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More labor pains at AMR
September 17, 1999: 1:13 p.m. ET

Flight attendants reject pact that swapped profit sharing for raises
By staff writer Chris Isidore
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NEW YORK (CNNfn) - American Airlines, hit by an illegal work stoppage by its pilots in February, may have more labor pains on the horizon as almost three quarters of its 21,000 unionized flight attendants rejected a proposed six-year agreement in voting announced Friday.
     The Dallas-based airline doesn't face an immediate work stoppage. It indicated a willingness to go back to the table with the Association of Professional Flight Attendants to reach agreement on a new deal.
     Shares of American's parent AMR Corp. (AMR) were up slightly in morning trading. The rejection didn't surprise Wall Street analysts. Sam Buttrick of PaineWebber told CNNfn it would be unusual at this juncture to see a tentative agreement not rejected, and it's become a tactic of expressing dissatisfaction. Salomon Smith Barney's research people also told the network the move was broadly expected.
     The National Railway Labor Act, which controls labor relations in the airline industry, requires a declaration of an impasse in negotiations by the federal National Mediation Board and the expiration of a cooling-off period before a union can legally go on strike.
     "We are disappointed that the contract did not ratify, but we respect the democratic process and our flight attendants' opinions," said a statement from Sue Oliver, the company's chief negotiator. "We will continue to reshape the agreement to one that will better meet flight attendants' interests."
     The rejected pact would have given members a 15.9 percent wage hike over six years, retroactive to November. It included a 3 percent wage increase effective November 1998 and an additional 3 percent signing bonus. But under the rejected pact, flight attendants would give up profit-sharing lump-sum payments of up to 8 percent of their wages annually to get those increased wages. The payment for 1998, paid earlier this year, was the only one to reach the maximum 8 percent. The average profit-sharing payment had been in the range of 3 percent of wages, according to the union.
     "Many members voiced a desire to have a wage increase that kept profit sharing," said Greg Pinelo, spokesman for the union. "It (trading profit sharing for wage increases) was a step many members weren't ready to take, even though our analysis showed it was the best way to maximize flight attendant income."
     American may find a tougher union stance when it returns to the negotiating table with the APFA. The independent union is facing organizing efforts of its members by both the multi-airline Association of Flight Attendants and the International Brotherhood of Teamsters, which represents flight attendants at Northwest Airlines along with its other transportation employees. Pinelo said the efforts by the other unions won't change the bargaining stance of the union's leadership, though.
"I think any future approach will be what it always has been, to get the best agreement for our members," Pinelo said.
American was hit by a pilots' sick-out in February that was declared illegal by a federal judge. It was sparked by pilot anger about the plans for integrating Reno Air into the American system. That integration was completed in August without any agreement with the Allied Pilots Union, which represents the 9,000 pilots at the airline.
     The existing American flight attendants contract was reached in 1995 through third-party arbitration after a five-day strike in November 1993 that was halted by invention by President Clinton.
     Several other airlines have seen flight attendants rejected initial contract agreements this year. Most recently, 11,000 Teamster flight attendants at Northwest rejected a contract in August that would have given them an average 25 percent wage increase and an 80 percent improvement in pension benefits after going 10 years without a pay raise. Brett Caldwell, spokesman for the Teamsters, said the union is polling its members at Northwest and hopes to be back at the negotiating table in October. Back to top


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American Airlines

Association of Professional Flight Attendants

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