The American Airlines Bankruptcy, By: Bill Hazelip
American Airlines never flew out of Evansville in the 70’s, so unless I had a direct flight to my destination, I would always try to use American as my connector flight. It is difficult to believe that this proud airline is now filing for bankruptcy. Back in the 70’s no one was prouder of their job than an American Airline’s employee. So what happened? It seems good pay, benefits and working conditions were not enough for the union bosses. Little by little, each contract, the Airline found themselves giving more of the current and future operating profits to the union. Finally, concessions coupled with a three year recession and more union demands financially broke the company.
But American Airlines has always been an optimistic company, and even though running losses since 2008 they decided to give the union members a 3.2% immediate raise followed by annual 1% raises.
So, how did the airline’s union address this good fortune? —–By not allowing the union members to vote on the contract. Even though, American’s wages, benefits, work rules, and pensions are the mostly costly in the industry the unions bosses said, give us 10% upfront and 7% each year thereafter. American Airlines already gives their employees $800 million more than their airline competitors.
As the WSJ says, “around the world, we are hearing the death knell for the expansive benefit system, a system that was built for another era!” In our city, we know too well how the Union Label turned a once proud industrial giant of furniture, appliances, autos and plastics into a city of empty manufacturing plants, empty warehouses and even empty ———union halls!
Why is it so difficult for union leaders and Socialists to understand why the middle class is disappearing?
Well said. Let the unions follow their masters in the Democratic Party in their inevitable demise. This country will be a better place without either the unions or the Democrats, but we will be even better off if they both implode. Simultaneously.
Sadly, greed on either side of the table
Is truly the problem. To have a proud work
Force you must pay respectable wages
And value all employees. The two go hand in
hand. It is all about working together.
We agree but the flying public can’t expect to pay rock bottom fares like $290 round trip tickets to Los Angeles from Evansville for respectable wages to be sustainable. The airlines are between a rock and a hard place. They need the volume and respectable prices to operate at a profit. Every time they raise prices people stop flying. The rock on the right of them is the free market demand that this very entrepreneurial business competes in. The rock on the left is the socialistic cost structure that labor contracts AND fuel prices stick them with. Something has to give and labor is part of that something. Lets hope that there is a balance that will allow for good service at affordable prices that will sustain respectable wages.
Comments are closed.