Thursday, July 17, 2003

Queen City dodges a job loss

St. Louis losing airline's call center

By Ken Alltucker
The Cincinnati Enquirer

American Airlines said Wednesday that it will close its 530-person reservations center in downtown St. Louis.

For Cincinnati officials fretting over the potential loss of another major downtown employer, American Airlines' announcement Wednesday came as welcome news. That's because the airline had considered closing Cincinnati's 602-person reservations center instead.

"We knew they were going to close something," Mayor Charlie Luken said. "The impression I got is that they liked the arrangement in Cincinnati, but they were looking at all their options."

The cost-cutting plan unveiled Wednesday included closing the St. Louis call center Sept. 15 and slashing half of the daily flights from its St. Louis hub by November.

The airline's parent company, AMR Corp., said it narrowed its second-quarter loss to $75 million from $495 million in the same year-ago period, thanks to a hefty federal aid package. Excluding special items, most notably $358 million in government reimbursements for airport-security costs during the Iraq war, AMR said it lost $357 million, or $2.26 a share, in the April-June quarter.

Revenue for the quarter was $4.32 billion, a 4 percent drop from $4.5 billion in the same period a year ago.

Airlines have been struggling with an economic downturn and the after effects of the Sept. 11, 2001, terrorist attacks.

Managers of the airline's downtown call center notified city officials that the Cincinnati office at Fourth and Walnut streets won't close - for now. An airline spokesman said the St. Louis call center had higher costs than seven other U.S. call centers. Also, the closing center accepted only domestic reservations - unlike Cincinnati, which takes domestic and international calls.

American's one-year lease of three floors at the Bartlett building expires in April 2004, and Luken acknowledged that the airline might seek some type of city subsidy for parking.

"We may have to go through this again," Luken said. "The only issue they alluded to when I met with them was parking."

In 2000, the city approved a $2.5 million incentives package and Ohio kicked in a $1.1 million loan to help Delta Air Lines build a new call center atop a parking garage at Seventh and Plum streets.

Luken counts American Airlines as one of three major downtown employers that Cincinnati could either lose or be forced to offer millions of dollars in incentives to keep.

The mayor postponed a scheduled vote Tuesday on a $63.4 million incentives deal for Convergys Corp. after a majority of City Council members signaled their intent to reject the package.

Convergys seeks the city money and a $144.2 million package from Ohio to purchase the Atrium One building on East Fourth Street and consolidate its work force, a move that would force Cincinnati Bell to seek new office space for hundreds of downtown employees. The city is renegotiating the Convergys package with an expected vote next week.


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