American's concessions plan cuts vacations, wages, jobs
By Trebor Banstetter
Knight Ridder News Service
FORT WORTH, Texas American Airlines will cut 2,000 flight attendants, slash wages by nearly 16 percent, and reduce vacation time and other benefits under a proposed concessions plan approved by union leaders this week.
In addition, American will eliminate between 1,100 and 1,400 ground workers under their own concessions plan, according to union leaders. And the airline's management and support staff will face job cuts of 5 percent, salary reductions ranging as high as 17 percent, and possible changes in benefit plans, airline officials said.
American Airlines has about 200 employees in Hawai'i, none of them pilots.
Although American's three major unions approved the tentative concessions Monday, details of the deals continued to emerge yesterday, as union leaders held meetings, answered swamped phone lines, and sent e-mails to members eager for information on the givebacks.
The next two weeks will be a crucial time for all three of American's unions, as pilots, flight attendants, and ground workers decide whether to accept a total of $1.6 billion in annual concessions.
Amid the stream of information yesterday, two officials with American's pilots' union resigned their positions to protest the pilots' proposed deal. Both are part of a small group of union members who have begun an organized campaign against the cuts.
"We feel that this agreement is a precursor to a bankruptcy itself, rather than anything that would prevent a bankruptcy," said Jason Goldberg, a New York-based American pilot who is an organizer of Pilots Defending the Profession, which is lobbying pilots to reject the plan. "After we give them these cuts, we're going to see them coming back for another bite."
While pilots and ground workers detailed their cutbacks earlier this week, leaders with the flight attendants union have declined to disclose their proposed agreement.
But a summary of the plan distributed to members yesterday, and obtained by the Fort Worth Star-Telegram, outlines many details, including:
A 15.6 percent cut in pay effective May 1. Starting May 1, 2005, flight attendants will receive 1.5 percent raises annually.
A 50 percent reduction in premium pay for working as a purser or in the galley, or having fluency in a foreign language.
Elimination of extra pay for working holidays, nights or on arrow-body airplanes.
Reduction in vacation time by one-third.
The time given to rest during layovers will be reduced to the minimums set by the Federal Aviation Administration.
Flight attendants who are on voluntary leave because of a surplus of employees will lose some benefits.
Tightened work rules will mean more layoffs, and job reductions would total as much as 2,000. More than 1,000 flight attendants jobs have been cut during the past six months.
"There is no denying it, $340 million dollars in annual concessions from our contract isn't pretty," John Ward, president of the Association of Professional Flight Attendants, told members in a recorded statement.
But given the dismal state of the airline and the possibility of a bankruptcy filing, the agreement is "the best proposal that can be obtained," he said.
While the Transport Workers Union, which represents 34,000 ground workers, outlined pay cuts and work rule changes Monday night, union leaders disclosed job cuts for the first time late yesterday.
According to Jim Little, the union's international vice president, between 1,100 and 1,400 jobs will be cut because of tightened work rules that eliminate the need for many positions.
Under the proposed plan, American's mechanics will face a 17.5 percent pay cut, and other ground workers will see wage cuts ranging from 6.6 percent to 19 percent.
Management and support staff, who are not union-represented, were told this week that their own ranks would be pared by 5 percent. Those job cuts are in addition to a 22 percent reduction in jobs since Sept.11, 2001, airline officials said.
Salaries will be cut by 4 to 17 percent, effective May 1. The management and support staff cuts will total $100 million annually.
Despite the turmoil, the stock of AMR Corp., American's parent company, continued its three-day jump, rising 42 percent to close at $4.25 per share in trading on the New York Stock Exchange yesterday.