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American Airlines Pilots OK Concessions
By ANGELA K. BROWN
.c The Associated Press
FORT WORTH, Texas (AP) - American Airlines pilots approved wage and other concessions that the airline said it needed to avoid filing for bankruptcy, the pilots' union announced Tuesday.
American, the world's largest carrier, was waiting for results of voting by flight attendants and ground workers, which were also expected Tuesday.
Airline officials had vowed to file for bankruptcy quickly if any of the three unions rejected the concessions. American is trying to cut labor costs by $1.8 billion a year, or more than 20 percent.
Leaders of American's three main unions had reluctantly supported the concessions as a better alternative than bankruptcy. They feared that American could use the bankruptcy process to impose even harsher cuts and reduced pension benefits.
But angry employees packed union meetings to complain that terms of the concession deals were too harsh. They objected to the length of the deals - nearly six years - and small raises in later years.
American sweetened the deals last week by offering one-time bonuses of up to 4.5 percent in 2006 or later if the company's credit ratings improve sharply.
The Allied Pilots Association said its members approved the concessions 69 percent to 31 percent. The union said 10,200 pilots, a high turnout, took part.
Discussions between the company and union leaders continued up to the end of voting. Pilots' union president John Darrah met with American chairman and chief executive Donald J. Carty on Tuesday morning before either man knew the results of the voting, a union spokesman said.
The flight attendants' union said it asked Monday for more time to vote because of problems with balloting but American denied the request. A union spokesman said there was a delay in making contract language available to employees.
The union elections were conducted by phone and over the Internet - an accelerated process needed to meet American's ratification deadline.
Employees began voting shortly after negotiators for the company and unions reached tentative agreements March 31.
Pilots and ground workers were able to change their votes until Tuesday, but flight attendants were not, raising concern that many flight attendants had voted to reject the deal before American sweetened the offer last week with possible bonuses.
American sought $660 million in annual concessions from its 12,000 pilots, $620 million from 34,000 ground workers and $340 million from 24,000 flight attendants. The agreements include layoffs for 2,500 pilots, about 2,000 flight attendants and up to 1,400 ground workers.
Carty warned that if American went into bankruptcy, it would seek $500 million in additional labor concessions.
American's parent, Fort Worth-based AMR, has lost nearly $5.3 billion in the past two years and continues to lose about $5 million a day.
In a report disclosed Tuesday, AMR's auditor, Ernst & Young LLP, questioned the company's ability to stay in business.
The auditors cited AMR's ``significant losses'' and uncertainty about its ability to cut operating costs. They also raised doubt about whether AMR could meet a $1 billion liquidity requirement for an $834 million line of credit.
The auditors' concerns were included in AMR's annual report filed Tuesday with the Securities and Exchange Commission.
American has been battered by a weak economy, terrorism and competition from low-cost airlines on 80 percent of its routes. Those factors have hit hard at business travel, which was a lucrative part of American's business.
American says it has cut other costs $2 billion per year. It is negotiating with suppliers and aircraft lease holders for more favorable terms, and even offering stock options to suppliers.
Labor concessions were expected to avert an immediate bankruptcy filing but wouldn't improve American's weak revenue and might not solve its long-term problems, analysts say. The concessions would not have been enough to erase AMR's loss last year.
AMR stock surged before union voting results were announced. In midday trading Tuesday on the New York Stock Exchange, AMR shares rose 63 cents, or 20.5 percent, to $3.71.
By ANGELA K. BROWN
.c The Associated Press
FORT WORTH, Texas (AP) - American Airlines pilots approved wage and other concessions that the airline said it needed to avoid filing for bankruptcy, the pilots' union announced Tuesday.
American, the world's largest carrier, was waiting for results of voting by flight attendants and ground workers, which were also expected Tuesday.
Airline officials had vowed to file for bankruptcy quickly if any of the three unions rejected the concessions. American is trying to cut labor costs by $1.8 billion a year, or more than 20 percent.
Leaders of American's three main unions had reluctantly supported the concessions as a better alternative than bankruptcy. They feared that American could use the bankruptcy process to impose even harsher cuts and reduced pension benefits.
But angry employees packed union meetings to complain that terms of the concession deals were too harsh. They objected to the length of the deals - nearly six years - and small raises in later years.
American sweetened the deals last week by offering one-time bonuses of up to 4.5 percent in 2006 or later if the company's credit ratings improve sharply.
The Allied Pilots Association said its members approved the concessions 69 percent to 31 percent. The union said 10,200 pilots, a high turnout, took part.
Discussions between the company and union leaders continued up to the end of voting. Pilots' union president John Darrah met with American chairman and chief executive Donald J. Carty on Tuesday morning before either man knew the results of the voting, a union spokesman said.
The flight attendants' union said it asked Monday for more time to vote because of problems with balloting but American denied the request. A union spokesman said there was a delay in making contract language available to employees.
The union elections were conducted by phone and over the Internet - an accelerated process needed to meet American's ratification deadline.
Employees began voting shortly after negotiators for the company and unions reached tentative agreements March 31.
Pilots and ground workers were able to change their votes until Tuesday, but flight attendants were not, raising concern that many flight attendants had voted to reject the deal before American sweetened the offer last week with possible bonuses.
American sought $660 million in annual concessions from its 12,000 pilots, $620 million from 34,000 ground workers and $340 million from 24,000 flight attendants. The agreements include layoffs for 2,500 pilots, about 2,000 flight attendants and up to 1,400 ground workers.
Carty warned that if American went into bankruptcy, it would seek $500 million in additional labor concessions.
American's parent, Fort Worth-based AMR, has lost nearly $5.3 billion in the past two years and continues to lose about $5 million a day.
In a report disclosed Tuesday, AMR's auditor, Ernst & Young LLP, questioned the company's ability to stay in business.
The auditors cited AMR's ``significant losses'' and uncertainty about its ability to cut operating costs. They also raised doubt about whether AMR could meet a $1 billion liquidity requirement for an $834 million line of credit.
The auditors' concerns were included in AMR's annual report filed Tuesday with the Securities and Exchange Commission.
American has been battered by a weak economy, terrorism and competition from low-cost airlines on 80 percent of its routes. Those factors have hit hard at business travel, which was a lucrative part of American's business.
American says it has cut other costs $2 billion per year. It is negotiating with suppliers and aircraft lease holders for more favorable terms, and even offering stock options to suppliers.
Labor concessions were expected to avert an immediate bankruptcy filing but wouldn't improve American's weak revenue and might not solve its long-term problems, analysts say. The concessions would not have been enough to erase AMR's loss last year.
AMR stock surged before union voting results were announced. In midday trading Tuesday on the New York Stock Exchange, AMR shares rose 63 cents, or 20.5 percent, to $3.71.
Dennis Miller
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With this TA a year from now, look for about 50 of those to be CRJ captains at Eagle.
Look for NONE to be EMJ captains for AT LEAST 2 years until Eagle receives all its "replacement" aircraft.
Once that is complete, EMJ captain slots in new aircraft will be offered.
However, if AMR shoots a big order in for 70 seaters than many more furloughees will have jobs at Eagle (or Connection).
Look for NONE to be EMJ captains for AT LEAST 2 years until Eagle receives all its "replacement" aircraft.
Once that is complete, EMJ captain slots in new aircraft will be offered.
However, if AMR shoots a big order in for 70 seaters than many more furloughees will have jobs at Eagle (or Connection).
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