American Airlines Nears Bankruptcy (merged)
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411A, I have to disagree with you on this. Having flown all the majors over the years, I have found the flight crews, both cabin and cockpit to be friendly and professional. I have not flown as much recently as in the past, so maybe some attitudes have changed. I would guess that ones own personal attitude would have alot to do with what they perceive however.
As far as the employee causing a company to go into BK, I would disagree. Management has to be held to account for that. Just my opinion.
As far as the employee causing a company to go into BK, I would disagree. Management has to be held to account for that. Just my opinion.
B767300ER,
With all due respect for your situation, you are omitting a major fact.
With your claimed seniority of 7 years at TWA, it puts you amongst a group that went to work a carrier that had been in the dregs for years. This may not apply to you, but many TWA guys I ran into and knew were playing the seniority/buyout game. They knew TWA had many guys facing retirement and were banking on making Captain in 5 years. In fact, with the AA deal, if everything didn't hit the fan post 9/11, the STL FO's would have been upgrading into their fenced STL narrow-body Ca jobs many years before their fellow native American FO's at other bases. Unfortunately the world took another turn.
With all due respect for your situation, you are omitting a major fact.
With your claimed seniority of 7 years at TWA, it puts you amongst a group that went to work a carrier that had been in the dregs for years. This may not apply to you, but many TWA guys I ran into and knew were playing the seniority/buyout game. They knew TWA had many guys facing retirement and were banking on making Captain in 5 years. In fact, with the AA deal, if everything didn't hit the fan post 9/11, the STL FO's would have been upgrading into their fenced STL narrow-body Ca jobs many years before their fellow native American FO's at other bases. Unfortunately the world took another turn.
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Actually, the upgrade was running 7-8 years. I had 7 years and was still about 450 numbers away (approximately 1.5 years) from Captain. Now, being furloughed, it is a far away pipe dream that will be realized by some pilot hired at AA 5 years after I was hired at TWA.
Since the AA buyout, everything that has occured to the former TWA employees has been BAD. Out of 21,500 TWA employees working when the merger was announced, less than 8000 are left, and that is dwindling. Very shortly, AA won't have any TWA workers left to buffer them from suffering the same effects that other workers at UA,US,NW,DL and others have suffered. Since AA is currently bleeding the most red ink and is presently the most inefficient and unproductive US airline, don't you think THEIR employees might suffer the same fate as other carrier's employees?
Since the AA buyout, everything that has occured to the former TWA employees has been BAD. Out of 21,500 TWA employees working when the merger was announced, less than 8000 are left, and that is dwindling. Very shortly, AA won't have any TWA workers left to buffer them from suffering the same effects that other workers at UA,US,NW,DL and others have suffered. Since AA is currently bleeding the most red ink and is presently the most inefficient and unproductive US airline, don't you think THEIR employees might suffer the same fate as other carrier's employees?
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I thought it was pretty obvious what has been going wrong with airlines in the US, but I might be wrong. I know that an airline that is not efficiently run will go down the gurgler first, but surely you can see that the real reason for all this woe is the drop in passenger loads? A small drop of around 2 percent would cause the accountants grief, and the huge reductions all the airlines are facing, of at least 20 percent (UA says their loads are down almost 40 percent, even though they have dropped 20 percent of their flights) must surely be the major reason for the bankruptcies.
Adding to that would be the fare cutting in a desperate attempt to get back market share, which would effectively make the revenue loss even higher, and it is a wonder that any airline survives.
And why the drop off in passengers? In my opinion it is due to the fear factor (Last year was the safest for airline passengers for many many years but that gets hardly any press. Rather, the govt and the media do their best to frighten people unnecessarily) and also to the insane and continuing TSA hassles at the airports. I don't know what to blame more, but I think the TSA feeds off the fear in order to grow itself, and they seem determined to destroy aviation in order to protect it.
A little common sense would help all the airlines, and all of us who want to make a living in aviation. Without it, we all will have to find another job.
Adding to that would be the fare cutting in a desperate attempt to get back market share, which would effectively make the revenue loss even higher, and it is a wonder that any airline survives.
