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American Flight Attendants Dispute Costs

Stocks in this article: AMR

DALLAS ( TheStreet) -- Flight attendants at American (AMR) are disputing the airline's contention that a high-cost contract makes its flight attendants the industry's highest paid.

Rather, the airline's practice of providing three-class service on international flights requires higher staffing levels, increasing the cost per available seat mile for flight attendants, the Association of Professional Flight Attendants said. On the plus side, the three-class service provides uniformity with service at partner airlines such as British Airways and Japan Air Lines, and results in higher revenue.

"It's not the contract that's driving American's costs up -- it's the staffing," said Dan Akins, an airline economist who provides analysis for labor unions, speaking to reporters on a media conference call. Akins said American's domestic flight attendant costs are in the middle of the pack, at about 0.6 cents per available seat mile, but American's international flight attendant cost is about 0.95 cents per ASM.

American spokeswoman Missy Latham reiterated that American flight attendants are among the industry's highest paid, partially because they work fewer hours. She said "benchmarking flight attendants on a per hour basis is more meaningful" than comparing CASM numbers, but American's costs are high by either measure.

As expected, the union asked the National Mediation Board to release it from mediation after two years of talks. "We've been working under a concessionary contract since 2003," said President Laura Glading. "We have not been able to negotiate a contract in two years." The union is seeking to restore much of the concessions it gave in order to help the company avoid bankruptcy in 2003. She said that, "Once the company feels the pressure (from a release), we will get a deal." The union represents 16,550 active flight attendants.

Glading said the union is seeking to avoid a strike, even to the point of agreeing to reduce staffing by 802 positions in the second year of the contract. "It was heart-breaking and gut-wrenching, (but) I thought it was going to be the road map to a deal," she said. "Our proposal was sort of an aggressive proposal. We thought we were getting to the end."

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