Amer Air CEO Carty: St Louis Still Vital To Airline
ST. LOUIS (AP)--It was a little more than two years ago that American Airlines (AMR) rescued Trans World Airlines from almost certain demise. On Wednesday, American CEO Donald Carty said St. Louis and the former TWA workers are still vital to the world''s largest airline, even as American struggles for its own survival.
Carty spoke to several hundred St. Louis area business leaders a day after American officials said the company''s future was at stake unless employees agreed to steep cuts in wages, benefits and work rules aimed at saving $1.8 billion annually.
Asked Wednesday if American was at immediate risk of following United Airlines and US Airways into bankruptcy, Carty said only the concessions are something we believe has to happen.
If you were going to the bank every week to borrow money to buy groceries, at some point the bank is going to say no, Carty said.
Much has changed since January 2001, when American announced it would purchase most of the assets of St. Louis-based TWA - chiefly a significant downturn in the economy, made worse by the Sept. 11, 2001, terrorist attacks.
But a lot of things haven''t changed, Carty said. Twenty-five months ago we believed the integration of TWA and American -and in particular, the addition of the St. Louis hub to our network -was a watershed event for our company. And we still believe that.
That was good news to Leonard Griggs, director of St. Louis'' Lambert Airport.
The American acquisition of TWA is the most important single thing to revitalize the St. Louis economy and aviation in St. Louis, Griggs said. I think the marriage of American and St. Louis is stronger than ever and we''ll continue to grow together.
Still, the region has been hit hard by layoffs at American. The company announced in August up to 1,550 St. Louis-based workers - mostly former TWA employees - would be among 7,000 employees nationwide to lose their jobs as part of a massive restructuring.
Earlier this week, American announced 750 more St. Louis-based flight attendants could be furloughed in the next few months.
Former TWA workers went to the bottom of the seniority list as part of the merger, and each new round of cuts usually starts with workers based here.
Officials at Fort Worth, Texas-based American recognized the need to begin restructuring even before the economy went sour, Carty said. But the plight of the airline industry means the company can no longer inch forward on those changes, he said.
American is revising its business model to remove permanently $4 billion in annual costs. About half that goal has already been reached through job cuts as well as streamlining operations, increased use of automation, and even eliminating meals on many shorter flights.
Most of the other half needs to come from the additional employee concessions, Carty said.
Here in St. Louis, it''s particularly discouraging -not only because of the downsizing that''s already taken place here -but also because so many TWA employees, whose careers were in jeopardy for many years, and who understandably expected their integration into American to bring them career stability, have been severely impacted, Carty said.
The carrier''s executives and labor leaders are scheduled to meet again Friday. The $1.8 billion in cuts would come as follows: $660 million from pilots, $350 million from flight attendants, $620 million from mechanics and ground workers, $80 million from ticket agents and $100 million from management.
Dow Jones Newswires
02-05-031725ET
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ST. LOUIS (AP)--It was a little more than two years ago that American Airlines (AMR) rescued Trans World Airlines from almost certain demise. On Wednesday, American CEO Donald Carty said St. Louis and the former TWA workers are still vital to the world''s largest airline, even as American struggles for its own survival.
Carty spoke to several hundred St. Louis area business leaders a day after American officials said the company''s future was at stake unless employees agreed to steep cuts in wages, benefits and work rules aimed at saving $1.8 billion annually.
Asked Wednesday if American was at immediate risk of following United Airlines and US Airways into bankruptcy, Carty said only the concessions are something we believe has to happen.
If you were going to the bank every week to borrow money to buy groceries, at some point the bank is going to say no, Carty said.
Much has changed since January 2001, when American announced it would purchase most of the assets of St. Louis-based TWA - chiefly a significant downturn in the economy, made worse by the Sept. 11, 2001, terrorist attacks.
But a lot of things haven''t changed, Carty said. Twenty-five months ago we believed the integration of TWA and American -and in particular, the addition of the St. Louis hub to our network -was a watershed event for our company. And we still believe that.
That was good news to Leonard Griggs, director of St. Louis'' Lambert Airport.
The American acquisition of TWA is the most important single thing to revitalize the St. Louis economy and aviation in St. Louis, Griggs said. I think the marriage of American and St. Louis is stronger than ever and we''ll continue to grow together.
Still, the region has been hit hard by layoffs at American. The company announced in August up to 1,550 St. Louis-based workers - mostly former TWA employees - would be among 7,000 employees nationwide to lose their jobs as part of a massive restructuring.
Earlier this week, American announced 750 more St. Louis-based flight attendants could be furloughed in the next few months.
Former TWA workers went to the bottom of the seniority list as part of the merger, and each new round of cuts usually starts with workers based here.
Officials at Fort Worth, Texas-based American recognized the need to begin restructuring even before the economy went sour, Carty said. But the plight of the airline industry means the company can no longer inch forward on those changes, he said.
American is revising its business model to remove permanently $4 billion in annual costs. About half that goal has already been reached through job cuts as well as streamlining operations, increased use of automation, and even eliminating meals on many shorter flights.
Most of the other half needs to come from the additional employee concessions, Carty said.
Here in St. Louis, it''s particularly discouraging -not only because of the downsizing that''s already taken place here -but also because so many TWA employees, whose careers were in jeopardy for many years, and who understandably expected their integration into American to bring them career stability, have been severely impacted, Carty said.
The carrier''s executives and labor leaders are scheduled to meet again Friday. The $1.8 billion in cuts would come as follows: $660 million from pilots, $350 million from flight attendants, $620 million from mechanics and ground workers, $80 million from ticket agents and $100 million from management.
Dow Jones Newswires
02-05-031725ET
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