And why the drop off in passengers? In my opinion it is due to the fear factor (Last year was the safest for airline passengers for many many years but that gets hardly any press. Rather, the govt and the media do their best to frighten people unnecessarily) and also to the insane and continuing TSA hassles at the airports. I don't know what to blame more, but I think the TSA feeds off the fear in order to grow itself, and they seem determined to destroy aviation in order to protect it.
A little common sense would help all the airlines, and all of us who want to make a living in aviation. Without it, we all will have to find another job.
B767300ER,
As an AA guy, I don't take any comfort in the fact the TWA guys are getting whacked first. We are way beyond losing some "excess weight", but are now losing vital organs. Right now we are like a 747-400 that has lost 3 engines at "gear up".
Again, my comments and your situation is based on what was set in stone by APA pre 9/11, and not afterwards for some "furlough fodder" agenda.
From my own situation, AA upgrades had virtually stopped by the summer of 2001. I was a bottom Captain with 11 years of seniority, and that only came with a junior Christmas day simcheck. If things had remained stagnant, MOST of the AA upgrades would have occurred in STL exclusively for TWA guys mainly due to almost 50% of the Captains retiring over a 3.5 year period. That "MOST LIKELY", (no guarantees), would have put 1996 TWA hires as 8 year STL Captains by mid 2004. At AA, Captain upgrades ,"MOST LIKELY", (no guarantees), probably would have hovered around the 10-12 year mark with TWA guys making it in 7-8. I doubt we would have heard much from your group if the WTC towers were still standing.
These numbers are still "ballpark" guesses. The point is that pre 9/11, your deal wasn't that bad for your seniority. consider also the lack of early 1990 TWA hiring. The last guy hired in 1990 might have made Captain during Xmas of 2001 at his 11year point, but if he passed along with 52 guys junior to him, then *Presto*!, a 1995 hire makes Captain in 6 years. The point is that this very possibly could have occurred for the TWA guys, it was very unlikely for the AA side.Seniority can have a funny effect on things sometimes.
I wish you the best.
As an AA guy, I don't take any comfort in the fact the TWA guys are getting whacked first. We are way beyond losing some "excess weight", but are now losing vital organs. Right now we are like a 747-400 that has lost 3 engines at "gear up".
Again, my comments and your situation is based on what was set in stone by APA pre 9/11, and not afterwards for some "furlough fodder" agenda.
From my own situation, AA upgrades had virtually stopped by the summer of 2001. I was a bottom Captain with 11 years of seniority, and that only came with a junior Christmas day simcheck. If things had remained stagnant, MOST of the AA upgrades would have occurred in STL exclusively for TWA guys mainly due to almost 50% of the Captains retiring over a 3.5 year period. That "MOST LIKELY", (no guarantees), would have put 1996 TWA hires as 8 year STL Captains by mid 2004. At AA, Captain upgrades ,"MOST LIKELY", (no guarantees), probably would have hovered around the 10-12 year mark with TWA guys making it in 7-8. I doubt we would have heard much from your group if the WTC towers were still standing.
These numbers are still "ballpark" guesses. The point is that pre 9/11, your deal wasn't that bad for your seniority. consider also the lack of early 1990 TWA hiring. The last guy hired in 1990 might have made Captain during Xmas of 2001 at his 11year point, but if he passed along with 52 guys junior to him, then *Presto*!, a 1995 hire makes Captain in 6 years. The point is that this very possibly could have occurred for the TWA guys, it was very unlikely for the AA side.Seniority can have a funny effect on things sometimes.
I wish you the best.
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Good posts...
Boofhead, you're absolutely right. The TSA will chase away more passengers in the US than terrorists will, and they really need to come to the UK/Europe and see how it's done RIGHT. Our government is too beaurocratic and won't listen to reason, only throw money at the problem.
Capt.Lizad, its a shame you lost your seat. I feel for you. My argument, and most of my LLC colleagues agree, is that TWA pilots/FAs/Agents have been the only ones suffering furloughs since 9-11, not AA's. Why should only ex-TWA employees take the ultimate loss for something that unfortunately happened at AA while we were bystanders? Seniority is a fleeting, strange thing, but it is the ONLY protection we'd have if something awful like 9-11 or recession hits. I understand your analogies about AA/LLC upgrades, with respect to STL-fence restrictions, but all that will be moot if AA goes ch.11 next week.
