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WSJ: AMR also is seeking to outsource flying of any planes with fewer than 89 seats

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And where are the "low-balling" regionals going to get all the pilots needed after Aug, 2013, when ALL their new hires (and existing pilots) will need an ATP?????????????

I don't think AA mgmt are taking this situation into account in their "long-range" planning!

cliff
HSV
 
Thats there problem. If they can't fly the planes they said they could, they get docked... Thats the best set up for AA.. All the gain, non of the pain.. They have there own A319/738 game to play...
 
99 seats is more practical than 120. 2 FA vs 3 FA. Regional pilots could never handle 3 temperature controllers in the back.

Nothing more needs to be said. This quote answers everything...LOL
 
American Airlines parent AMR Corp. Wednesday said it will seek to cut 13,000 jobs and terminate pensions in pursuit of $2 billion in annual costs savings, tipping its hand for the first time in what could be a long and painful bankruptcy proceeding.

The company said it wants to reduce labor costs by $1.25 billion a year, or 20%. That includes cutting its work force of 88,000 by nearly 15%, imposing new productivity measures and outsourcing some work. The company also aims to terminate its four underfunded pension plans, a move that would represent the largest pension default in U.S. history.

"The world has changed around us and this is our moment to adapt or lose the opportunity forever," AMR Chief Executive Tom Horton said in a letter to employees.

Mr. Horton, who with senior executives Wednesday laid out the plans to leaders of American Airlines' three big labor unions, also said "we will end this journey with many fewer people. But we will also preserve tens of thousands of jobs that would have been lost if we had not embarked on this path."

Rivals are circling AMR in its bankruptcy, mulling takeovers or asset purchases. They include Delta Air Lines Inc., US Airways Group Inc. and private-equity firm TPG Capital. Mr. Horton warned employees that "we are at great risk during this time" as others seek to acquire the company or its assets or break up the airline and that "the best way for us to assure that we are in control of our own future is to make the necessary changes (and) complete our restructuring quickly."

AMR's plan faces a number of hurdles, including convincing U.S. Bankruptcy Court Judge Sean Lane that the carrier won't be able to successfully reorganize without these savings. The desired labor cuts will first be subject to negotiations between the company and its unions. If the unions balk, AMR could petition the judge to let it modify the contracts and impose the changes it seeks.

"The piece I'm personally shocked by is the depth of the concessions they're asking for," said Transport Workers Union International President James C. Little. "We're going to fight this."

To win approval for the desired pension terminations, AMR will need to make a similar case to the judge over what is expected to be fervent opposition from the Pension Benefit Guaranty Corp. The PBGC, a federal pension insurer, would have to take over the plans, adding to its already record deficit.

AMR, the nation's No. 3 airline by traffic, has struggled financially since 2001, losing $12.5 billion from that year through the first nine months of 2011. The Fort Worth, Texas, company filed for bankruptcy-court protection Nov. 29. As part of its turnaround plan, Mr. Horton said AMR seeks $750 million a year in other savings from restructuring debt and aircraft leases, grounding older planes and redoing supplier contracts.

The company also wants to boost its revenue by $1 billion a year by renewing and optimizing its fleet, expanding its network reach and improving the product it offers to customers. As part of that plan, Mr. Horton said, the company intends to increase its number of flights from its five main domestic markets—Dallas, Chicago, Miami, Los Angeles and New York—by 20% over the next five years.

More than eight years ago, AMR staved off a Chapter 11 filing when employees voluntarily agreed to $1.8 billion in annual concessions. But many of its rivals used the bankruptcy-court process to extract much larger cuts, and some of them also shed their pension obligations. Then they consolidated, creating larger airlines with better route networks and strong relationships with foreign partners. American, mired in its own problems, sat out that dance.

The four largest carriers that restructured under court protection in recent years chopped labor costs by an average of 42% and cut their full-time-equivalent employees by 45%, according to Bill Swelbar, an airline researcher at the Massachusetts Institute of Technology. To match those savings, American needs to cut another $1.5 billion in labor costs and nearly 14,000 jobs on top of the changes made in 2003, he said.

