The Main Squawk: 30,000+ aerospace workers at Boeing walk off the job
Just a few weeks after Boeing’s new CEO Kelly Ortberg took the helm at the struggling aircraft manufacturer, he is already dealing with a pocket of severe turbulence. A tentative agreement between the International Association of Machinists and Aerospace Workers (IAM) and the Manufacturer failed on Friday when an overwhelming majority of the labor group voted to reject the deal.
Despite Union leadership recommending its 33,000 members vote in favor of the agreement, voters refused the 25% increase in pay—spread out over five years—and effectively declared it an insult. The Association said 94% of its members participated in the vote, 96% of which voted against the deal.
The IAM has been without a contract at Boeing since 2008 when the Company agreed to pay increases and work rule improvements due to a previous strike.
According to The Wall Street Journal, the starting wage in the rejected proposal was $21 per hour. Dick’s Drive-In, a popular fast-food joint in the Puget Sound region, pays Year 1 employees a comparable wage, provides free healthcare, and offers 401(k) matching. “You can make more money flipping burgers,” said a Boeing employee and IAM member who voted down the deal.
Southwest Chairman Gary Kelly announced his retirement ahead of the Company’s Investor Day, scheduled for September 26. The Airline’s leadership has been under scrutiny for failing to adapt to changing consumer desires, particularly by activist investor Elliott. The investment company holds a 10% ownership stake in the airline as of September 2.
Six members of the Company’s board of directors will retire in November, while Mr. Kelly will remain as Chairman until the Dallas-based LCC’s annual meeting in Spring 2025. The six members leaving the board have the potential to be replaced with up to three candidates proposed in Elliott’s “Stronger Southwest” improvement plan.
Mr. Kelly, who has served Southwest in various leadership capacities for the better part of four decades, threw his support behind current CEO Bob Jordan. Elliott is opposed to Mr. Jordan’s tenure at the Airline, a sentiment that isn’t difficult to appreciate after hearing that only recently did he discover that airplanes don’t have a bedtime.
The Chairman’s departure from the Board is rumored to open a pathway for the Airline to offer a Basic Economy product and introduce checked bag fees.
Air Canada pilots reached an agreement with the Toronto-based flag carrier over the weekend. The agreement is reported to span four years and will put talks of a strike on hold. The pilots, represented by ALPA, were without a contract for over 300 days.
While details of the agreement remain confidential, some items have emerged from company spokespersons, including an estimated $1.4 billion in contract value for the pilots. If ratified, this will result in a raise of over 45% compared to the pilot group’s previous contract.
Ratification is scheduled to take place next month.
United will provide free on-board Wi-Fi to its customers starting mid-2025. The connectivity will be powered by Starlink and will allow for a seamless, gate-to-gate experience throughout the Airline’s fleet.
The agreement with SpaceX—the product’s manufacturer—includes over 1,000 aircraft and will be phased into production throughout the decade.
SpaceX, pioneered by entrepreneur Elon Musk, has been critical of United and its CEO in the past. In particular, Mr. Musk has attacked the airline’s diversity, equity, and inclusion programs, claiming that “it will take an airplane crashing and killing hundreds of people for them to change this crazy policy of DIE [sic].” He added that he thinks of its CEO as the Nintendo character “Kirby.”
Testing will begin in early 2025, with “go-live” dates on the first batch of retrofitted aircraft by the end of next year.
American flight attendants ratified a tentative agreement that includes backpay for nearly 28,000 cabin crew. Nearly 95% of the Association of Professional Flight Attendants voted, 87% of which voted to accept the proposal. The agreement will last five years, include pay increases of up to 36%, and carry an overall value of $4.2 billion.
In addition, American flight attendants will now receive boarding pay which increases by roughly 45% through 2028. Delta flight attendants will no longer be the only cabin crew in the sky receiving pay for smiling at passengers as they greet them at the door.
Aeromexico is expanding its U.S. operation with flights from Guadalajara and Monterrey to Denver, Las Vegas, Orlando, Miami, and New York-JFK.
Air Canada is launching service from Toronto to Jacksonville and Montreal to Cincinnati in May 2025.
Air France is removing Accra, Tokyo-NRT, and Abu Dhabi from its winter schedule.
Air Greenland will reinstate one of the coolest flights in the industry in 2025.
Air Sénégal announced a debt settlement with Carlyle Aviation.
American is cutting all domestic, non-hub flying from Austin.
Brussels Airlines is expanding the size of its Airbus A330 fleet.
Delta is expected to operate a fleet of Airbus A321neo aircraft for the NBA.
Gulf Air may resume service to the U.S. as early as next year, or it might not.
Iberia is moving up the launch schedule for its Airbus A321XLR fleet.
Iran Air is facing sanctions by France, Germany, and the U.K. as its home nation continues to supply Russia with ballistic missiles for the war in Ukraine.
LATAM is upgrading its Business Class cabins on its Boeing 787 aircraft, complete with sliding doors.
Southwest pilots will be sent for additional training as early as November following a string of incidents.
United CEO Scott Kirby revealed that 3+ million people took advantage of reward travel with the airline this summer, or “about 1% of the entire U.S. population.”
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