The final numbers, which could get very ugly, will most likely be 2-3000 pilot furloughs, and that will be a total of up to 4100 pilot lay-offs. Out of that, 1400 will be ex-TWA pilots (or 60% of our entire list/roster) and 2700 will be AA (or less than 24% of AA's list). The senior TWA pilot to be furloughed will be an '85 hire (a Captain), while the senior AA pilot to be furloughed will be a... '99 hire( a VERY junior F/O). That is what this horrible integration has done---destroyed careers of long-time, veteran jet pilots at a major airline in exchange for protecting new-hire, inexperienced and less-qualified AA pilots who were only recently hired.
That is our perspective, hope you understand its quite different from yours.
PS Is Rubin still sending you 10 HI6s per day?
Capt.Lizad, its a shame you lost your seat. I feel for you. My argument, and most of my LLC colleagues agree, is that TWA pilots/FAs/Agents have been the only ones suffering furloughs since 9-11, not AA's. Why should only ex-TWA employees take the ultimate loss for something that unfortunately happened at AA while we were bystanders? Seniority is a fleeting, strange thing, but it is the ONLY protection we'd have if something awful like 9-11 or recession hits. I understand your analogies about AA/LLC upgrades, with respect to STL-fence restrictions, but all that will be moot if AA goes ch.11 next week.
The final numbers, which could get very ugly, will most likely be 2-3000 pilot furloughs, and that will be a total of up to 4100 pilot lay-offs. Out of that, 1400 will be ex-TWA pilots (or 60% of our entire list/roster) and 2700 will be AA (or less than 24% of AA's list). The senior TWA pilot to be furloughed will be an '85 hire (a Captain), while the senior AA pilot to be furloughed will be a... '99 hire( a VERY junior F/O). That is what this horrible integration has done---destroyed careers of long-time, veteran jet pilots at a major airline in exchange for protecting new-hire, inexperienced and less-qualified AA pilots who were only recently hired.
That is our perspective, hope you understand its quite different from yours.
PS Is Rubin still sending you 10 HI6s per day?
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Oh dear....
I think Boofhead's reply is very much on the mark- the populace of the USA is confused and concerned since the turn of the century....it's going to take a long time for the national self-confidence to return, and in that time all of the US economy is going to suffer. An unfortunate side-effect is the dragging down of the world economy with it (Osama may well have hurt his own people as hard as the US....)
767...
Those who know me well would disagree will all of your assertions; I volunteer my time to run a large charity, I've flown for 2 other major carriers worldwide and the military; I'm used to not blaming anybody else for my situation. A long time ago, a senior Capt at one of those airlines said to me, "if you're not happy, don't upset those around you trying their hardest - go quietly somewhere else". I've followed those words ever since, and try never to let lose with rhetoric on the flt deck or in the bar. We make our own beds....and so it is, that even though I'm not likely to be furloughed at present, I'm thinking of moving on...
I've been disgusted at the public venting and vitriol of many of the pilots and management here in the US, and even more disgusted at the waffle and squabble on the flt decks - leading to complete un-professionalism that I have personally witnessed. All the while, the clock and cash flow were ticking... I have read many posts on this forum whereby people have vented off perceived past injustices instead of just getting on with it. Unfortunately the airline seniority system aggravates the perceptions - "...I can't afford to go anywhere else...I'm stuck with it, so I'll live in a world of bitterness...".
You seem very much to me to be one of those.... move on, and you'll never look back, moreover you'll feel that you're in control of your destiny, not a union or manager with a grudge. I feel that I very much hit a raw nerve with you - you still haven't answered my questions: did you have an app. in with other carriers? Why did you join TWA when they were bankrupt?
I think Boofhead's reply is very much on the mark- the populace of the USA is confused and concerned since the turn of the century....it's going to take a long time for the national self-confidence to return, and in that time all of the US economy is going to suffer. An unfortunate side-effect is the dragging down of the world economy with it (Osama may well have hurt his own people as hard as the US....)
767...
Those who know me well would disagree will all of your assertions; I volunteer my time to run a large charity, I've flown for 2 other major carriers worldwide and the military; I'm used to not blaming anybody else for my situation. A long time ago, a senior Capt at one of those airlines said to me, "if you're not happy, don't upset those around you trying their hardest - go quietly somewhere else". I've followed those words ever since, and try never to let lose with rhetoric on the flt deck or in the bar. We make our own beds....and so it is, that even though I'm not likely to be furloughed at present, I'm thinking of moving on...
