For a long time, American Airlines management and the union representing flight attendants were in contentious negotiations over a new contract. In late July 2024, a tentative contract was reached, and over the past several weeks, members have been voting on whether or not to approve the new contract.
There’s now an exciting update, as this contract has been ratified!
In this post:
Details of the new contract for American flight attendants
The Association of Professional Flight Attendants (APFA) has today revealed that members have ratified a new contract. 95% of flight attendants voted, and 87% of votes cast were in favor of this new contract.
For American’s 28,000 flight attendants, this new contract is worth around $4 billion in incremental value over the previous contract. It includes hourly pay increases, retroactive pay, boarding pay, and profit sharing, among other things. The union claims that these pay rates are better than at Delta, which otherwise sets the standard in the industry (though I think the math on that is a bit fuzzy).
When it comes to pay increases, flight attendants will get an immediate 18-20.5% pay increase as of the date of signing, depending on their years of service. Then they get a 2.75% pay increase in the second year, a 3% pay increase in the third year, a 3% pay increase in the fourth year, and a 3.5% pay increase in the fourth year.
For example, American’s most junior flight attendants will go from earning $30.35 per hour, to earning $35.82 per hour upon the date of signing, to earning $40.42 per hour in the fourth year. Meanwhile American’s most senior flight attendants will go from earning $68.25 per hour, to earning $82.24 per hour upon the date of signing, to earning $92.79 per hour in the fourth year.
For those wanting to do some very basic math, flight attendants typically work somewhere around 1,000 hours per year — some a little less, and some a little more.
On top of that, American flight attendants will get significant retroactive pay, as a percentage of their earnings in previous years. They receive 3% retroactive pay for 2020, 4% retroactive pay for 2021, 4% retroactive pay for 2022, 10.8% retroactive pay for 2023, and 20% retroactive pay for 2024 (through August 31, 2024).
American flight attendants will also finally get boarding pay, calculated at 50% of the rate of standard hourly pay, and adjusted for how long the boarding process is. Since boarding is 30 to 50 minutes, this will range from $8.96 to $34.27, depending on seniority and boarding length.
Flight attendants are also getting an official new profit sharing benefit (though one wonders if there will be any profits to share, given American’s performance). Profit sharing is equal to 10% of pre-tax earnings up to $2.5 billion, and an amount equal to 20% of pre-tax earnings above $2.5 billion. This is the same formula that other work groups at American receive, including pilots.
I’m thrilled to see a new contract ratified!
As a frequent American passenger, I’m delighted to see flight attendants ratify a new contract. For one, they deserved more pay, because the previous pay rates just weren’t enough for many employees to live on.
I know this will do a lot to help the lives of flight attendants, both in terms of retroactive pay, as well as higher ongoing pay, both while inflight, and during boarding. Flight attendants didn’t get everything they wanted, but this seems like a fair compromise.
For us passengers, it should hopefully also lead to better morale, and those red “WAR” lanyards and pins will now go into retirement. 😉
Now, it’s going to be interesting to see how this contract impacts American’s long term financials. American has by far the weakest financial performance of any of the “big three” US carriers, so actually paying for these wage increases could be a challenge. Then again, frontline employees shouldn’t be on the hook for the mismanagement by American’s executives.
Bottom line
American flight attendants have finally ratified a new contract. This is a rich contract offering $4 billion in incremental value over the life of the contract. This includes significant hourly pay increases, boarding pay, retroactive pay, and more.
What do you make of American flight attendants getting a new contract?
As of September 2024, the average hourly pay for waitresses in the United States is $15.80. However, the range of hourly wages can be as wide as $6.01–$28.61. The majority of waitresses make between $11.54 and $16.83 per hour. [ZipRecruiter]
Celebrate now, but pay increases of that magnitude are not sustainable long term without fare increases, layoffs, network reductions, and/or AAdvantage devaluations.
It's a shame that so many years of AA BOD and executive mismanagement...
