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Arpey Wants Help of Labor

Posted on: Thursday, 6 October 2005, 21:00 CDT

By Eric Torbenson, The Dallas Morning News

Oct. 7--American Airlines Inc.'s chief executive suggested Thursday that the carrier's unions would have to offer more concessions to help it stay solvent.

"We have been, in my mind, continuously restructuring the company for many years now and we're going to have to continuously reconstruct the company going forward, and we need labor to be our partner in that process," chairman and CEO Gerard Arpey said. "We're going to work together to find our way out of this situation."

Mr. Arpey discussed the issue with reporters after a speech to the World Affairs Council of Greater Dallas at the Grand Hyatt hotel at Dallas/Fort Worth International Airport.

He didn't use the word "concessions." But he signaled that the airline -- the last major network carrier to avoid bankruptcy court -- can't survive in its current state. American's 80,000 employees have given back $1.8 billion in annual wages and benefits since May 2003.

At least one union chief said he thinks Mr. Arpey is all but asking for work rule changes that will aid the Fort Worth-based carrier, which has lost $7 billion in the past four years.

Ralph Hunter, president of the Allied Pilots Association, told his board of directors late last month that Mr. Arpey has laid out the grim facts of the carrier's fast-deteriorating finances and expects pilots to conclude that they need to give something back.

"We have the ability to do this right," Mr. Hunter said in an interview last week. "The longer we wait, the less amount of luxury we'll have in making choices -- we won't get to study this forever."

No concession talks are under way, Mr. Hunter noted, and it will ultimately fall to his board to start talks with the carrier. Any possible changes in the union's contract would explore pilot scheduling efficiency and not address wages or pensions, he added.

Mr. Hunter's opponents on the board are urging American's 12,000 pilots to change directors to protect pilot interests and not concede any more to the airline.

"The gap at the BOD table between the company advocates and those pilots who represent pilots is closing," said Hunter opponent Sam Mayer, a New York-based pilot and union board member in an e-mail to pilots.

"I'm sure the concessionaires recognize the threat, and will attempt sooner rather then later to ram through a concessionary package before the membership has a chance to effect a change at the [board of directors] table."

Mr. Hunter said he cannot spend time fighting board dissidents, but instead must put his energy into persuading the average pilot about the urgent situation facing American. Mr. Arpey said he pleased with how all his labor leaders were working in the new cooperative process he installed 21/2 years ago designed to revolutionize airline-labor relations. He would not discuss whether he expects the unions to volunteer concessions.

Mr. Arpey's address dealt with threats to his airline and D/FW Airport that threaten both their abilities to compete in the globalized economy. Taxes, jet fuel and Southwest Airlines Co.'s campaign to end flight restrictions at Dallas Love Field -- potentially forcing American to unravel its D/FW hub to compete at Love -- all concern him.

"To purposefully weaken D/FW would be akin to unilaterally disarming in the fight to attract talent, jobs and capital to North Texas," Mr. Arpey said.

Shares of American parent company AMR Corp. rose 87 cents to $12.43.

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AMR, LUV,

Source: The Dallas Morning News

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