I've been disgusted at the public venting and vitriol of many of the pilots and management here in the US, and even more disgusted at the waffle and squabble on the flt decks - leading to complete un-professionalism that I have personally witnessed. All the while, the clock and cash flow were ticking... I have read many posts on this forum whereby people have vented off perceived past injustices instead of just getting on with it. Unfortunately the airline seniority system aggravates the perceptions - "...I can't afford to go anywhere else...I'm stuck with it, so I'll live in a world of bitterness...".
You seem very much to me to be one of those.... move on, and you'll never look back, moreover you'll feel that you're in control of your destiny, not a union or manager with a grudge. I feel that I very much hit a raw nerve with you - you still haven't answered my questions: did you have an app. in with other carriers? Why did you join TWA when they were bankrupt?
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Raamjet, I NEVER applied with AA, if that answers your question. I never wanted to work for an airline that treats its employees so poorly, and had such awful labor-management relations. There were also other things I did'nt like about it.
What difference does it make why I applied with TWA? What if I had a relative who worked there and loved it? Truth is, DL and TW and US were on my list, as I'm from the south, and all 3 interviewed me. I did'nt want to go to US after being at TWA 2 years, which was probably a good move, and DL did'nt hire me. I was very happy to stay at TWA, but the pay would've obviously been less on average. However, working at a safe, reliable, on-time airline (with better benefits than AA) where everybody gets along and has fun can make you forget about higher pay. I was very happy flying 767-intn'l until AA bought us, and ever since, only bad things have happened, and I've been furloughed. Our employees have suffered for all of AA's problems, and it is'nt right. It also is'nt right for an AA new-hire pilot hired 3 months AFTER the TWA buyout to keep working, and for me to get furloughed with 7 years.
The chapter 11 filing we've been talking about could come soon, so get ready. Carty will take a hatchet to your contract, cut your pay by up to 30% and wipe out your benefits---including some retirement benefits possibly. All because the Al-Qaeda Pilots Association won't play ball and give concessions---which might save the airline from bankruptcy and CERTAINLY would save pilot jobs. TWU and APFA will give up, but APA won't; pretty ignorant and short-sighted of them, huh?
You think you've got a corner on the market with past jobs? I was miltary, corporate, flight instructed and flew for 6 airlines (including AA), and know all about low pay, furloughs, bankruptcies and other bumps in the road. I'm certain my total flight time and experience in large aircraft rivals (or betters) yours, so I'll say this: You're not better than me, even if you think so; you're just LUCKIER.
Cheers.
What difference does it make why I applied with TWA? What if I had a relative who worked there and loved it? Truth is, DL and TW and US were on my list, as I'm from the south, and all 3 interviewed me. I did'nt want to go to US after being at TWA 2 years, which was probably a good move, and DL did'nt hire me. I was very happy to stay at TWA, but the pay would've obviously been less on average. However, working at a safe, reliable, on-time airline (with better benefits than AA) where everybody gets along and has fun can make you forget about higher pay. I was very happy flying 767-intn'l until AA bought us, and ever since, only bad things have happened, and I've been furloughed. Our employees have suffered for all of AA's problems, and it is'nt right. It also is'nt right for an AA new-hire pilot hired 3 months AFTER the TWA buyout to keep working, and for me to get furloughed with 7 years.
The chapter 11 filing we've been talking about could come soon, so get ready. Carty will take a hatchet to your contract, cut your pay by up to 30% and wipe out your benefits---including some retirement benefits possibly. All because the Al-Qaeda Pilots Association won't play ball and give concessions---which might save the airline from bankruptcy and CERTAINLY would save pilot jobs. TWU and APFA will give up, but APA won't; pretty ignorant and short-sighted of them, huh?
You think you've got a corner on the market with past jobs? I was miltary, corporate, flight instructed and flew for 6 airlines (including AA), and know all about low pay, furloughs, bankruptcies and other bumps in the road. I'm certain my total flight time and experience in large aircraft rivals (or betters) yours, so I'll say this: You're not better than me, even if you think so; you're just LUCKIER.
