Fenwicksgirl
26th Oct 2007, 01:40
Got this from the Rumours thread this morning......CX are you reading!!!
Show me the money! AA pilots opener ;-)
American pilots ask for pay increase of 53 percent
Fort Worth Star-Telegam, October 24, 2007
American Airlines' pilots have asked for a hefty boost in pay and benefits, a proposal that analysts said would likely lead to long and arduous contract negotiations at the world's largest airline.
The proposal, presented to the airline Tuesday, requests a one-time raise that would restore pilot salaries to 1992 levels, when adjusted for inflation. If approved by May 2008, that would mean a raise of about 53 percent.
The union also asked for future annual raises of 6 percent and annual cost-of-living increases, and a signing bonus that totals 15 percent of a pilot's earnings between July 21, 2006, when talks began, and the effective date of the new contract.
Labor leaders said the proposal restores purchasing power that pilots have lost since 1992 to pay cuts and inflation. They point out that American's executives have enjoyed a substantial increase in pay in recent years while pilot earnings have fallen.
"Inflation has killed our purchasing power," said Karl Schricker, an American pilot and spokesman for the Allied Pilots Association, which represents the 12,000 pilots at the Fort Worth-based airline. "Senior management, meanwhile, has seen theirs go up over 500 percent."
Airline officials said they were reviewing the proposal. But they stressed that any significant increase in pay would likely hurt the company's competitive position.
"At first glance, it appears the items they've proposed would dramatically increase our pilot costs, which would make us even less competitive," spokeswoman Tami McLallen said. "And some of the things they've asked for are unprecedented."
The contract talks are being closely watched by the industry. American is the first major hub carrier to negotiate a new deal with pilots since the wave of bankruptcies and restructuring after 9-11 that dramatically cut employee wages and benefits. Already struggling with the rapid rise in fuel prices, airlines are worried that steeper labor costs will jeopardize the industry's turnaround.
In 2003, when American was on the brink of bankruptcy, pilots approved concessions that slashed average pay by 23 percent, saving the airline about $660 million annually and allowing it to avoid a Chapter 11 filing. Since then, American has returned to profitability, with six straight profitable quarters.
So far this year, American has earned $573 million in profit. Union leaders argue that the financial turnaround means that it's time for the airline to restore pilots' pay. And they say that their proposal would not significantly boost the airline's costs.
According to the union, the deal would increase the total cost of transporting one seat one mile by about a half-cent. That would be about a 4 percent increase, and would still give the airline lower costs than Continental Airlines, Delta Air Lines and US Airways.
"American has been able to absorb the cost of fuel and still earn millions in profits," Schricker said. "They could certainly absorb this modest increase."
McLallen said it was too early for the airline to provide a detailed analysis of the proposal's impact on costs.
One analyst was skeptical. William Swelbar, a researcher for the International Center for Air Transport at the Massachusetts Institute of Technology, said it would be "pretty hard for [American] to get their arms around this."
He said the proposed 6 percent raises, plus cost-of-living adjustments, are "unheard of" in the industry today.
"It's been an awful long time since we've seen raises like this for anyone," said Swelbar, who has worked in the airline industry for nearly 30 years, both for unions and management.
He predicted that the proposal signaled that pilots are ready to endure long and difficult bargaining over the new contract.
"It's seems to me that this is inviting a very long and arduous negotiation," he said. "And that might be their strategy."
Labor leaders, however, said the proposal is reasonable and are hopeful that talks will be swift.
"We understand the need to be competitive," Schricker said. "This allows us to keep a cost advantage, and we don't see why we can't move quickly on it."
In May, the union submitted a pay proposal that included a 30 percent raise as well as signing bonuses -- a plan that was rejected by the airline. Two months later, union members elected new leaders who promised to take a more aggressive negotiating stance. Talks, which had formally begun more than a year ago, essentially restarted with new pilot negotiators.
Schricker said the new pay plan reflects the desires of pilots, which were documented in a survey this summer.
"They just want to get back what they've lost," he said.
The proposal would also:
Give pilots holiday pay for work on 10 scheduled holidays, including Christmas, Labor Day and Super Bowl Sunday. The current contract doesn't provide holiday pay.
Increase vacation time and change sick time to "personal time" that can be used for any reason, including illness.
Implement an unspecified annual bonus plan for pilots based on the company's performance.
Eliminate a one-year probation period for new hires.
The deal, which would last until Jan. 4, 2011, would also greatly quicken the pace of negotiations for the next contract. It specifies that talks would begin 180 days before the contract opened for changes and that mediation could begin 120 prior to that days if the two sides couldn't reach an agreement.
It would allow the union to strike if a deal isn't reached by the contract's amendable date.
Currently, talks at American and other airlines are conducted under federal laws that allow for significant mediation and "cooling-off" time before unions can strike. That time often extends years beyond the contract's final date.
The pilots' proposal also asks the airline to pay all of the union's direct negotiating costs. Currently those expenses are shouldered by the union.
The pilot plan did not address scheduling or productivity. Airline executives have insisted that productivity gains must accompany any pay increases. Labor leaders said those issues will be addressed in future proposals.
The pilots are just one of three major contracts that American will be negotiating over the next few years. Next month, the airline will begin talks with the union that represents mechanics and other ground workers. And flight attendants will begin their negotiations in March.
