US airlines hold tense contract talks: straining labour relations as pilots demand market pay rates

Just as the magnet of airline profitability is attracting investors, the same magnetic fields are proving to be irresistible forces for labour. As a consequence, some major US airlines remain bogged down in contentious labour negotiations that have resulted in a swarm of negative publicity for those companies. The management teams of airlines such as Southwest Airlines and Delta are attempting to navigate the conclusion of labour deals that offer fair compensation and benefits to employees, while at the same time making declarations to shareholders and investors about a transformed industry delivering consistent and record profits.

The continuing labour turbulence for Delta, Southwest and Hawaiian reflects the impatience of employees, anxious not to be left behind as airline profits grow. Those airlines face the challenge of negotiating contracts that reward labour for its contribution to stable profitability, while also ensuring that the productivity in those agreements creates a minimum level of cost inflation.

Stakes are high for both management and labour in the current round of contract negotiations, which means that collective bargaining could drag on for many months. As airline executives continue to reiterate their desire to reach new contracts, labour's rhetoric for market rate pay is growing stronger.

(Note: this report was compiled prior Southwest Airlines reaching a tentative agreement with management on 29-Aug-2016)