Cheers.
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767
Your 2nd paragraph I agree with in its entirety, particularly the part about lower pay can make a happy airline seem fun....happiest bunch I ever flew for was a commuter in UK. Pay and conditions were non-existent. People just got on with it, and were rewarded with smiling faces getting off the a/c. Job well done.
Your 3rd para is actually a little off the mark; I think the APA will accede to cuts - the APFA may not, TWU's half-way there already.
Either way, a judge is going to be deciding things really soon, and that may be better-off for AA in the long-run, or it may not.
I am not claiming to have a corner on the hours market, not that total time is a reflection of anything at all (I could never understand the US carriers' obsession with flt hours and degrees in octopi-sciences, to the detriment of understanding passenger relations or even bothering to learn that ICAO even exists...), I was merely indicating that I am not one of the strait-out-the-military-where's-my-paycheck-I'm-owed-this backgrounds, and yes, I've met many in the APA. Nor do I claim to be astronaut material - where do you get that assumption from?
You started this blabber on page one by lumping all AA pilots into the same boat - do you happen to know all 13000 of them, perchance? Yes, I read your first post and took offence at someone criticizing me without ever having met me or understanding my opinions on a position taken by a Union; re-read what you wrote on page one. I think you'll find that most people would take offence at anon. attacks. I also do not gloat at anyone's misfortune, your's included. My point is to move on, and don't let this shambles burn you for your future flying career. Otherwise, you'll find it just rubs off in the pub on other people who've had equally unfortunate times and don't want to hear it. Critique all you will, but save the personal attacks on those you've never met or spoken to.
Cheers, as we say in Scotland...
Your 2nd paragraph I agree with in its entirety, particularly the part about lower pay can make a happy airline seem fun....happiest bunch I ever flew for was a commuter in UK. Pay and conditions were non-existent. People just got on with it, and were rewarded with smiling faces getting off the a/c. Job well done.
Your 3rd para is actually a little off the mark; I think the APA will accede to cuts - the APFA may not, TWU's half-way there already.
Either way, a judge is going to be deciding things really soon, and that may be better-off for AA in the long-run, or it may not.
I am not claiming to have a corner on the hours market, not that total time is a reflection of anything at all (I could never understand the US carriers' obsession with flt hours and degrees in octopi-sciences, to the detriment of understanding passenger relations or even bothering to learn that ICAO even exists...), I was merely indicating that I am not one of the strait-out-the-military-where's-my-paycheck-I'm-owed-this backgrounds, and yes, I've met many in the APA. Nor do I claim to be astronaut material - where do you get that assumption from?
You started this blabber on page one by lumping all AA pilots into the same boat - do you happen to know all 13000 of them, perchance? Yes, I read your first post and took offence at someone criticizing me without ever having met me or understanding my opinions on a position taken by a Union; re-read what you wrote on page one. I think you'll find that most people would take offence at anon. attacks. I also do not gloat at anyone's misfortune, your's included. My point is to move on, and don't let this shambles burn you for your future flying career. Otherwise, you'll find it just rubs off in the pub on other people who've had equally unfortunate times and don't want to hear it. Critique all you will, but save the personal attacks on those you've never met or spoken to.
Cheers, as we say in Scotland...
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RRAAMJET, It is a pleasure to read someone with their head screwed on right. Life is short, make the most of it. Life is not fair. Make the best of it you can. It seems you realized that long ago.
B767300ER, you keep saying how your 7 years of seniority in the airlines makes you more experienced or something to that affect. To any, is 7 years alot in the airlines or is it a little?
B767300ER, you keep saying how your 7 years of seniority in the airlines makes you more experienced or something to that affect. To any, is 7 years alot in the airlines or is it a little?
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how long will they last
i have a ticket on American from LHR to STL and back-April 5th to the 14th.
i hope they keep going across the water until i can get back here.
i've been through four airlines and though i never made near what American pilots do or did, i cannot hold it against them. we never get what we are worth, we only get what we can negotiate.
i hope they keep going across the water until i can get back here.
i've been through four airlines and though i never made near what American pilots do or did, i cannot hold it against them. we never get what we are worth, we only get what we can negotiate.
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Thank you, WestCoast; you're comments are factual AND appreciated. I never had a sense of entitlement, or thought the world owed me a living---but some apparently do.