As of September 2024, the average hourly pay for waitresses in the United States is $15.80. However, the range of hourly wages can be as wide as $6.01–$28.61. The majority of waitresses make between $11.54 and $16.83 per hour. [ZipRecruiter]
Celebrate now, but pay increases of that magnitude are not sustainable long term without fare increases, layoffs, network reductions, and/or AAdvantage devaluations.
It's a shame that so many years of AA BOD and executive mismanagement led to this...
Does anyone remember back when the airlines were regularly declaring bankruptcy because they couldn't sustain their labor costs? All of these new contracts with huge wage increases make me wonder whether the past will become the future.
It will. Or massive layoffs across the board will take place.
As much as some will bristle at the suggestion, don't forget that it is Delta that started the huge massive pay raise movement in the US airline industry. It was first to settle with its pilots for an amount that was 2X what UA offered its pilots in the first contract that was rejected.
DL followed with a raise for all of its non-union employees and has raised their salaries several times and added...
As much as some will bristle at the suggestion, don't forget that it is Delta that started the huge massive pay raise movement in the US airline industry. It was first to settle with its pilots for an amount that was 2X what UA offered its pilots in the first contract that was rejected.
DL followed with a raise for all of its non-union employees and has raised their salaries several times and added boarding pay for their flight attendants.
Multiple airlines have updated their investor guidance and DL says that it is still expected to meet its earnings target for the year. UA did not revise or update its 3rd quarter guidance (the 3rd quarter ends in about 2 weeks) which says that the benefit of lower fuel did not hit the bottom line - likely because UA's hit from CrowdStrike was about the same amount.
UA will spend as much or more than AA to settle with its flight attendants - so $500 million in retro plus hundreds of millions more in higher pay per year.
AA's pay raises are wiping out the ability to make money for the rest of the year and likely in the 1st quarter. They will likely be profitable for one quarter out of a year at these labor rates and their current revenues.
WN has their own issues but they have settled with all of their labor groups, essentially locking in high labor costs on a weak revenue base.
It is very rare that a company uses high labor rates as a competitive advantage but that is what DL has done; DL is still generating the highest profits and highest revenues in the US airline industry and has forced its competitors to raise labor rates well above what those competitors would have otherwise done.
The financial impact to AA of this aside, I’m thrilled this has come to a fair conclusion. Pretty sure it’ll bring a swift end to the other companies’ negotiations too. Amtrak also just ratified a new contract with their on-board service TCU/ASWC employees. We can all enjoy a few years of peace until the contract comes up again, then lather rinse repeat.
APFA says retro is worth $514 million. I have said over $500 million for months and that is right what AA will have to spend.
UA will spend as much or more.
I was just on long haul American and transcontinental American. The food sucks, for almost 16 hours one half assed meal and the other more of a snack. Refreshments in between the services totally wiped out. Hot snacks never offered or even when requested. AA took out the mattress pads leaving a thin flimsy duvet that doesn’t even cover one properly. I asked a FA if I could have a sundae later on in the...
I was just on long haul American and transcontinental American. The food sucks, for almost 16 hours one half assed meal and the other more of a snack. Refreshments in between the services totally wiped out. Hot snacks never offered or even when requested. AA took out the mattress pads leaving a thin flimsy duvet that doesn’t even cover one properly. I asked a FA if I could have a sundae later on in the flight. One said sure the other said she already put away the stuff and won’t take it out again. Really sally how much work is it to heat up some caramel sauce and throw some nuts on ice cream? I was lucky the food was somewhat decent this morning at Greenwich
Quality – Time – Price. Choose any two.
DL - Quality and Time.
UA - Quality and Price.
AA - Time and Price.
The management at AA has established a culture of minimalism and the FAs have embraced it. While not all of the FAs provide poor service, it is written about on a consistent basis for a reason.
AA’s operation has a top-down management style. Only when the seats are empty will AA’s culture change.
