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American and Southwest Airlines face looming strikes

American Airlines flight attendants have been negotiating for a new contract with their airline for nearly five years. Currently, the two sides are in federally mandated mediation run by the National Mediation Board.

Airline workers, due to the Railway Act, can't simply strike because they have not made a deal. They must follow a prescribed set of steps which includes mediation.

If that mediation reaches an impasse, however, the workers, through their union, can request to be released from those negotiations. If that request gets approved, the union would still have to wait out a 30-day cooling-off period before a strike could happen.

It appears that negotiations between American Airlines (AAL) - Get Free Report and its flight attendants union, the Association of Professional Flight Attendants (AFPA) have reached that critical stage.

"As we indicated in our previous hotline, we have set this week as a deadline for the company to make significant movement toward reaching an agreement. This afternoon, your APFA Negotiating Committee met with your Board of Directors to brief them on the status of negotiations, including the next step: a request to the National Mediation Board to release us into a thirty-day cooling-off period," the union shared on its website.

The union also shared that it would tell members on Nov. 20 whether the AFPA Board of Directors will request to be released from federal mediation.

What happens next for American Airlines?

If the APFA requests a release from mediation, the National Mediation Board (NMB) could deny its request. That's what it did when Southwest Airlines (LUV) - Get Free Report pilots requested to be released. Should that happen, the two sides would be expected to continue negotiating.

If a release is granted, the union would theoretically be in a position to strike during the key holiday season. The NMB also could take its time in making a decision and grant the release, but doing so a few days into December to push any possible strike until after the Christmas and New Year's travel seasons.

A strike could happen 30 days after the APFA gets released from mediation, but even if that happens, View From the Wing's Gary Leff does not expect a full-on work stoppage.

"Since flight attendants aren’t financially in a position to strike for an extended period, and the union isn’t in a financial position to provide significant strike pay to workers, they’ll just walk off of a limited number of flights on specific days – to limit the hardship of workers who don’t collect pay when they do not work, while communicating that any given American Airlines flight might not operate (which is always true, given whether and mechanical vagaries)," he shared.

The airline has maintained public confidence that a deal will be done.

“We continue to meet regularly with the APFA and remain focused on the goal of reaching a deal our flight attendants have earned,” the airline shared in an email to TheStreet.

Will Southwest Airlines pilots strike?

Southwest's pilots have voted overwhelmingly in favor of a strike and have already asked to be released by the NMB. They could make that request again, theoretically allowing for a holiday season strike.

The Southwest Airlines Pilots Association (SWAPA) took a step toward a strike by opening its first Regional Strike Center in Dallas in November.

"While none of us wants to go on strike, we are preparing for that path because Southwest simply has not shown that it is willing to invest the time, energy, and money into creating a better experience for us nor our customers,” said SWAPA President Captain Casey Murray.

“As our negotiations linger and the holiday travel season approaches, we have to be prepared for a strike and that’s exactly what we are doing with the opening of these centers.”

The airline has taken a similar tone to American when it comes to questions about a potential strike.

Southwest Airlines Executive Vice President Bob Jordan spoke about the potential pilots strike during the airline's second-quarter earnings call.

"You've heard about the strike authorization vote. Obviously, that is an NMB-defined process, mediation is a defined process. So, it's, I'd say there is no strike or an imminent strike. There are a lot of steps that would lead up to that," he said during the late-July call.

In addition to needing to be released from mediation, the unions would also risk President Joe Biden stepping in to stop the strikes including ordering a longer cooling-off period.

Investors are skeptical strikes will occur. Shares of both American and Southwest were up this past week.

This article originally appeared in The Street.s

Photo: Shutterstock

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