<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=192888919167017&amp;ev=PageView&amp;noscript=1">
Thursday, September 21, 2023
Sept. 21, 2023

Linkedin Pinterest

Labor tensions at Texas airlines could make for a strained summer of travel


It’s gearing up to be a record year of demand for summer travel.

But if you’re flying on one of Dallas-Fort Worth’s two headquartered carriers, there’s a lot to know about what’s happening with the airline’s crew. Both carriers are under tense labor negotiations this summer with crew members vital to getting passengers from A to Z.

At Southwest Airlines, pilots voted to authorize a strike after just a week and a half of voting. The union is the sole bargaining unit for over 9,000 pilots at Southwest, and pilots have been in labor negotiations for over three years.

The Southwest Airlines Pilots Association is in mediation with the company, as is Transport Workers Union Local 556, which represents the over 18,000 flight attendants at Southwest. Also bargaining for a contract are ramp, operations, provisioning and cargo agents represented by Transport Workers Union Local 555.

Both the pilot and flight attendants union have called on Southwest to make a compelling deal for union workers, many eying the contract Delta Air Lines ratified for its pilots earlier this year.

American Airlines pilots have a new agreement on the bargaining table that proposes a 21% pay raise for 2023. Also bargaining are the carrier’s flight attendants, represented by the 25,000-member Association of Professional Flight Attendants. In April, flight attendants picketed outside DFW Airport for raises, which they’ve been without for four years. Between May 25 and August 14, American expects more than 52 million customers.

Mike Taylor, practice lead for travel intelligence at J.D. Power., said it’ll be more difficult for passengers this year than any time he can think of in recent memory, although it is rare for a strike to happen.

He said if a carrier were to go on strike, it would be more challenging to find available seats because there’s a very high load factor over the summer.

“There will be more difficulty this year than in normal years simply because they are flying fewer aircraft and aircraft are more full,” Taylor said.

Airline strikes have happened in the past during summer travel. In July 1966, The International Association of Machinists went on a strike against five airlines, grounding 60% of the country’s air traffic, according to the Los Angeles Times.

It’s a strong bargaining position for pilots, especially before the summer season, he said.

So what does this all mean?

New contracts with higher salaries could significantly impact consumers and their summer travel plans. The two biggest costs for a carrier are fuel and wages.

One way to stay profitable is to heighten airfare to absorb the impact of the increases across the industry, said George Ferguson, senior aerospace, defense and airline analyst at Bloomberg Intelligence.

“There’s wage increases everywhere across the airlines right now, but the pilots are definitely getting the most,” Ferguson said.

According to Deloitte, the biggest reason why people won’t travel this year are that they can’t afford it, followed by its too expensive right now. But for people that are going to get out, travelers are planning to spend close to $3,000 on their longest trip in the summer.

Christopher Raite, sector analyst of industrials and materials at Third Bridge Group Limited, said the wage increases could also be a positive sign for consumers. He said there’s no real direct “rule of thumb” of how quickly this could impact consumers, but the ability to get new aircraft in the fleet would help.

“We’ve seen increasing fares, but I would say those fares are more a function of the planes than the pilots,” Raite said.

High prices are being masked by demand, Taylor said.

“You have to have demand in order to have higher prices to have inflation,” Taylor said. “But eventually, I believe that there’s going to come a point when the price becomes too high, and then it really chokes off the demand.”