Help change American Airlines !
Miles devalued in 3……2…….1………
Thrilled to see corporations finally give some love to their staff. Will probably improve the experience as a customer flying AA
Ask me if I care . Do you ? Go on and ask me. I just did.
Ben, just want to point out a mistake in your numbers. The most junior FAs at date of signing will be making $35.82 as you mentioned. However 4 years later (date of signing plus 4), they’ll be making $53.46, not $40.42. It’s a sliding scale that goes diagonal, not straight across. $40.42 is what first year FAs will be making 4 yrs from now.
Ever consider an article about ATC pay? The rest of the aviation industry is leaving us in the dust.
Some of these FAs are or will be making more (strictly on an hourly rate basis) than controllers at the most difficult/complex facility in the nation... New York TRACON.
Should we value Air Traffic Controllers less than FAs? If so, I don't see how you can continue to expect quality work. The public already claims...
Ever consider an article about ATC pay? The rest of the aviation industry is leaving us in the dust.
Some of these FAs are or will be making more (strictly on an hourly rate basis) than controllers at the most difficult/complex facility in the nation... New York TRACON.
Should we value Air Traffic Controllers less than FAs? If so, I don't see how you can continue to expect quality work. The public already claims to have seen some degredation in the last few years. (Or, I posit, it may be merely that ATC is a lot more publicly monitored for the sake of likes/views, and so more 'near misses' are publicized.)
But thank goodness Biden is giving us 2% this year! /s
It’s a shame what ATC is having to put up with, you guys deserve way better. Hopefully NATCA can do something.
100% agree on ATC pay and have said so many times on this blog and elsewhere. ATCs should be a highly sought-after and hyper-competitive position, like banking or big4 or biglaw; and the only way to make that happen is with very significant pay hikes. Draw in top-tier talent, push out incompetents.
All that said, contra what seems to be the implication of your last sentence, the alternative to Biden/Harris obviously is worse, not better,...
100% agree on ATC pay and have said so many times on this blog and elsewhere. ATCs should be a highly sought-after and hyper-competitive position, like banking or big4 or biglaw; and the only way to make that happen is with very significant pay hikes. Draw in top-tier talent, push out incompetents.
All that said, contra what seems to be the implication of your last sentence, the alternative to Biden/Harris obviously is worse, not better, here; and to your point about "near misses" has made public attention to these incidents more publicly salient through wholly unfounded and irredeemably racist opposition to DEI initiatives. It's who they are at an unfixable level: deplorables.
@digital_notmad, my critique of Biden is not meant to imply anything of the sort regarding the alternative.
I appreciate that you are vocal on our behalf. We need more like you.
I typically bill somewhere around 3,000 hours per year.
so you're a lawyer with a stupid billing rate?
Clearly he works longer hours than "most" flight attendants.
You can't possibly be doing your best for your clients if you're working that much. Reminds me of the fools I used to work with at an investment bank in NYC, who'd compete to work the most hours every week and still pretend they were "adding value". If you were a neurosurgeon or a commercial pilot your have been drummed-out long ago for being a dangerous liability to life and limb.
he's not. he probably works 4 hours a day but has a billing rate of 5 minutes per half hour or something where bills 12 hours by noon.
It's how lawyers are
You GO Girl ! LOL !
yep our protagonist here says he "bills" 3000 hours per year; he said nothing about how much he works.
That's ~only~ a 60 hour work week (based on 50 working weeks of the year). That's really not that excessive. Try working for a tech startup, where you could EASILY work 80 hours a week at a much lower rate of pay.....
In general, at a law firm, if you're *billing* 3000 hours as an honest lawyer [insert joke here], you're *working* 4000+++, easily in line with the numbers you cite. However, more to the point for our PeeWee here, as a putative partner at such a firm, billing numbers that high, to the extent we accept them as real, suggest that you are a workhorse partner, not a rainmaker partner, as the rainmaker partners at a...
