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- Dec 21, 2002
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CEO: Airline borrowing money to make payroll
Associated Press
DALLAS - American Airlines Inc., which is borrowing money to make payroll, needs to cut additional costs and is turning to labor unions, the carrier's chief executive says.
With American losing several million dollars a day, CEO Donald Carty says managers need faster cooperation from unions representing airline employees to get out of the cash crunch.
The world's largest carrier, which says it has already cut $2 billion a year in structural costs, wants to extract another $2 billion in labor-related savings to reach its $4 billion annual goal.
Fort Worth-based American last August announced 7,000 layoffs and the mothballing of jets. In December, the airline announced it limit flight attendant layoffs to 400 by allowing almost 500 workers to take unpaid leave and letting others share jobs in an agreement reached with a union.
The airline's Securities and Exchange Commission filings show it has $2.8 billion in cash and liquid assets. Analysts say parent AMR Corp. is in no immediate danger of bankruptcy. Carty has said American doesn't plan to go down the road of United, the world's second-biggest airline, which has filed for Chapter 11 bankruptcy protection.
Instead, American wants to make work rules more favorable for managers and rewrite language in labor contracts. Consultants say pilot cooperation remains essential for any restructuring to succeed.
"Never ask for a small giveback," industry consultant and academic Darryl Jenkins of the Aviation Institute at George Washington University told The Dallas Morning News in Tuesday's editions. "It's so difficult that if you're going to do it, you might as well ask for a lot."
The Allied Pilots Association, the most powerful of the three major labor groups, has been in on-and-off contract talks with American since last year. But two members of the union's negotiating committee unexpectedly resigned last week.
The APA board of directors meets Tuesday to elect replacements to the negotiating committee.
Associated Press
DALLAS - American Airlines Inc., which is borrowing money to make payroll, needs to cut additional costs and is turning to labor unions, the carrier's chief executive says.
With American losing several million dollars a day, CEO Donald Carty says managers need faster cooperation from unions representing airline employees to get out of the cash crunch.
The world's largest carrier, which says it has already cut $2 billion a year in structural costs, wants to extract another $2 billion in labor-related savings to reach its $4 billion annual goal.
Fort Worth-based American last August announced 7,000 layoffs and the mothballing of jets. In December, the airline announced it limit flight attendant layoffs to 400 by allowing almost 500 workers to take unpaid leave and letting others share jobs in an agreement reached with a union.
The airline's Securities and Exchange Commission filings show it has $2.8 billion in cash and liquid assets. Analysts say parent AMR Corp. is in no immediate danger of bankruptcy. Carty has said American doesn't plan to go down the road of United, the world's second-biggest airline, which has filed for Chapter 11 bankruptcy protection.
Instead, American wants to make work rules more favorable for managers and rewrite language in labor contracts. Consultants say pilot cooperation remains essential for any restructuring to succeed.
"Never ask for a small giveback," industry consultant and academic Darryl Jenkins of the Aviation Institute at George Washington University told The Dallas Morning News in Tuesday's editions. "It's so difficult that if you're going to do it, you might as well ask for a lot."
The Allied Pilots Association, the most powerful of the three major labor groups, has been in on-and-off contract talks with American since last year. But two members of the union's negotiating committee unexpectedly resigned last week.
The APA board of directors meets Tuesday to elect replacements to the negotiating committee.
52 AM AA191 wrote: 
47 PM eolesen wrote: 
