American Airlines thanks workers for supporting new contracts
BY D.R. STEWART World Staff Writer
Tuesday, August 21, 2012
8/21/12 at 5:16 AM
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Nearly nine months into its bankruptcy reorganization, American Airlines has ratified contracts with 80 percent of its union workers and is moving forward on multiple fronts to create a stronger airline, CEO Tom Horton said Monday.
"Thanks to the hard work of our entire team, we have reduced debt, restructured aircraft leases, optimized the fleet and facilities, and renegotiated supplier contracts," Horton said in an email to 65,300 employees. "All of this together will reduce non-labor costs by hundreds of millions of dollars per year."
On Sunday, ratification of a six-year contract by the 18,000-member Association of Professional Flight Attendants brought American closer to its goal of reducing labor costs by $1.06 billion annually.
APFA members cast 7,482 yes votes, or 59.5 percent, to 5,088 no votes, or 40.5 percent.
Flight attendants will receive 9.5 percent wage increases over six years, a $1,500 day-of-signing bonus and a 3 percent equity claim in bankruptcy court against the reorganized American after it emerges from Chapter 11.
In an email to flight attendants, APFA President Laura Glading said the contract is preferable to the alternatives but it is by no means an endorsement of American management.
"We will now continue our strong and concise message that we have zero confidence in this management team," Glading said. "We firmly believe that the only way for American Airlines to grow and compete and perhaps even to survive is through a merger that puts (US Airways CEO) Doug Parker and his team in charge.
"For now we must remain strong and professional and work to heal from this very stressful process. It is important to remember who and what has caused this horrible situation: our current management team."
American spokesman Bruce Hicks said an early-retirement clause of the APFA contract could eliminate the need for 2,000 flight attendant furloughs and would provide flight attendants with at least 15 years at American a $40,000 early-out settlement.
"Our flight attendants join our seven TWU-represented employee groups with ratified agreements providing another step forward for our people and the company," Hicks said. "In addition to these eight ratified agreements, this past week we concluded the management/support staff redesign, and we are moving forward with changes for our independent employees.
"We also filed with the (bankruptcy) court a renewed Section 1113 motion to reject our pilot contract so we can move forward with the changes we need for our successful restructuring."
A hearing on American's motion to reject its pilots' collective bargaining agreement is scheduled for 1 p.m. Sept. 4.
In court documents filed Monday, American's aircraft restructuring consultant said American, Boeing Co. and AerCap Ireland Ltd. have entered into sale lease-back transactions for 11 Boeing 737-823 aircraft. American expects to take delivery of the 737s beginning in September through the end of 2013, court documents say.
"In recent years, the debtors have typically entered into sale leaseback transactions" said Matthew Landess, managing director at SkyWorks Capital LLC, Greenwich, Conn. "The sale proceeds that these transactions generate materially enhance the debtors' liquidity. In addition, with respect to certain existing models of aircraft, sale leaseback financing is attractive because it permits the debtors to hedge their exposure to the impact of the introduction of new aircraft models on the value of aircraft of the existing model by transferring the residual value risk associated with these aircraft to the counterparty in the transaction."
A year ago, American announced it had reached agreements with Boeing and Airbus SAS to purchase up to 400 narrow-body aircraft worth up to $38 billion.
Industry sources said American plans to take delivery of 130 Airbus aircraft, including A319s and A321s, and up to 100 Boeing 737-800s.
The new aircraft will replace American's aging fleet of fuel-guzzling MD-80 aircraft.
American Airlines union contract ratification votes
Association of Professional Flight Attendants
- Yes: 7,482 votes, or 59.5
- No: 5,088 votes, or 40.5
Transport Workers Union Mechanics & related
- Yes: 4,776 votes, or 50.25
- No: 4,728 votes, or 49.75
Stores or stock clerks
- Yes: 858 votes, or 79
- No: 229 votes, or 21
- Yes: 134 votes, or 92
- No: 12 votes, or 8 percent
- Yes: 3,872 votes, or 58.7
- No: 2,722 votes, or 41.3
Ground school instructors
- Yes: 126 votes, or 96.2
- No: 5 votes, or 3.8 percent
- Yes: 72 votes, or 93.7
- No: 14 votes, or 16.3
- Yes: 53 votes, or 85.5
- No: 9 votes, or 14.5 percent
Allied Pilots Association
- Yes: 2,935 votes, or 39
- No: 4,600 votes, or 61
Sources: American Airlines, Association
of Professional Flight Attendants,
Transport Workers Union, Allied Pilots
Original Print Headline: AMR thanks unions for support
D.R. Stewart 918-581-8451
Aerial of the American Airlines maintenance facility at Tulsa International airport. TOM GILBERT / Tulsa World