I believe the poster from Belgique meant LGW-STL, not LHR. We only fly to Gatwick out of STL.
I believe the poster from Belgique meant LGW-STL, not LHR. We only fly to Gatwick out of STL.
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7 years is enough to have a stake in the outcome, 7 years is enough to have a family and a mortgage. No matter how you cut it up, TWA guys got porked.
West Coast, Well I guess by that definition 1 year is enough to have a family and a mortgage and a stake in the outcome. Seniority is a funny thing. The best definition I personally have ever heard of seniority is that "NUMBER 1" is senior, everyone else is junior. Back in the late 60's and 70's 7 years of seniority would get you a standby posiiton as a flight engineer, barely hanging on by your toe nails. The new attitude of entitlement and me me me means I suppose that at 7 years you are entitled to a Heavy Jet position flying world wide routes if that is what "YOU" want. What a crazy business, it goes up and it goes down, seems to never stay stagnant. I don't believe it has ever been a reliable place to work except for a lucky few that happened to be born at the correct time in life for the current life cycle of the business and all the stars are in alignment. But that is just not in the airline business, it really applies to alot of industries. Crazy business though.
West Coast, Well I guess by that definition 1 year is enough to have a family and a mortgage and a stake in the outcome. Seniority is a funny thing. The best definition I personally have ever heard of seniority is that "NUMBER 1" is senior, everyone else is junior. Back in the late 60's and 70's 7 years of seniority would get you a standby posiiton as a flight engineer, barely hanging on by your toe nails. The new attitude of entitlement and me me me means I suppose that at 7 years you are entitled to a Heavy Jet position flying world wide routes if that is what "YOU" want. What a crazy business, it goes up and it goes down, seems to never stay stagnant. I don't believe it has ever been a reliable place to work except for a lucky few that happened to be born at the correct time in life for the current life cycle of the business and all the stars are in alignment. But that is just not in the airline business, it really applies to alot of industries. Crazy business though.
Dudly
You are factually correct, if your number one, your number one. I however am not comfortable placing the line as to who rates and who doesn't. Seven years back in the 60's doesn't mean the same as it does now, nor will it in the future.
You are factually correct, if your number one, your number one. I however am not comfortable placing the line as to who rates and who doesn't. Seven years back in the 60's doesn't mean the same as it does now, nor will it in the future.
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AMR Reaches Tentative Deal
With All Three of Its Unions
By SCOTT MCCARTNEY
Staff Reporter of THE WALL STREET JOURNAL
AMR Corp.'s American Airlines reached tentative agreements with all three of its unions Monday, averting a bankruptcy filing.
People close to the situation said pilots, mechanics and flight attendants have all signed tentative agreements giving the company $1.8 billion in annual labor savings. The company set a mid-day Monday deadline, saying it would have to seek Chapter 11 bankruptcy protection if it couldn't reach deals.
The tentative agreements will still have to be ratified by union members over the next two weeks.
Details of the pilot and flight-attendant deals weren't yet available. American's mechanics tentatively agreed to a 17.5% pay cut, according to the Transport Workers Union, plus changes in work rules and reduction in benefits. Other divisions of the TWU, such as baggage handlers, agreed to 16% pay cuts and other changes in work rules and benefits.
In exchange for the concessions, the TWU will receive stock options or other equity in AMR.
Many people close to the situation had believed that in the end, unions would agree to the company's plan and put the concessions out for a vote by rank-and-file members. The alternative -- bankruptcy -- means contracts would be completely voided and rewritten, threatening pension benefits and deeper cuts than American has proposed.
Late Sunday night, the company gave its pilots' union a document outlining what AMR would ask for in a Section 1113 proceeding in bankruptcy court. Several pilots characterized it as worse for them than, or at least the same as, the tentative agreement UAL Corp.'s United Airlines has negotiated with its pilots while in bankruptcy. While some pilots saw the move by management as an escalation of company demands, others said AMR management seemed to be trying to pressure them to take the company's offer, rather than the more painful bankruptcy routing.
A spokesman for American said the company hadn't increased its demand of $660 million in concessions from the pilots.