In general, at a law firm, if you're *billing* 3000 hours as an honest lawyer [insert joke here], you're *working* 4000+++, easily in line with the numbers you cite. However, more to the point for our PeeWee here, as a putative partner at such a firm, billing numbers that high, to the extent we accept them as real, suggest that you are a workhorse partner, not a rainmaker partner, as the rainmaker partners at a firm are business-developing much more than they are billing, particularly if you're making 9M/yr as our friend here claims to do (those multi-mil numbers come from revenue share based on relationship clients).
"I typically bill somewhere around 3,000 hours per year"
That's not anything to boast about. It either means that you can't deliver enough quality work within your normal working hours, or it means that you're incapable of negotiating clients onto more profitable fixed fee engagements.
Real Biglaw forms don't do fixed fee for any sort of sophisticated work, and they turn away tons of work because there is a line of other clients that will pay, even with rate increases of 6-10% per year.
I'm a two-million-miler+ with them, but have declined to book or fly AA for more than a year and a half and resolved not to do so until this was ratified. Didn't do so one time!
I didn't want sour morale on board, and I certainly didn't want operational interruptions or even a strike. So now it's ratified, and based on my personal resolve I am free to book them.
BUT . ....
I'm a two-million-miler+ with them, but have declined to book or fly AA for more than a year and a half and resolved not to do so until this was ratified. Didn't do so one time!
I didn't want sour morale on board, and I certainly didn't want operational interruptions or even a strike. So now it's ratified, and based on my personal resolve I am free to book them.
BUT . . . there's now been so much other negative news -- dismal finances, operational glitches, Charlotte hell, even gate-agent problems making news -- that I still ain't sure I want to go bAAck. To quote the old line, if it ain't one damn thing, it's another :-(
You know, it's your time and money and if you dislike a company and it's product, yes chose a competitor. I commend you for despite having serious status, you have voted with your pocket book. Couldn't agree more. I strongly dislike AA and will never fly them again.
Does this mean that they'll start offering PDB service in first class regularly, something their competitors have done for decades?
Or will this service be offered based on mood, as it has been for the past many years?
Mood
This is huge given how long AA and its FAs have been fighting.
The real question is how much it will cost AA in extra costs and retro but it is certain to result in hundreds of millions of dollars in extra costs on top of potentially well over $500 million in retro.
And it should be noted that retro will likely result in higher taxation than if the pay had been received each...
This is huge given how long AA and its FAs have been fighting.
The real question is how much it will cost AA in extra costs and retro but it is certain to result in hundreds of millions of dollars in extra costs on top of potentially well over $500 million in retro.
And it should be noted that retro will likely result in higher taxation than if the pay had been received each year - on top of the lost interest that money could have made during some of the highest inflation rates the US has seen in decades.
Next up is United. They are certain to go for no less.
Also, on the business of the airlines, Delta updated its guidance today and said its earnings are still expected to be on target for the year. The financial hit from CrowdStrike is being made up for by stronger corporate revenues after the event and into the fall and lower fuel prices.
As I have previously noted, the financial impact to DL for CRWD will be smaller than it will cost AA and UA just to increase FA rates to DL and WN levels on top of the retro.
finally, DL said that even with the CRWD impact, it is still at the top of the industry in year to date on-time and cancellation rates.
FFS.
Everything you said wrong except that this is huge and that United will have to pay even more.
this part in itself is key
"this is huge and that United will have to pay even more."
the only salvation for AA and UA is that fuel prices are falling for every carrier that has reported guidance so what they have to pay in retro will be offset IN PART by fuel savings.
Their operating costs will still be higher.
And, if you get a one-time increase in income in one year...
this part in itself is key
"this is huge and that United will have to pay even more."
the only salvation for AA and UA is that fuel prices are falling for every carrier that has reported guidance so what they have to pay in retro will be offset IN PART by fuel savings.
Their operating costs will still be higher.
