American Airlines asks court to halt `illegal slowdown’ by mechanics unions

by Kim Boateng Posted on May 21st, 2019

Dallas, Texas: American Airlines Group Inc. asked a federal court to halt an “illegal slowdown campaign” by unionized employees, saying the action had disrupted the travel plans of 125,000 passengers in the last three months.

Mechanics are taking too long to repair jetliners and refusing to work overtime in an effort to gain leverage in contract talks, American said in a lawsuit filed Monday in federal court in Fort Worth, Texas. The alleged slowdown will crimp travel for 3,400 passengers a day if it continues into the summer, the airline said.

The lawsuit raises the stakes in a standoff after federal mediators suspended talks last month, saying they didn’t see a way to resolve differences between the two sides. The TWU-IAM Association, which represents 30,000 employees in 12 work groups, is the only major union at American that still lacks a complete contract following the carrier’s merger with US Airways in 2013.

American and the union haven’t been able to agree on issues including pay, health and retirement benefits and limits on outsourcing work. The National Mediation Board is overseeing negotiations between the two sides and will determine the next steps, which could include moving closer to a possible strike.

The union didn’t immediately comment.

‘Inordinately Long’

Southwest Airlines Co. had a similar dispute earlier this year. The Dallas-based carrier asked a federal court to order its mechanics and their union to stop reporting excessive maintenance issues that it said were grounding an unusually large number of aircraft.

The Aircraft Mechanics Fraternal Association warned that Southwest’s lawsuit could discourage workers from reporting aircraft damage. The two sides got a warning from the Federal Aviation Administration, which said March 8 that the contentious contract talks and legal fight were putting the carrier’s safety at risk. The company and the union reached a contract agreement in principle about a week later.

American said its mechanics “en masse” were “taking an inordinately long time to repair aircraft.” The company also said employees refused overtime and maintenance trips, including weeks “with a 100% field trip refusal rate” at its Charlotte, Phoenix and Philadelphia hubs.

The number of out-of-service aircraft at 7 a.m. each day rose to an average of 44 on May 13 from 36 on Feb. 4, the carrier said.

The union and the company had their 17th negotiating session with federal mediators on April 25, according to the filing.

“American estimates that, for each day that the slowdown continues into the summer, it will disrupt the travel plans of approximately 3,400 additional passengers per day,” the airline said in the filing.

Max Grounding

American said mechanic productivity should be higher than normal due to the grounding of the Boeing Co. 737 Max. American has 24 of the single-aisle planes, with another 16 scheduled for delivery this year. Regulators barred the plane from flying more than two months ago, following the second deadly crash in a five-month span.

“Based on the amount of maintenance that American’s 737 Max fleet would require on a daily basis, the grounding of these aircraft has freed up an estimated 180 man-hours on average of mechanics’ time per night to work on other aircraft,” American said. “As detailed in this complaint, however, mechanic productivity has significantly decreased.”

American cut its 2019 profit forecast in April, blaming an estimated $350 million hit from the worldwide grounding in March of Boeing 737 MAX planes, forcing thousands of separate flight cancellations during its busiest travel season.

A prolonged MAX grounding coupled with mechanic-related disruption could further hurt profit, analysts said.

Shares of American closed 2.5 percent lower at $30.96 on Monday after Morgan Stanley warned of higher labor costs and downgraded the stock to “equal-weight.”

American is also in contract talks with unions representing its flight attendants and pilots, whose contracts become amendable in 2019 and 2020, respectively.

The airline said it has offered its mechanics unions Transport Workers Union of America and the International Association of Machinists an industry-leading proposal in all key respects, including pay and benefits.

The case is American Airlines Inc. v. Transport Workers Union of America, 4:19-cv-00414-A. U.S. District Court, Northern District of Texas (Fort Worth).

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