Mr. Horton's overall labor-savings goal of $1.25 billion a year is not far off that mark, especially because rivals' labor costs are rising as unions negotiate new contracts. The reduction of 13,000 or more of AMR's workers also would comport with steps rivals took.

The company said 8,800 mechanics, fleet-service workers and other employees represented by the Transport Workers Union are expected to be cut. Some 2,300 flight-attendant positions will be eliminated, along with 1,400 management and staff jobs. Some of the job cuts would come from the outsourcing of some aircraft maintenance and the closure of one of AMR's maintenance bases, and from outsourcing some airport fleet-service positions, said Jeff Brundage, American's senior vice president of human resources.

AMR said job reductions among customer service agents and other workers haven't been determined. The company said it is going to reduce its management positions by 15%. AMR's American Eagle regional subsidiary also is expected to be asked for cost-savings.

The PBGC already has warned that it will fight AMR on the pension terminations. "Before American takes such a drastic action," agency Director Josh Gotbaum said Wednesday, "it needs to show there is no better alternative."

The PBGC, already laboring under a record $26 billion deficit, estimates that the plans have assets of $8.3 billion to cover $18.5 billion in benefits. The agency is limited on what it can pay to retirees, thus the highest-paid AMR workers, particularly the pilots, would receive much less than they would have if the plans weren't jettisoned.

The plans would be replaced by 401(k) plans with a company match for employees who contribute. Workers would have to contribute toward their medical plans and the company would discontinue retiree medical coverage, Mr. Brundage said. But he said AMR intends to provide all employee groups with annual pay increases.

"It's sweeping, there's no doubt about that. A complete remake of the contract," said American Airlines pilot and union spokesman Tom Hoban. "This is their opening bargaining position—we expected it to be onerous. We're going to move the ball down the field and hope to meet them in the middle."

AMR has no set timeline in which it hopes to reach consensual agreements with its unions on the new terms it seeks. But Mr. Horton said it is in the best interests of the company and employees "to get on with this" and achieve agreement as soon as possible.

Mr. Hoban, the spokesman for the Allied Pilots Association union, said the company wants authority to require its pilots to fly 100 hours a month, or 15 hours more than their current labor contract allows.

The company also is seeking to outsource flying of any planes with fewer than 89 seats, instead of the current limit of 50 seats. Only about 400 pilot positions will be eliminated out of 10,000.

The company's proposal "is even more extreme and despicable than we had anticipated," Laura Glading, president of the Association of Professional Flight Attendants union said Wednesday.

AMR's six-year contract offer to flight attendants would increase salaries by 1.5% a year but also require flight attendants to work up to 100 hours per month—up from a maximum of 83—and reduce vacation and sick-day accrual rates.

http://online.wsj.com/article/SB10001424052970204740904577197122405984872.html?mod=fbapp_art_onwsj

https://apps.facebook.com/wsjsocial/articles/SB10001424052970204740904577197122405984872

This is absolutely horrible news.

High fuel prices and 50 seat retirements will effectively end regional flying as we know it. I hope this scope increase never happens.
 
The problem here is that the 89 seat rates should be the same as mainline. Thus making the scope pointless. But it's not and republic pilot are salivating at the thought of flying the heavy emb for American.
 
And where are the "low-balling" regionals going to get all the pilots needed after Aug, 2013, when ALL their new hires (and existing pilots) will need an ATP?????????????...

From AA....since they're gonna RE-furlough! That's where! My guess is 1000.
 
The problem here is that the 89 seat rates should be the same as mainline. Thus making the scope pointless. But it's not and republic pilot are salivating at the thought of flying the heavy emb for American.





A PSA Captain who voted in favour of his S---y LOA 18 months ago for CRJ900 rates now talking.....

amazing isnt it?
 
No, not amazing. Let's not forget how PSA ended up with the shiny new jets to begin with while the other two wholly owned USAir feeders were left to whither on the vine flying run out Dash's.

Not amazing at all.
 
Last edited:
A PSA Captain who voted in favour of his S---y LOA 18 months ago for CRJ900 rates now talking.....

amazing isnt it?

I'm one of 36 that voted a loud "NO". But thanks for remembering. It pisses me off too.
 

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