Unions await AMR''s plans
By Trebor Banstetter
Star-Telegram Staff Writer
FORT WORTH - Union leaders representing American Airlines employees expect executives with the struggling carrier to present a long-awaited, comprehensive package of concession requests Tuesday.
American has scheduled a meeting at 8:30 a.m. that day with labor leaders, officials with the Allied Pilots Association, the Transport Workers Union and the Air Line Pilots Association said Friday. Based on recent meetings with management, labor officials said the session will probably focus on specific employee concessions.
They''ve wrapped up the informational phase, and it''s clear they''re ready to cut to the chase and get down to the specifics, said Gregg Overman of the Allied Pilots Association, which represents 13,500 American Airlines pilots.
Jim Little, international vice president of the Transport Workers Union, which represents 37,000 mechanics and ground workers at American, agreed.
Finally, we''re going to have a discussion about concessions, he said. That''s certainly the direction they''ve been heading, and it''s about time.
American Chief Executive Don Carty is expected to speak with American''s unions, while Peter Bowler, president of American Eagle, will meet with unions representing those employees, said James Magee of the Air Line Pilots Association, which represents 2,600 American Eagle pilots.
American officials confirmed that the meeting is scheduled but declined to detail what''s on the agenda.
We''re continuing our process of active engagement with the unions, and this is part of that process, said Bruce Hicks, an American spokesman.
It was unclear Friday what the proposed concessions might entail, but they are likely to include changes in work rules as well as wage and benefit reductions for some employees.
Fitch Ratings, a financial service that provides ratings on corporate debt, said in a recent report that American''s labor costs must be reduced 20 percent to 25 percent for the company to compete.
Carty has said on numerous occasions that the airline must cut labor costs substantially before American can return to profitability. Last year, he said the airline must cut $4 billion in annual expenses to survive.
So far, the airline says it has identified about $2 billion in operational cuts. Most of the remaining $2 billion will have to come from employees, the airline has said.
On Jan. 9, Carty told the Senate Commerce, Science and Transportation Committee that concession talks with unions would be well under way within 30 to 60 days.
And he warned employees in a recent recorded message that the solution to American''s woes inevitably will include the restructuring of our labor agreements.
Any concessions must be approved by the unions that represent employees at American and American Eagle. It is likely that the labor groups will carefully analyze any proposal before putting it to members for a vote.
Unions representing flight attendants, ground workers and mechanics have contracts in place that won''t expire until 2004. Only the American Airlines pilots are currently negotiating for a new contract.
Any concessions could have a major effect in North Texas. American is the area''s largest employer, with 28,000 workers.
Pilots said they hope executives present a complete business plan instead of a simple list of concessions.
As far as I''m concerned, any request for concessions is dead on arrival without a real business plan that points to a real recovery, said Sam Mayer, a 14-year American pilot who is chairman of the APA''s New York domicile. If all we''re going to do is postpone Chapter 11 from March to June, there won''t be much interest [in cooperating].
American, like other major airlines, is struggling to overcome the worst financial crisis in the industry''s history. Last year, the carrier lost $3.5 billion, and it''s expected to lose more than $800 million during the first three months of 2003.
Airline executives and many airline analysts say that American, which has among the highest labor costs in the industry, could be forced into bankruptcy if it can''t bring its costs down.
American has been under intense pressure in recent weeks to start moving on its vow to slash labor expenses. Many Wall Street analysts have chastised executives for failing to request specific contract changes.
We are quite disappointed that [American] management continues to approach the key issue of eventual labor-related cost savings very gingerly, to say the least, Reno Bianchi, an airline analyst in the corporate bond department of Salomon Smith Barney, said in a recent report. [American] runs the risk of running out of time.
On Tuesday evening, Carty is scheduled to be the keynote speaker during a dinner at the annual transportation conference in New York hosted by the Wall Street firm Goldman, Sachs & Co. The speech is expected to be well-attended by airline industry analysts.
Employees at rivals United Airlines and US Airways, both in bankruptcy, are negotiating major cuts in wages and benefits. United pilots, for example, have agreed to 29 percent wage cuts and flight attendants to 9 percent cuts. Ground workers are likely to have a 14 percent cut imposed by the bankruptcy court.
American has already presented two of its three major unions with a small concession request. In late December, Carty asked flight attendants, mechanics and ground workers to forgo 3 percent raises scheduled for 2003. Pilots, who are negotiating a new contract, have no raise scheduled this year.
The flight attendants and ground workers unions are considering the proposal and plan to decide soon whether to have members vote on it.