American has asked its mechanics and ground workers for $620 million in concessions. Seven of the eight divisions of that union have agreed, though the mechanics, who number 16,200, have yet to sign a tentative agreement. Flight attendants, who have been asked to give up $340 million in permanent, annual payroll costs, also haven't concluded a deal.
The company also is negotiating concessions with its creditors and vendors, such as aircraft-leasing companies. Many leasing companies have agreed to reduced rates, contingent on American's securing concessions from its labor unions. Should AMR file for bankruptcy, the airline would continue to maintain its flight schedules and frequent-flier programs.
People close to the situation said that if American wins cost cuts from both unions and creditors, it won't face immediate pressure for bankruptcy protection. A steep drop in travel because of a terrorist attack or prolonged war in Iraq could change that, as could a sharp, sustained increase in fuel prices.
American, which found itself badly weakened by a one-two punch of a depressed business-travel economy and the 2001 terrorist attacks, has already cut about $2 billion a year in operating expenses. The carrier simplified its fleet, rescheduled hub airports for more efficiency and slashed spending on everything from onboard food to ticket jackets. The company has said that if it can shed close to $4 billion in annual costs, American can be an efficient, competitive airline capable of rivaling low-cost carriers and maintaining its global reach.
Updated March 31, 2003 1:45 p.m.
With All Three of Its Unions
By SCOTT MCCARTNEY
Staff Reporter of THE WALL STREET JOURNAL
AMR Corp.'s American Airlines reached tentative agreements with all three of its unions Monday, averting a bankruptcy filing.
People close to the situation said pilots, mechanics and flight attendants have all signed tentative agreements giving the company $1.8 billion in annual labor savings. The company set a mid-day Monday deadline, saying it would have to seek Chapter 11 bankruptcy protection if it couldn't reach deals.
The tentative agreements will still have to be ratified by union members over the next two weeks.
Details of the pilot and flight-attendant deals weren't yet available. American's mechanics tentatively agreed to a 17.5% pay cut, according to the Transport Workers Union, plus changes in work rules and reduction in benefits. Other divisions of the TWU, such as baggage handlers, agreed to 16% pay cuts and other changes in work rules and benefits.
In exchange for the concessions, the TWU will receive stock options or other equity in AMR.
Many people close to the situation had believed that in the end, unions would agree to the company's plan and put the concessions out for a vote by rank-and-file members. The alternative -- bankruptcy -- means contracts would be completely voided and rewritten, threatening pension benefits and deeper cuts than American has proposed.
Late Sunday night, the company gave its pilots' union a document outlining what AMR would ask for in a Section 1113 proceeding in bankruptcy court. Several pilots characterized it as worse for them than, or at least the same as, the tentative agreement UAL Corp.'s United Airlines has negotiated with its pilots while in bankruptcy. While some pilots saw the move by management as an escalation of company demands, others said AMR management seemed to be trying to pressure them to take the company's offer, rather than the more painful bankruptcy routing.
A spokesman for American said the company hadn't increased its demand of $660 million in concessions from the pilots.
American has asked its mechanics and ground workers for $620 million in concessions. Seven of the eight divisions of that union have agreed, though the mechanics, who number 16,200, have yet to sign a tentative agreement. Flight attendants, who have been asked to give up $340 million in permanent, annual payroll costs, also haven't concluded a deal.
The company also is negotiating concessions with its creditors and vendors, such as aircraft-leasing companies. Many leasing companies have agreed to reduced rates, contingent on American's securing concessions from its labor unions. Should AMR file for bankruptcy, the airline would continue to maintain its flight schedules and frequent-flier programs.
People close to the situation said that if American wins cost cuts from both unions and creditors, it won't face immediate pressure for bankruptcy protection. A steep drop in travel because of a terrorist attack or prolonged war in Iraq could change that, as could a sharp, sustained increase in fuel prices.
American, which found itself badly weakened by a one-two punch of a depressed business-travel economy and the 2001 terrorist attacks, has already cut about $2 billion a year in operating expenses. The carrier simplified its fleet, rescheduled hub airports for more efficiency and slashed spending on everything from onboard food to ticket jackets. The company has said that if it can shed close to $4 billion in annual costs, American can be an efficient, competitive airline capable of rivaling low-cost carriers and maintaining its global reach.
Updated March 31, 2003 1:45 p.m.
