in the industry, a disadvantage that it puts at $800 million compared to its peers. The company is the last major U.S. legacy carrier to file for Chapter 11, which has allowed its profitable competitors like United and Delta to rationalize their labor obligations and extract union concessions. Perhaps those unions understood that sooner or later one of these airlines won't muddle through but instead go into Chapter 7 liquidation. The wonder is that it takes a strategic bankruptcy to underline this reality.
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American has been losing money since 2008 and negotiating since 2006. If the unions were reasonable a strategic bankruptcy wouldn't have been necessary.
My sympathies aren't with the pilots. I got a 2% raise last year. And consider myself lucky to have a job. US job losses are over 400,000 last month- again- and God knows how long this has been happening. Turning down 3.2% and demanding 7%???? Somebody needs to get real. I'd be escorted out the door if I tried that. And so would everyone else. Your friend forgets that graveyards are full of indispensable people.