American Airlines Pilots Union Says Takeover Talks Are Happening — “Any Path Forward” Is On The Table
The President of the American Airlines pilots union favors merger discussions that would have another airline take over the carrier. Three months ago his union rejected declaring no confidence in CEO Robert Isom and sought a meeting with the board, but the board refused to meet.
Now, the union President says he’s taking meetings with Wall Street analysts and journalists promoting their view that:
- American management lacks a long-term strategy
- The status quo is unacceptable
- They’re open to “any path forward” (like mergers) that improve the airline.
We have seen little in terms of vision, culture change, and operational improvements to believe that meaningful positive progress can be achieved in an acceptable timeframe.
This is prompted by United CEO’s public acknowledgment that he pitched a merger – and he “encourages” American’s pilots to read Kirby’s message on how “such a merger would be transformative for both airlines and how it could withstand regulatory scrutiny.”
He says American management keeps asking whether anyone is tralking to them about a takeover plan. “That answer is, ‘Yes.’” And he wants American’s board to consider these proposals.
There are a number of motivations for this. There’s a combination of sincere belief that overthrowing management would lead to greater profits, which means (1) more profit sharing under their contract and (2) more resources to clai in their next negotiation, and the pilots union is in the midst of its own internal power struggle and merger battle so leadership needs to look aggressive and confrontiational to their base.
A large faction of union members are looking to merge their independent union with the Air Line Pilots Association. A year and a half ago, a union President who opposed merging with ALPA was recalled.
In other words, the message from the American Airlines pilot union is both true and a reflcetion of its internal politics. But it’s also a problem for the airline, where the water cooler talk of replacing the CEO has died down compared to the fever pitch of three months ago.
And it’s somewhat ironic because the airline seems to finally have a vision and strategy for the first time in 12 years. The CEO isn’t out selling that vision to employees, investors and customers. But the strategy appears to be there – to make investments in customer experience so that customers prefer (or at least do not avoid) the carrier. And it comes at precisely a time that Delta may be faltering.
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