APA

On Dec. 7, American’s pilots ratified their tentative agreement, an important step forward in our restructuring.

 

Once we’ve received Court approval of this agreement, we will have new collective bargaining agreements with all of our unionized groups and have nearly completed the changes for our independent workgroups. This gives us the certainty we need to continue creating a world-class airline.

 

Like our agreements and restructuring plans for our other employee groups, this agreement represents a 17 percent cost savings target for our pilots.

 

Once implemented, the changes will help American eliminate operational inefficiencies and barriers that constrain successful operations.

All Employee Restructuring Objectives

• Reduce employee costs
• Our approach to employee savings is focused on preserving base pay rates as much as possible by increasing productivity
• Implement universal changes to active and retiree medical for current employees (effective 2013 open enrollment)
• Remove and relax restrictions on our business
• Remove structural barriers that limit flexibility and ultimately growth
• Replace pension benefit with a Defined Contribution Benefit (effective Nov. 1)
• Implement new first-dollar profit sharing plan

 

Rationale

• We worked hard in concert with the APA to structure an agreement that addresses the priorities identified as most important to our pilots, while staying within the economic framework supported by the Unsecured Creditors’ Committee to ensure our successful restructuring.
• We focused our strategic cost-saving efforts on productivity in contract areas like scheduling, reserves and time away from work.
• Restrictive contract provisions like Scope have reduced our ability to compete with carriers that have more operational flexibility and larger networks. Limited changes to Scope will improve American’s ability to compete and will help better position the company for growth of the mainline.