Jan. 26--American Airlines makes so much money in Miami that the carrier's Latin American hub could actually benefit from the company's bankruptcy, a top union official said Wednesday.
Scott Shankland, an American pilot in Texas and treasurer for the Allied Pilots Association, said Miami International Airport will probably grow more important to American as the Fort Worth-based company cuts its way out of bankruptcy.
With American's lucrative Latin American routes the envy of the airline industry, MIA's dominant role in that region should keep American investing in Miami even as it pulls back from other airports, Shankland said.
"American Airlines has been struggling to dig itself out of a ditch management put them in. But not in Miami," Shankland told a luncheon audience of the Downtown Bay Forum. American's bankruptcy "will affect Miami a lot. But I think its going to affect Miami in a very positive way."
His comments reflected what analysts said after American and its parent company, AMR Corp., filed for Chapter 11 bankruptcy protection on Nov. 29.
With Latin American routes both more profitable than domestic flights and poised for more growth, American would do whatever it could to keep growing at MIA. South Florida's largest airport is responsible for about two-thirds of American's flights to the Caribbean, Latin America and Mexico, according to MIA figures.
Anne Lee, MIA's finance chief, said the airport is owed about $15 million in back rent and landing fees from American, equivalent to about one month's worth of revenue from the carrier. The fee was due shortly after the bankruptcy filing and was frozen by the proceedings.
Otherwise, American continues paying on time "exactly what they were paying before" under the supervision of a New York bankruptcy court. Miami-Dade is among AMR's top 50 creditors, mainly thanks to the $25 million the company owes for its new North Terminal by 2014.
Lee said the airline has promised to pay the debt in full, but that MIA can collect money through monthly billings under a provision in American's deal with Miami-Dade.
"Essentially, if we don't get it one way, we'll get it another," Lee told the luncheon audience for the Forum's talk on the local impact of American's bankruptcy.
Shankland's optimistic take on American's prospects in Miami stood out given his position in labor's battle with management over how American should right its finances and survive.
Competitors are circling in hopes of buying up AMR on the cheap, with Delta and United on the list of potential suitors, possibly with support from British Airways. AMR this week held back $93 million of a $99 million pension contribution due in January, but top executives assured workers their future benefits are safe.
Shankland told the crowd at Temple Israel's Wolfson Auditorium that if American focused too heavily on labor costs in the reorganization, "the future of this airline doesn't look very bright."
Sidney Jimenez, president of the union representing American baggage handlers in South Florida, said the bankruptcy could still mean pay cuts and lost pensions for American's 9,000 workers in Miami-Dade, where it is the fourth-largest private employer.
Jimenez accused American of wringing concessions from workers in past fiscal crises, while management continued to prosper. Tom Horton, promoted from CFO to CEO after the bankruptcy filing, had total compensation listed at $12 million since 2007, according to regulatory filings, but a company spokesman said actual pay was closer to $8 million.
"Every time the employees of the airline stepped up to the plate," Jimenez said, "we kind of got our toes stomped on."
Copyright 2012 - The Miami Herald
