Next for American Airlines: Flight attendants’ contract offer vote ends Sunday
By SHERYL JEAN
Staff Writer
sjean@dallasnews.com
Published: 16 August 2012 09:27 PM
It’s no secret that Laura Glading, president of the union representing flight attendants at American Airlines Inc., plans to vote yes on the carrier’s last contract proposal.
“The flight attendants know that,” she said after speaking to about 150 of them Thursday at an informational meeting held by the Association of Professional Flight Attendants at Dallas/Fort Worth International Airport. Flight attendants vote through Sunday morning on American’s “last, best and final” contract offer.
If flight attendants reject the offer, U.S. Bankruptcy Judge Sean Lane could let American throw out its existing contract and impose new terms — the same issue that American and its pilots are going through.
Lane on Wednesday denied American’s request to toss out its contract with pilots, a week after they rejected a tentative agreement with the airline.
Glading called the ruling a “scathing” decision for labor. While Lane said the carrier’s proposals for unlimited furloughs and changes to its flight codesharing were too aggressive, he agreed with virtually all of the airline’s other arguments for its business plan and is letting it revise and resubmit its request.
“At first we — and others — saw it as a denial, but when you got down to the nitty-gritty in the 111 pages [of the ruling], there was no win for labor here,” APFA spokeswoman Leslie Mayo said. “It was aligned with every other bankruptcy in the airline industry.”
Faced with a similar prospect, the APFA is making a last-minute attempt to clarify issues for the more than 16,000 flight attendants at American it represents. “This is a crystal ball we’ve been handed,” Mayo said.
American and its parent, AMR Corp., filed for Chapter 11 bankruptcy in November and are trying to reduce labor costs as part of their reorganization. The companies say they need about $1 billion in annual labor savings, including $842 million from its unions, to be competitive.
Pilots’ status
American on Thursday presented the Allied Pilots Association with revised proposals on codesharing and furloughs. The airline plans to file its revised request to toss its pilots’ contract under Section 1113 of the bankruptcy code on Friday.
The airline has not attempted to restart negotiations, American spokesman Bruce Hicks said Thursday. “We’re moving forward with the 1113 process at this point … so we can get the cost certainty that we need,” Hicks said.
American’s unsecured creditors’ committee said in a statement that it supports the carrier’s plans and expects its revised proposal will be “sustained” by the bankruptcy court.
“Our only hesitation is that in bankruptcy court, it’s not always that easy to turn around a filing of such a contentious nature,” Michael Derchin, an airline analyst for CRT Capital Group in Stamford, Conn., wrote Thursday in a research note. “Delay seems inevitable.”
In a letter to members on Thursday, the APFA made it clear that Lane’s decision regarding the pilots’ contract was based on two specific arguments — unlimited codesharing capabilities and unlimited furloughs — that are unique to the pilots’ group.
Most of the other arguments that were rejected were identical to the flight attendants’ arguments, the APFA said.
In the APA’s case, Lane was not persuaded by the union’s arguments on two issues that were also raised by the flight attendants — convergence (a proposal that would put workers below standard industry wages) and a union request for certain information from the airline.
“Given the fact that most of our arguments have already been dismissed in this ruling … we do not expect the court’s 1113 ruling to go in our favor should we vote to reject the [contract offer],” the APFA said.
“If the flight attendants vote ‘yes,’ we can accomplish a lot more,” Glading said. “If no, the fight continues but it will be a distraction to manage furloughs and other things.”
She was referring to American’s ability to furlough up to 2,300 flight attendants if the tentative offer is rejected and Lane allows the airline to abrogate its existing contract. If both happen, American could impose the tougher terms for flight attendants that it outlined on March 22.
Examining the offer
American hopes flight attendants “take a very careful look at the issue before them,” Hicks said.
“We believe the last, best and final offer that they’re voting on is the right thing in that it provides a number of things for the flight attendants that would not be there in the March 22 term sheet, including the early-out option that would save the jobs for several thousand people, the signing bonus, the raises, the equity claim,” he said.
Tina Krugler, a 26-year flight attendant in North Texas, said she voted for the contract.
“I voted yes mainly because of the early-out option, which I really feel will save a lot of jobs,” Krugler said. “It’s the lesser of two evils.”
Co-worker Jay Narey said he’ll vote no mainly because “I don’t want to give the company a ratified agreement while it’s still in the exclusivity period” to file a plan of reorganization by Dec. 28.
Glading said the APFA’s goal has not changed.
“The goal is to merge with US Airways and protect our rights,” she said. “I believe the way to do that is to vote yes on the last, best and final offer. Some people want to amplify the pilots’ message to management with a no vote.”
American is reviewing its strategic options, including a possible deal with US Airways, as part of its bankruptcy restructuring. In April, leaders of American’s three unions announced that they supported a merger with US Airways.
American spokesman Andrew Backover said Monday that the company plans to finish that review by or in the fall.
“Ideally, in my opinion, the merger partners should work something out in bankruptcy,” said Vaughn Cordle, managing partner of Airline Forecasts in Washington, D.C. “There’s more value to be shared by stakeholders in bankruptcy.”