Shares of AMR Corp., American's parent (ticker: AMR), closed at $24.65, up $1.34, in trading Tuesday.
Show me the money! AA pilots opener ;-)
American pilots ask for pay increase of 53 percent
Fort Worth Star-Telegam, October 24, 2007
American Airlines' pilots have asked for a hefty boost in pay and benefits, a proposal that analysts said would likely lead to long and arduous contract negotiations at the world's largest airline.
The proposal, presented to the airline Tuesday, requests a one-time raise that would restore pilot salaries to 1992 levels, when adjusted for inflation. If approved by May 2008, that would mean a raise of about 53 percent.
The union also asked for future annual raises of 6 percent and annual cost-of-living increases, and a signing bonus that totals 15 percent of a pilot's earnings between July 21, 2006, when talks began, and the effective date of the new contract.
Labor leaders said the proposal restores purchasing power that pilots have lost since 1992 to pay cuts and inflation. They point out that American's executives have enjoyed a substantial increase in pay in recent years while pilot earnings have fallen.
"Inflation has killed our purchasing power," said Karl Schricker, an American pilot and spokesman for the Allied Pilots Association, which represents the 12,000 pilots at the Fort Worth-based airline. "Senior management, meanwhile, has seen theirs go up over 500 percent."
Airline officials said they were reviewing the proposal. But they stressed that any significant increase in pay would likely hurt the company's competitive position.
"At first glance, it appears the items they've proposed would dramatically increase our pilot costs, which would make us even less competitive," spokeswoman Tami McLallen said. "And some of the things they've asked for are unprecedented."
The contract talks are being closely watched by the industry. American is the first major hub carrier to negotiate a new deal with pilots since the wave of bankruptcies and restructuring after 9-11 that dramatically cut employee wages and benefits. Already struggling with the rapid rise in fuel prices, airlines are worried that steeper labor costs will jeopardize the industry's turnaround.
In 2003, when American was on the brink of bankruptcy, pilots approved concessions that slashed average pay by 23 percent, saving the airline about $660 million annually and allowing it to avoid a Chapter 11 filing. Since then, American has returned to profitability, with six straight profitable quarters.
So far this year, American has earned $573 million in profit. Union leaders argue that the financial turnaround means that it's time for the airline to restore pilots' pay. And they say that their proposal would not significantly boost the airline's costs.
According to the union, the deal would increase the total cost of transporting one seat one mile by about a half-cent. That would be about a 4 percent increase, and would still give the airline lower costs than Continental Airlines, Delta Air Lines and US Airways.
"American has been able to absorb the cost of fuel and still earn millions in profits," Schricker said. "They could certainly absorb this modest increase."
McLallen said it was too early for the airline to provide a detailed analysis of the proposal's impact on costs.
One analyst was skeptical. William Swelbar, a researcher for the International Center for Air Transport at the Massachusetts Institute of Technology, said it would be "pretty hard for [American] to get their arms around this."
He said the proposed 6 percent raises, plus cost-of-living adjustments, are "unheard of" in the industry today.
"It's been an awful long time since we've seen raises like this for anyone," said Swelbar, who has worked in the airline industry for nearly 30 years, both for unions and management.
He predicted that the proposal signaled that pilots are ready to endure long and difficult bargaining over the new contract.
"It's seems to me that this is inviting a very long and arduous negotiation," he said. "And that might be their strategy."
Labor leaders, however, said the proposal is reasonable and are hopeful that talks will be swift.
"We understand the need to be competitive," Schricker said. "This allows us to keep a cost advantage, and we don't see why we can't move quickly on it."
In May, the union submitted a pay proposal that included a 30 percent raise as well as signing bonuses -- a plan that was rejected by the airline. Two months later, union members elected new leaders who promised to take a more aggressive negotiating stance. Talks, which had formally begun more than a year ago, essentially restarted with new pilot negotiators.
Schricker said the new pay plan reflects the desires of pilots, which were documented in a survey this summer.
"They just want to get back what they've lost," he said.
The proposal would also:
Give pilots holiday pay for work on 10 scheduled holidays, including Christmas, Labor Day and Super Bowl Sunday. The current contract doesn't provide holiday pay.
Increase vacation time and change sick time to "personal time" that can be used for any reason, including illness.
Implement an unspecified annual bonus plan for pilots based on the company's performance.
Eliminate a one-year probation period for new hires.
The deal, which would last until Jan. 4, 2011, would also greatly quicken the pace of negotiations for the next contract. It specifies that talks would begin 180 days before the contract opened for changes and that mediation could begin 120 prior to that days if the two sides couldn't reach an agreement.
It would allow the union to strike if a deal isn't reached by the contract's amendable date.
Currently, talks at American and other airlines are conducted under federal laws that allow for significant mediation and "cooling-off" time before unions can strike. That time often extends years beyond the contract's final date.
The pilots' proposal also asks the airline to pay all of the union's direct negotiating costs. Currently those expenses are shouldered by the union.
The pilot plan did not address scheduling or productivity. Airline executives have insisted that productivity gains must accompany any pay increases. Labor leaders said those issues will be addressed in future proposals.
The pilots are just one of three major contracts that American will be negotiating over the next few years. Next month, the airline will begin talks with the union that represents mechanics and other ground workers. And flight attendants will begin their negotiations in March.
Shares of AMR Corp., American's parent (ticker: AMR), closed at $24.65, up $1.34, in trading Tuesday.