And, if you get a one-time increase in income in one year - which retro does - then you will be pushed into a higher tax bracket. It is possible to average your income over several years but it costs money just to go through all of the loopholes.
And interest rates have been much higher than average for a good chunk of the time this contract has been in negotiation.
FAs lost borrowing and interest earning potential that they will never recover compared to if they simply had the money in their pockets years ago.
You need a life and a course in google research
share with us the cost of retro to AA from their own statements, please.
Meanwhile in CLT, AA flight attendants are grieving when gate agents or cabin groomers place amenity kits and menus at Business Class seats. Because that's protected work and they'll continue to try and take flight delays while the purser does this work unassisted until they get their extra staffing back.
And?
Decades of bad morale will not get better with this pay rise alone.
As someone that flys AA 2-4 times a week and usually in premium cabins hopefully this results in more pre departure beverages and for some flight attendants more attention during flight. The flight attendant on my flight to Chicago from Miami yesterday no pdbs and after serving meals not spent most of the time behind the curtain.
Just have to wonder how a struggling airline in an environment where raising fares without squashing demand will pay for this.
@ George Romney — Shouldn’t the bigger question be how American’s board continues to let senior executives mismanage the company, all while rewarding them with among the biggest bonuses in the industry?
I don't discount that. But the industry as a whole has built up too much capacity and like before there may be a day of reckoning.
You would hope it means those things but I highly doubt it. AA FA's have the tools to do their job at a high level especially in premium cabins but choose to do the opposite.
I'm not sure why we keep showing pay scales and congratulating pay increases in the airline industry. Studies have shown that monetary pay increases have little to no impact on mid-long term happiness and financial well being. Which is a...
You would hope it means those things but I highly doubt it. AA FA's have the tools to do their job at a high level especially in premium cabins but choose to do the opposite.
I'm not sure why we keep showing pay scales and congratulating pay increases in the airline industry. Studies have shown that monetary pay increases have little to no impact on mid-long term happiness and financial well being. Which is a long way of saying AA flight attendants will continue to be surly, do the bare minimum and continue to place service and hospitality as an after thought.
Cheers to higher fares and mileage prices.
@ Alonzo — Do you mind linking to a study that shows that in a way that would be relevant to AA flight attendants? In many cities, junior FAs qualify for food stamps. I’ve seen studies showing that above a certain pay amount (like $75K) how much you make doesn’t impact happiness. That doesn’t apply here, though.
That $75k study had a statistical error. The actual threshold is $500k or higher.
I think you need to visit the SNAP website to learn a bit more about food stamp benefits thresholds. A 2 person household in NYC would have to make below 30k a year collectively to qualify. A Jr FA making $30/hr exceeds that number by a mile.
I've never seen a collective effort by FA's to point out that they have trouble paying their bills in major cities where their home bases are.
Happiness...
I think you need to visit the SNAP website to learn a bit more about food stamp benefits thresholds. A 2 person household in NYC would have to make below 30k a year collectively to qualify. A Jr FA making $30/hr exceeds that number by a mile.
I've never seen a collective effort by FA's to point out that they have trouble paying their bills in major cities where their home bases are.
Happiness below 75k/year does increase with pay increases but it soon decreases as the employee is awaiting their next increase because they have increased their expenses to match their pay.
https://www.wcnc.com/article/news/local/connect-the-dots/more-money-equals-happiness-temporary-research-reveals/275-c674b46d-1f9a-4a0d-a845-6e8bf757d464
And they still will. You can't live on $35K a year in any major US city.
It's funny that @Alonzo says "studies have shown" but cites no study whatsoever and only shares a link to a news website that also says "some studies have shown" without citing any actual studies EITHER. Attributing any random assertion to "financial experts" doesn't make it true, no matter how much the "WCNC study" wants people to believe it.
Oh man, you noticed. I'm so embarrassed. I guess I needed to put a study from an ivy league university for you to believe it.
Mood