Trouble in Paradise: Airlines Face Tension From Oil and Unions

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US Airways Plane

Source: http://www.flickr.com/photos/neilarmstrong2/

Members of the International Association of Machinists and Aerospace Works (IAM), the largest union at US Airways, are making strike preparations. IAM has been negotiating with the management of the newly merged American Airlines Group (NYSE:AAL) over an issue of wage discrepancy between US Airways workers and American Airlines workers who do the same work. IAM is negotiating alongside the Transport Workers Union, IAM’s counterpart at American Airlines.

IAM has reportedly been at the negotiating table for more than two years but has been unable to reach an agreement with American Airlines Group CEO Doug Parker. IAM spokesperson Joe Tiberi told The Street that ”We’re close, but the big sticking point is that US Airways wants our members to accept less than they have already given to American employees for the same work. We will never agree to that.”

The airline, for its part, wants put both groups of workers on the same contract before they equalize the pay. As it stands, however, the discrepancy is pretty severe. Top-scale fleet service workers are paid an annual wage of $42,785 at US Airways, about 10 percent below what top-scale fleet service workers are paid at American Airlines. Moreover, there is no scheduled raise for US Airways workers, while American Airlines workers are due for a 2 percent raise in September.

The prolonged negotiations have strained relationships between Parker and the unions that represent many of his workers. Just last week, Parker criticized former management for its poor relationship with the company’s labor force. Tiberi has called Parker a hypocrite, saying, “Doug Parker is talking about great labor relations when he has thousands of employees ready to go on strike.”

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