Our restructuring goal with Agent, Representative and Planner (ARP) workgroup aligns with our overall employee strategy - to achieve the necessary financial savings by implementing sustainable, structural changes that will position our airline to compete and win.
The ARP workgroup was originally tasked with reducing annual employee costs by 20 percent, similar to our original proposal to all workgroups. However, to align with adjustments made to the APFA and TWU workgroups, that target was changed to 17 percent, or approximately $81 million, on July 2.
American’s ARP plan takes into account the feedback provided by more than 3,400 employees as part of our restructuring forums and other factors including: staffing based on American’s network and airports; productivity and workflow; customer service needs and how pay and benefits for this group compare to other airlines.
We believe that the changes outlined below are necessary to successfully restructure and position our company for future success and growth.
All Employee Restructuring Objective
- 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 (effective Sept. 12)
Overview of Airport/Cargo and Travel Center (CTO) Plan
- Increase Airport Agent pay by an additional 2% in January 2013, increasing max hourly rate to $22.30
- Provide a structural increase of 2.1% for Airport Agents in January of each year for the following five years – 2014-2018
- Outsource all Domestic Cargo Agent work
- Outsource all Sky Cap (Support Staff) Level 50/51
- Outsource all Passenger Services Representatives (PSRs) Level 40
- Outsource some Airport Agent job functions, including:
- Outsource Agent work in the following U.S. cities: BDL, CMH, MEM, ONT, PDX, RNO, SMF
- Outsource Agent work in the following Canada cities: YYC, YVR
- Eliminate a number of the Operational Coordinator positions (excluding Tier 5 cities)
- Compliance Coordinators will move to a new job category (within the Customer Service workgroup) for the purposes of the RIF policy; as a result, Compliance Coordinators will be laid off separately from Airport Agents during a reduction in force
- Compliance Coordinators will be provided a one-time opportunity to return to their previous Airport Agent position (provided they held an Airport Agent immediately prior to the Compliance Coordinator position)
- Outsourcing key functions and areas allows us to run an operation with a cost structure better aligned with the industry as a whole, while still preserving most positions and limiting the impact on pay.