AMR Wants $21.2 Million In Wage, Benefit Concessions From American Eagle
March 22-- AMR Corp., the bankrupt parent of American Airlines, is asking for $12 million a year in wage and benefit concessions from American Eagle mechanics and $9.2 million a year in concessions from American Eagle flight attendants, company executives said Wednesday.
In term sheets delivered in Fort Worth to representatives of the mechanics and flight attendants, company executives said the cuts are needed for American Eagle to compete in the regional airline industry.
Reaction was swift and unhappy from mechanics and flight attendants.
"We're cautiously optimistic about the plan we saw today for American Eagle because it presents a viable path for a sustainable business going forward," said James C. Little, international president of the Transport Workers Union. "But it's disheartening to see that once again, management wants to finance restructuring on the backs of workers who have already made enormous sacrifices. AMR is demanding over $12 million a year in concessions from TWU mechanics at American Eagle.
"We're going to examine the company's proposal very closely. We're looking for ways to help sustain a profitable business without imposing unnecessary hardships on our members, who have already gone the extra mile to keep American Eagle's planes in the sky."
In 2003, to help American avert a bankruptcy filing, the company's unionized mechanics, flight attendants and pilots agreed to $1.62 billion a year in wage and benefit concessions that remain in force today.
A spokesman for American Eagle's flight attendants hopes that U.S. Bankruptcy Judge Sean Lane will take a dim view of the company's insistence on further wage and benefit cuts.
"It is not right. It is not fair," Association of Flight Attendants spokesman Robert Barrow told the Fort Worth Star-Telegram.
American Eagle CEO Dan Garton and company executives said the company must have $75 million in annual employee labor cost savings to make the airline competitive with carriers such as Republic Airways and Pinnacle Airlines.
Garton said AMR's planned divestiture of American Eagle is on hold during AMR's Chapter 11 restructuring process.
During the restructuring, American Eagle will go forward on a business plan with parallel tracks: as a regional flying subsidiary of American Airlines and as a stand-alone company, company executives said.
"There is no denying that these changes will be difficult," Garton told employees in an email Wednesday. "But achieving competitive costs is absolutely necessary in order for us to justify American's investment in new aircraft for Eagle to operate on its behalf. If we miss this opportunity to demonstrate that Eagle has fully competitive costs, it would provide American and AMR another reason to select other regional carriers to assume this responsibility and provide the feed we might otherwise provide."
Garton said American Eagle must retire older and less efficient aircraft and expand the use of larger 50-plus-seat regional aircraft to funnel passengers to and from American's regional hub airports at Dallas-Fort Worth, Los Angeles, Chicago, New York and Miami.
American Eagle operates 260 aircraft and has 13,000 employees.
AMR, which filed its bankruptcy petition Nov. 29, said it needs $1.25 billion a year in labor cost savings and $3 billion a year in cost reductions overall to emerge from bankruptcy and compete successfully in the airline industry. The company said it must cut 13,000 employees from its work force of 87,000.
The layoffs would include 2,100 mechanics and related work groups at American's Maintenance & Engineering Center in Tulsa.
D.R. Stewart 918-581-8451
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