In April of 2003, the pilots of American Airlines ratified a concessionary contract with the goal of keeping our company out of bankruptcy.
AMR's position in 2003 was partially the result of the collapse of the airline industry in the wake of 9/11. However, a series of disastrous decisions by AMR management- from ill-advised purchases and attempted purchases of other carriers to poor marketing decisions to expensive stock buy-backs- exacerbated our company's financial woes.
The pilots of American Airlines stepped up and saved the AMR corporation from impending financial disaster with a series of massive concessions. This contract provided the AMR corporation with an estimated $1 billion in annual savings in the areas of pay, productivity, and benefits. Some pilots suffered pay cuts as severe as 50%- all American pilots, who had not enjoyed a pay raise since 2000, suffered tremendous personal and financial hardship.
At the time the contract was ratified, the pilots were assured that they would share in any future successes of the company that they preserved.
Within a year of the 2003 crisis, AMR was on improved financial footing. Within two years the company began to focus on paying down debt, restoring the balance sheet, and building a large cash cushion.
Management pay was restored to pre-2003 levels by late 2004 and bonus plans took effect.
As AMR became profitable in 2006, the top 1000 managers began to receive bonuses that would total over 250 million dollars by April of 2007, with the majority going to the top 50 managers. In 2006, the top 5 AMR managers received $33.9 million in compensation, 29% more than the next highest management team in the industry. At the same time, the pilots have not shared in the recovery of our airline as promised.
The pilots of American Airlines as represented by the Allied Pilots Association are presently in contract negotiations with AMR. The APA has set a goal of recovering the investment made in 2003, with a focus on the following areas:
- Hourly pay rates that restore lost purchasing power
- Recovery and improvement of work rules
- Preservation and enhancement of retirement benefits
- Variable compensation that provides a true stake in future success
To date, the AMR corporation seems unwilling to entertain any proposals that do not constitute further concessions.
The APA Negotiations Web site will provide factual information related the the ongoing negotiations, updates on the status of the negotiations via email, and a point of contact for additional questions.
Thank you for your interest in the contract negotiations between APA and AMR.