Business 2012 Look Back: American Airlines works to reorganize after bankruptcy
BY D.R. STEWART World Staff Writer
Sunday, December 30, 2012
12/30/12 at 4:58 AM
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AMR Corp.'s American Airlines plunged into bankruptcy late in 2011, and it spent 2012 restructuring its operations and battling with its unionized pilots, mechanics and flight attendants.
The first shock for employees in the new year came on Feb. 1, when American said it needed to cut 13,000 employees, including 9,000 members of the mechanics' Transport Workers Union, and reduce labor costs by $1.25 billion annually to compete in the airline industry.
The initial shock was renewed on March 27, when lawyers for AMR filed a motion in U.S. Bankruptcy Court to reject its three collective bargaining agreements with the TWU, the Allied Pilots Association and the Association of Professional Flight Attendants.
A month later, on April 20, following a public campaign for a merger of US Airways and American by US Airways CEO Doug Parker, American's unionized pilots, mechanics and flight attendants reached labor agreements with US Airways that would be effective in a merger of the two companies.
Five of seven TWU work groups accepted American's final contract offer on May 15, but mechanics and stock clerks rejected the offer.
The mechanics and stock clerks narrowly approved American's revised six-year contract offer on Aug. 8, but 24 hours later the pilots rejected their tentative contract agreement.
On Aug. 31, American and US Airways signed non-disclosure agreements under which the carriers exchange proprietary financial information. The non-disclosure agreements expire in January, officials said.
On Sept. 10, American executives said the company's Fort Worth Alliance Airport maintenance base would close by the end of the year.
The company said more than 1,700 mechanics & related workers at American's Alliance, Dallas/Forth Worth International Airport and Tulsa maintenance bases would be laid off in December and February.
American's pilots began reporting increased mechanical and equipment failures in mid-September, leading to rising numbers of flight delays and cancellations in September and October.
On Dec. 7, 74 percent of APA members casting ballots ratified the pilots' six-year contract that features up to 39 percent wage increases and a 13.5 percent equity stake in the reorganized company.
APA President Keith Wilson said the pilots continue to support a merger with US Airways.
On Dec. 14, American said 43 TWU mechanics & related workers had been laid off in Tulsa. Another 30 workers had lost their jobs earlier, TWU executives said.
The layoff numbers were a ray of sunshine compared with American's original layoff target of 2,700 in Tulsa, officials said.
Negotiated early retirements in Tulsa of 773 TWU members, transfers of 70 to other bases and the acceptance by dozens of mechanics of reduced job titles and lower wages helped avert a worse outcome, company and union executives said.
But TWU executives, too, said their preferred outcome is a merger with US Airways.
Original Print Headline: AMR works to reorganize
D.R. Stewart 918-581-8451
An American Airlines worker rides a bike at the American Airlines Maintenance & Engineering Center in September. American Airlines' parent AMR Corp. spent 2012 restructuring after filing for bankruptcy in 2011. MIKE SIMONS / Tulsa World file