GRAPEVINE -- In a prelude to what is likely to be a heated debate over changing work rules, hundreds of American Airlines pilots gathered Friday for a briefing on their company's financial condition and a review of their productivity.
The meeting, the first of 14 that leaders from the airline's pilots union will hold nationwide in coming weeks, is the latest step in deciding whether to approve contract changes that would improve American's efficiency and help it compete with low-fare rivals like Southwest Airlines.
Once the "road show" is complete, union leaders will conduct a detailed survey of members on what types of changes, if any, they feel should be made to make American more competitive, said Denny Breslin, an American pilot and spokesman for the union, the Allied Pilots Association.
In February, the union's board of directors will evaluate the survey results and decide on the next step.
That could include the beginning of formal negotiations with the company on specific changes to the current contract.
Any amendments must ultimately be approved by union members, Breslin said.
"We're talking about very complex rules, and we want to take our time to make sure we do this right," he said before the meeting at the Grapevine Convention Center. "We have an opportunity here."
Work-rule changes could result in pilots spending more hours working and could slow career advancement for some.
But union officials, including Ralph Hunter, the labor group's president, argue that American can't return to profitability until the airline is as productive as its low-fare competitors.
"This is not a traditional union approach," he said.
"But I think there is a pent-up desire out there to be proactive."
Hunter stressed that he would not support any contract changes that would produce more layoffs, and he said that cuts in wages or benefits are not on the table.
Jim Philpot, an American pilot who heads the union's Dallas/Fort Worth chapter, said the current effort is "night and day" when compared with the contracts negotiated in 2003.
"We had a gun to our heads," he said as he recalled the $1.6 billion concessions package that was approved in a few months by all three of American's unions.
"It was a very black time. Today, I have a lot of optimism about the future."
Outside the meeting, opponents of changes passed out fliers that suggested that American can recover without altering contracts.
They noted that some analysts are predicting that the airline will report a profit in 2006.
"We hope that you have come prepared to ask the tough questions that need to be answered by the leadership of the APA that is supporting these expensive road shows," stated the flier, which was written by union board members from Miami, New York, San Francisco and Los Angeles.
The meeting was closed to the public. Pilots who attended said Hunter and other union leaders painted a grim picture of the airline's long-term prospects, noting its $20 billion in debt and continued pressures from low-fare rivals.
American has lost $7.5 billion since 2000, and analysts are forecasting another loss this year despite progress in cutting costs.
Hunter said after the meeting that American's relative stability -- it is not expected to file for bankruptcy within the next year -- means this is the best time to begin reviewing the contracts.
"We have the benefit of being the ones who can drive the discussion," he said. "That wasn't the case in 2003, when bankruptcy was the big threat out there."
Hunter said he was hopeful that pilots can bargain for benefits, such as stock options or bonuses, in return for helping the airline return to profitability.
"We're definitely looking for the upside this time around," he said.
Union leaders disclosed some details of American's "performance leadership initiative," a joint project begun this year by unions and management to compare the airline against its competitors on operations, costs and revenues.
Two consulting firms, Bain and Co. and the Boston Consulting Group, helped design the project.
Much of the discussion centered on productivity.
According to the airline's analysis, American is among the least-productive carriers when measured by hours flown each year by pilots.
Pilots at American will fly an average of 608 hours each in 2005, according to the analysis.
Their counterparts at Continental Airlines fly 754 hours each, on average, while Delta Air Lines pilots fly 664 hours.
Pilots at low-fare leader Southwest fly 766 hours annually.
Breslin said he "sometimes still can't believe" that airline management and union leaders are working together on joint projects.
"This has never happened before in the history of this company," he said. "We've never been able to do something like this."
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