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American Airlines offers pilots almost 17% in pay hikes-CNBC report

Jul. 01, 2022 3:03 AM ETAmerican Airlines Group Inc. (AAL) StockUALBy: Meghavi Singh, SA News Editor8 Comments

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kind of a misleading headline..thought it was all 17% at once (which would have been a shock)..instead it's 6% per year for three years...
Doctor_ECE_Prof profile picture
Wage inflation is there. I see it in plumber service, AC, lawn care and what not. Most of the youngsters get into useless degree programs and not many to do any practical, manufacturing jobs.
Tim Dunn profile picture
Considering that inflation in BIden's America is running over 8.5%, AAL recognizes that it must pay its people wages that at least keep up with inflation.

The real mystery is why UAL's union leadership agreed with UAL in offering such a sub-standard pay proposal that is on the verge of being shot down.
Note that AAL's offering is a company offering, not even a negotiated contract.

Given that American is slowing its capex while UAL is accelerating its spending to levels that exceed what any US airline has ever done, it is UAL that is on the verge of breaking the bank under crushing debt.

Those realities are incorporated into my assessment of AAL and UAL in these two recent articles



Of course the real barometer is when much financially healthier DAL and LUV weigh in esp. given that both have much more efficient operations and fleets and both will save at least a half billion dollars per year compared to AAL and UAL on fuel - because of LUV's fuel hedges and DAL's refinery strategy.

The carriers that get hurt in all of this are the smaller low cost and ultra low cost carriers such as JBLU, ULCC and SAVE whose business models are already buckling under much higher costs and an inability to capture higher revenue - as indicated by the losses for JBLU and SAVE and the very low margins for ULCC.
While ALK is projecting nice profits, they will have to spend much more on labor which will erode their margins much more so than for the big 4.

Never in the history of US aviation have the big 4 been more financially positively aligned relative to the smaller discount carriers
@Tim Dunn after hearing the details of AA’s contract offer, the Untied pilot’s MEC immediately stopped all roadshows for their contract. Sounds like they will be going back to the table. Word is the United pilots were going to handily vote down their TA anyway.
Tim Dunn profile picture
I think this all bodes well for airline labor. And it won't be just pilots. I know Delta gave raises to its non-contract personnel while it did not for pilots but there will be acute labor cost inflation - which is to be expected as airlines (at least most of them) start to make money again.
The bigger piece is that the low cost carriers other than LUV cannot withstand the level of pay raises that are going to be necessary to retain pesonnel. Even non-pilot airline jobs are less attractive given the massive inflation in the country. There will be a strong shift back to network/legacy carriers.
Don't say AAL, say taxpayers!

Capitalism in the US is a joke.
The company will happily pay pilots and flight attendants whatever they ask for and guarantee you now this company files bankruptcy within the next few years. AAL cannot withstand it’s crushing debt load much further.
@Jal7777 Do you or did you own AAL stock ?

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