American Woos Unions, Seeking Cooperation

American was one of the leanest major carriers after winning labor concessions in 2003, but recent bankruptcy filings by other airlines indicate that American once again has among the highest costs in the industry.


"Look at the carnage going through our industry, and we're surviving," said Rick Grant, a 17-year American employee. "How can you not think about that? We chose one route, and (Northwest mechanics) chose another."

Some of the victories in the battle to cut costs may sound minor to an outsider, but workers say they save valuable time. For example, parts are now grouped in kits and kept near the plane instead of making the mechanic order each part and wait for somebody to deliver it.

It's not clear whether the union's conciliatory mood will help American avoid more painful cutbacks or even bankruptcy. CEO Arpey has avoided saying whether he would ask employees for wage or other concessions, but many analysts believe they are inevitable with American's three largest rivals now in bankruptcy and shedding costs and pension liabilities.

American was one of the leanest major carriers after winning labor concessions in 2003, but recent bankruptcy filings by Delta Air Lines Inc. and Northwest Airlines Corp. indicate that American once again has among the highest costs in the industry.

Even if fuel prices fall, they will fall for everybody, and American's costs will remain among the highest in the industry, said Robert Mann, an airline consultant who advised American's pilots in 2002-03. He predicted American's management will ask for productivity improvement and will downsize through attrition and, eventually, layoffs.

But Michael Boyd, an airline consultant and former American employee, said American might increase revenue enough - demand for travel is strong - to avoid painful labor cuts despite competition from bankrupt carriers.

Jeff Brundage, American's vice president of labor relations, said the company's employees learned in 2003 that contracts won't protect jobs, wages or pensions if the company fails. "Restructuring American is what makes us secure for the long term," he said.

Brundage said the changes now underway will make the company profitable. The union employees are keeping track of that prediction.

"I look at the stock price every day," said Finley, the crew chief at the Alliance hangar. "We all do."

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