By Trebor Banstetter
Star-Telegram Staff Writer
FORT WORTH - Union leaders representing American Airlines employees expect executives with the struggling carrier to present a long-awaited, comprehensive package of concession requests Tuesday.
American has scheduled a meeting at 8:30 a.m. that day with labor leaders, officials with the Allied Pilots Association, the Transport Workers Union and the Air Line Pilots Association said Friday. Based on recent meetings with management, labor officials said the session will probably focus on specific employee concessions.
They''ve wrapped up the informational phase, and it''s clear they''re ready to cut to the chase and get down to the specifics, said Gregg Overman of the Allied Pilots Association, which represents 13,500 American Airlines pilots.
Jim Little, international vice president of the Transport Workers Union, which represents 37,000 mechanics and ground workers at American, agreed.
Finally, we''re going to have a discussion about concessions, he said. That''s certainly the direction they''ve been heading, and it''s about time.
American Chief Executive Don Carty is expected to speak with American''s unions, while Peter Bowler, president of American Eagle, will meet with unions representing those employees, said James Magee of the Air Line Pilots Association, which represents 2,600 American Eagle pilots.
American officials confirmed that the meeting is scheduled but declined to detail what''s on the agenda.
We''re continuing our process of active engagement with the unions, and this is part of that process, said Bruce Hicks, an American spokesman.
It was unclear Friday what the proposed concessions might entail, but they are likely to include changes in work rules as well as wage and benefit reductions for some employees.
Fitch Ratings, a financial service that provides ratings on corporate debt, said in a recent report that American''s labor costs must be reduced 20 percent to 25 percent for the company to compete.
Carty has said on numerous occasions that the airline must cut labor costs substantially before American can return to profitability. Last year, he said the airline must cut $4 billion in annual expenses to survive.
So far, the airline says it has identified about $2 billion in operational cuts. Most of the remaining $2 billion will have to come from employees, the airline has said.
On Jan. 9, Carty told the Senate Commerce, Science and Transportation Committee that concession talks with unions would be well under way within 30 to 60 days.
And he warned employees in a recent recorded message that the solution to American''s woes inevitably will include the restructuring of our labor agreements.
Any concessions must be approved by the unions that represent employees at American and American Eagle. It is likely that the labor groups will carefully analyze any proposal before putting it to members for a vote.
Unions representing flight attendants, ground workers and mechanics have contracts in place that won''t expire until 2004. Only the American Airlines pilots are currently negotiating for a new contract.
Any concessions could have a major effect in North Texas. American is the area''s largest employer, with 28,000 workers.
Pilots said they hope executives present a complete business plan instead of a simple list of concessions.
As far as I''m concerned, any request for concessions is dead on arrival without a real business plan that points to a real recovery, said Sam Mayer, a 14-year American pilot who is chairman of the APA''s New York domicile. If all we''re going to do is postpone Chapter 11 from March to June, there won''t be much interest [in cooperating].
American, like other major airlines, is struggling to overcome the worst financial crisis in the industry''s history. Last year, the carrier lost $3.5 billion, and it''s expected to lose more than $800 million during the first three months of 2003.
Airline executives and many airline analysts say that American, which has among the highest labor costs in the industry, could be forced into bankruptcy if it can''t bring its costs down.
American has been under intense pressure in recent weeks to start moving on its vow to slash labor expenses. Many Wall Street analysts have chastised executives for failing to request specific contract changes.
We are quite disappointed that [American] management continues to approach the key issue of eventual labor-related cost savings very gingerly, to say the least, Reno Bianchi, an airline analyst in the corporate bond department of Salomon Smith Barney, said in a recent report. [American] runs the risk of running out of time.
On Tuesday evening, Carty is scheduled to be the keynote speaker during a dinner at the annual transportation conference in New York hosted by the Wall Street firm Goldman, Sachs & Co. The speech is expected to be well-attended by airline industry analysts.
Employees at rivals United Airlines and US Airways, both in bankruptcy, are negotiating major cuts in wages and benefits. United pilots, for example, have agreed to 29 percent wage cuts and flight attendants to 9 percent cuts. Ground workers are likely to have a 14 percent cut imposed by the bankruptcy court.
American has already presented two of its three major unions with a small concession request. In late December, Carty asked flight attendants, mechanics and ground workers to forgo 3 percent raises scheduled for 2003. Pilots, who are negotiating a new contract, have no raise scheduled this year.
The flight attendants and ground workers unions are considering the proposal and plan to decide soon whether to have members vote on it.
34 PM flyhigh wrote: 
