logo
Share SHARE
FONT-SIZE Plus   Neg

American Airlines Urge Unions To Speed Up Labor Contract Talks

American Airlines, a part of bankrupt AMR Corp. (AAMRQ.PK), has asked unions to speed up negotiations to make major changes in contracts in order to achieve the $1.25 billion in labor cost savings. The company said it needs those changes "in a matter of weeks," "not months from now" to enable restructuring in the near term.

The company has asked the unions to take a "serious and deliberate approach to negotiations" and added that it does not have "the luxury of time."

"Our challenge is clear: work quickly to restructure our contracts, achieve the targeted cost savings and begin implementing the changes so we can emerge from restructuring in the near term, or remain on our current path and jeopardize our business plan and ultimate success," the company said in an update.

American Airlines also rejected proposals of two unions that the company offer voluntary early out incentives for workers, to reduce the 13,000 planned job cuts. American Airlines said that the early out "proposals represent a significant cost to the company and could not be accepted on their terms."

In late November 2011, Fort Worth, Texas-based AMR and some of its U.S. subsidiaries including American Airlines and American Eagle, filed for bankruptcy, citing mainly cost disadvantages. The company then revealed plans to cut 13,000 jobs in a bid to return to profitability.

CEO Tom Horton's cost pruning plan targets an annual financial improvement of over $3 billion by 2017, including $2 billion in cost savings and $1 billion in revenue enhancements.

Despite the 9/11 attacks and the recession, AMR was one of the few airlines that managed to avert bankruptcy, but had to grapple with losses while its rivals turned around to profit having addressed cost problems that includes hefty pension charges

Interestingly, rivals such as United Air Lines and Delta Air Lines Inc. (DAL) had also declared bankruptcy, but found its way out. Subsequently, Delta acquired Northwest Airlines in 2008, and United Air Lines and Continental Airlines merged in October 2010 creating the world's largest airline United Continental Holdings Inc. (UAL).

AAMRQ.PK is currently trading at $0.52, up 0.68%, on a volume of 0.8 million shares.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Editors Pick
Burger chain Shake Shack Inc. said late Thursday that it has priced its initial public offering of 5 million Class A shares at $21 per share, which is above the previously estimated price range of $17 to $19 per share. The shares are expected to begin trading on the New York Stock Exchange on Friday, January 30 under the ticker symbol "SHAK." Google reported a higher fourth-quarter profit, driven by a 15 percent increase in revenues and one-time gains from the sale of Motorola Mobile business, somewhat offset by stock-based compensation expense and foreign exchange losses. Quarterly earnings and revenue missed Wall Street estimates, as ad revenues came under pressure. Online retailer Amazon.com, Inc. said Thursday after the markets closed that its fourth quarter fell 10.5% from last year, as higher expenses more than offset a 15% increase in sales. However, the company's quarterly earnings per share came in well above analysts' expectation, but its quarterly sales fell short of analysts' forecast.
comments powered by Disqus
Follow RTT