As American Flight Attendants Vote, Charlotte Is a Wild Card

NEW YORK ( TheStreet) -- Laura Glading is a labor hero, someone who stuck her neck out to enable a merger that benefited her members and changed the face of U.S. commercial aviation.

But that doesn't mean Glading, who is president of the Association of Professional Flight Attendants, has pleased everyone with the tentative contract agreement that she is now trying to sell to members during "road shows" at all 13 American (AAL) and US Airways flight attendant bases.

"Every time we put a contract out, it's tough," Glading said in an interview. "In 2003 and 2012, we had to ratify concessionary contracts, and I was heartbroken listening to some of the stories (about the impacts.) But this time, the contract is a tremendous improvement. We knew we would not have everything everybody wanted, but we wanted for everyone to be better off tomorrow than they are today."

Most importantly, "we wanted to put the most money where it would reach the most people, and that is in wages," Glading said. The commitment to industry leading wages was so strong that when Delta (DAL) announced in September that all employees would get a 4% raise, Glading got on the phone and convinced American executives to match it.

For a 15-year flight attendant working 80 hours a month, the hourly rate goes from $47.52 to $53.52 and then to $58.50 after four years. (The tenure requirement falls to 13 years.) The contract is worth $193 million more than the current value of the existing American and US Airways contracts, APFA said. Top-scale US Airways flight attendants get a 23% raise by the end of the contract.

Glading played a key role in mustering support for Doug Parker's management team, which staged an unfriendly takeover of American in 2013. She not only joined other American labor leaders as early backers of the effort, but also she was a key player in convincing the creditors committee to back it and to install Parker's team at American.

Now, Glading said she is confident the contract deal will be approved by a majority of the 25,000 American flight attendants, about two-thirds of whom work at legacy American. But she acknowledges that "Charlotte is the most negative when it comes to the contract -- I'm not sure why." With about 2,400 flight attendants, Charlotte is the biggest US Airways base.

In recent years, US Airways flight attendants have not been quick to approve new contracts. In 2012, seven years after the merger between US Airways and America West, management and the Association of Flight Attendants finally reached a tentative agreement on a new single contract for the combined carriers. It was strongly rejected.

Then a modified version, widely expected to pass, was also rejected. Resistance was centered in Charlotte, which produced a 64% no vote. Not until a third vote in 2013 was another modified deal approved.

A factor in the voting this time may be that US Airways management courted American unions in trying to take over American. The US Airways unions felt cut out of the process. Some resentment lingers.

 Reflecting recently on APFA's assertion that the tentative agreement reflects the best of both contracts, a Charlotte-based US Airways flight attendant declared Saturday "Best of both, my backside."

She and a companion, both of whom asked not to be named, said health care changes are the new contract's biggest flaw. Single US Airways flight attendants currently have the option to get 100% coverage for $180 a month, but 100% coverage is going away.

Glading said American is phasing out 100% coverage going forward because the Affordable Care Act boosts the tax rate on such plans.

Here are three examples, out of many, of contract provisions that trouble the US Airways flight attendants.

  • In the new contract, American flight attendants would get a 9.9% 401(k) match, while US Airways flight attendants would get 5.5%. Glading said the difference reflects an effort to offset the better medical coverage at US Airways, which includes a $3,000 payment to offset health care cost increases. By 2019, everybody will have the same medical coverage.
  • US Airways flight attendants currently can spend up to 11 hours a day on duty; the new contract allows for 15 hours a day. Glading said an offset there is that the new contract limits duty time to two trips a day for anyone who works more than nine hours.
  • In the event of an unusual event, such as bad weather, that interrupts a flight attendant's schedule, the US Airways contract allows flight attendants to bump revenue passengers so that they may fly to their home base, while the American contract provides "positive space," but not if it means bumping a passenger with a reservation. The new contract uses the American language.
If the contract is not ratified, it will -- under a negotiated procedure -- be submitted to arbitration. The Charlotte flight attendants said that doesn't sound so bad, relatively speaking. They asked: "How much worse can it be?"

Glading calls that question "mindboggling," and said the new contract is worth $82 million more than the industry standard that would be the basis for an arbitration decision.  "We would lose that much each year of the contract," she said.

-- Written by Ted Reed in Charlotte, N.C.

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At the time of publication, the author held no positions in any of the stocks mentioned. This article is commentary by an independent contributor, separate from TheStreet's regular news coverage

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