American Airlines Cost Cutting Measures Begin
FORT WORTH (CBS 11 News) - American Airlines sent a letter to employees Wednesday night, laying out the first changes for their employment as the company began the cost cutting needed to keep the bankrupt air carrier in the air.
Pension plans will be frozen November 1, and replaced with a matching dollar savings plan. Retiree medical plans will also change November 1. The letter from company vice president Denise Lynn said some of the most difficult changes, to airport, maintenance and cargo operations would be relayed through union leadership. One union leader told CBS11 those changes would be revealed Friday.
A federal judge earlier in the day approved new contracts with the union representing the flight attendants and maintenance workers. That allowed American to start implementing the cost cutting measures in the new deals.
"Now the painful process, the surgical removal of jobs that we have lost in bankruptcy, that starts now," said Darrin Pierce, president of the Transport Workers Union Local 513.
Pierce said many employees though, tired of the 10-month struggle through bankruptcy, were ready for the changes to come.
American confirmed reports from earlier in the week that its maintenance base at Alliance Airport in North Fort Worth would close by the end of the year.
The closure schedule shows that some of that work, specifically on the 767 and 777 jets will eventually be outsourced internationally. American would then join every other major airline is having some of its maintenance work done out of the country.
American said forced layoffs though will be substantially less than originally expected. Employees have been able to take advantage of Early Out offers.
Pierce said those who know they will remain with the company, do have some hope that things could get better.
"We can look back and say you know what, it was painful, but man we're doing good now," he said. "That's what we want."
American also announced a deal Wednesday with SkyWest Airlines. The Utah carrier will operate 23 50-passenger jets for American out of DFW and Los Angeles, taking over routes for American Eagle. The deal is in keeping with Americans plan to fly to more destinations, but keep its own staff costs low. The four-year deal begins November 15. As a result, the American Connection brand will be phased out. A letter from the American Eagle CEO said that brand name would also likely be changing within a few months.
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