Tuesday, March 18, 2003

American Airlines steps up negotiations

Carrier wants unions to agree on $1.8 billion in pay cuts

By David Koenig
The Associated Press

DALLAS - American Airlines began formal negotiations Monday with the last of its major unions over proposed pay and benefit cuts of $1.8 billion a year that are aimed at keeping the world's largest carrier out of bankruptcy court.

Negotiators for the airline had their first formal sessions with representatives of 26,000 flight attendants and 34,500 mechanics and other ground workers.

The carrier has been negotiating almost daily with the union for its 13,500 pilots since late last month, and those talks also continued Monday.

American expects the talks to result in agreements quickly.

"This is not going to be a protracted process, nor is it expected to be," airline spokesman Bruce Hicks said. "I think the labor groups understand the urgency that we're working under."

American has asked for $660 million in annual cuts from pilots, about 30 percent of their wage and benefit payments. Some of the savings are expected to come through layoffs, and the airline is seeking a relaxing of union-negotiated work rules.

Three weeks of negotiations have failed to produce agreement on any topics, although officials for both the airline and the Allied Pilots Association say they have made progress.

Discussions have focused on issues such as staffing levels. American wants to reduce the number of reserve pilots, while the union wants to replace lower-paid pilots on American Eagle commuter flights with its own members.

"We're not going to roll a wheelbarrow of cash across the street and say, `Here you go, fellows,' " said Steve Blankenship, a spokesman for the pilots' union. "We are looking at ways to improve the productivity of American Airlines."

Pilots are the highest-paid employees in the airline industry and enjoy better pension benefits that could be wiped out if American's parent, AMR Corp., files for bankruptcy protection. As a result, many analysts expect the pilots' union to be the first to settle.

"We've been at the table with these specific reductions longer with the pilots, and it's been moving at a fast pace," said Hicks, the airline spokesman. "It well could be that they could be the first to reach an agreement."

American is seeking to cut ground workers' pay 16 percent and cut health benefits, vacations and paid holidays. The airline said those demands are negotiable, but the need for $620 million in cuts from transport workers is not.

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