American Airlines Pilots Mull Concessions

FORT WORTH, Texas – Leaders of the pilots’ union at American Airlines have agreed to consider concessions to help the nation’s largest carrier survive the long slump gripping the U.S. airline industry.

The union leaders voted to open preliminary talks aimed at easing work rules to raise productivity. For example, pilots could be asked to fly longer hours each month.

Union President Ralph Hunter ruled out negotiating pay cuts, benefit reductions or layoffs.

Directors of the Allied Pilots Association voted 12-6 to direct Hunter to begin discussions with company management. Hunter argued that the union should begin preliminary talks soon and that waiting could only lead to more drastic cuts if American’s financial situation worsens.

Hunter said the union’s 13,000 pilots would have final say on any contract changes.

American Airlines Chief Executive Gerard Arpey, speaking to reporters before the union board vote, said the carrier was trying to involve its labor groups in solving its problems.

In recent months, Arpey has ducked questions about whether he would ask employees for wage or other concessions. He has, however, noted that three other U.S. carriers are in bankruptcy protection, which gives them more leverage to force pay and benefit cuts on workers.

Delta Air Lines Inc. and Northwest Airlines Corp. have moved to use bankruptcy court protection to scale back the terms of contracts with union workers, and Northwest has indicated it will outsource the jobs of some flight attendants.

In 2003, pilots and other union employees at American agreed to six-year contracts that included deep cuts in wages and benefits, saving American about $1.6 billion a year. American and its parent, Fort Worth-based AMR Corp., had threatened to file for bankruptcy protection without the concessions.

Passenger traffic has grown steadily over the past three years, but rising jet fuel costs and competition from low-fare carriers have led to continuing losses at AMR and many other U.S. carriers. Last month, AMR reported a $15 million loss for the third quarter despite a 15 percent increase in revenue.

Arpey said at the time that AMR’s inability to turn a profit despite strong traffic “underscores the need to accelerate our cost-cutting initiatives across the board.”

AMR shares rose 31 cents, to $14.50 in trading Thursday morning on the New York Stock Exchange.

—

On the Net: http://www.aa.com