American Airlines may have a big problem on its hands (customers won't like it)

Fresh on the heels of American Airlines  (AAL) - Get Free Report inking a new deal with its pilots union, another critical group of workers is threatening a walkout. 

The Association of Professional Flight Attendants on Aug. 30 said American Airlines' 26,000 flight attendants overwhelmingly voted to go on strike, upping the ante to cut a deal or risk disrupting air travel for its customers.

Airlines are knee-deep in negotiations

Airlines paused changes to worker compensation during covid-19 because of uncertainty. However, travel has rebounded since 2020, when lockdowns were common, and that's proven to be a boon to airline operators, including Delta Air  (DAL) - Get Free Report, United Air  (UAL) - Get Free Report, and American Airlines.

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Delta Air and United Air reported revenue grew 13% and 17% from one year ago in the second quarter. American Airlines grew more slowly, but its revenue rose 5% to $14.1 billion in the quarter. More travelers and lower jet fuel costs contributed to American Airlines reporting earnings that skyrocketed 153% year-over-year to $1.92.

This year, the airline industry's profitability has led its unions to press for compensation increases. So far, Delta, United Air, and most recently, American Airlines have inked multiyear contracts with pilots to ensure planes remain on schedule.

American Airlines pilots will receive an immediate 21% pay increase under its newly inked contract. The four-year deal also provides pay raises of 5% in 2024, 4% in 2025 and 2026, and 3% in 2027. Overall, pilot compensation will increase by 46% over the contract period.

Flight attendants demand their fair share

Now that negotiations are done for pilots, American Airlines flight attendants are similarly engaging with management on a new deal.

According to its union, over 99% of the American Airlines flight attendants who voted support going on strike if released from negotiations by the National Mediation Board. 

A strike won't happen immediately, though. A strike is subject to a process detailed in the Railway Labor Act governing airline-union relations. The process includes multiple steps to limit the risk of a strike, but a walkout by workers could emerge by November, when travel typically kicks off its busiest season because of the holidays, including Thanksgiving and Christmas.

In the meantime, travelers could see limited protests at airlines by off-duty workers.

American Airlines will likely work hard to avoid a strike that could disrupt customers' holiday travel. However, it's not guaranteed. Regardless, any deal cut with the flight attendants will likely be pricey.

American Airlines' new pilot contract is expected to cost the company about $10 billion. The airline industry's pockets are deep enough to cover the costs. However, that could change if travel trends reverse due to a souring economy. If so, travelers could see airfares increase to offset the added labor expenses. 

Airline attendants aren't likely to easily give up the fight for increased compensation.

"We are fired up and ready for a contract, said APFA National President Julie Hedrick. "They ignore this strike vote at their peril."

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