A discussion about the airline industry, airline employees, and all things related

American Airlines (AMR) is facing some difficult months ahead as their labor groups and the airline start to look at new contracts.  In the most recent news out of new labor contracts, American Airline rejected a pay proposal by the APA on Thursday.  American claims that the proposal by the APA would raise labor costs by $1.4 billion each year and would mean that pilot costs would be nearly double that of Delta and Continental Airlines. 

The APA has cited years of reduced benefits for employees while executives at the airline received massive bonuses.  The APA believes that the employees should be sharing in the success of the airline in recent years.  The union proposed returning to 1992 pay levels which would result in a 50 percent pay increase between 2007 and 2008 just weeks ago along with other proposals.  The union estimated that raising pilot’s pay would only result in a half a cent per seat mile increase in American’s labor cost result in just an $850 million dollar increase in labor, not $1.4 billion.

Another labor group, the Transport Workers Union, which has been one of the easier labor groups that American has had to deal with, has started to ask where their share is at.  The TWU which accepted 2003 pay cuts keeping the airline out of bankruptcy wants to return to 2003 pay levels.  They are also very upset about the stock bonuses that the executives received at the airline in 2006 and 2007. 

I’m sure there will so much coming out of the labor talks and contracts.  American faces an uphill battle, fighting off soaring fuel costs, negative perceptions of executive bonuses and labor groups that want their fair share.

Dallas Morning News 

American Airlines Negotiations Website

APA Negotiation Website