Our restructuring goal with the 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 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 (effective Sept. 12)
Overview of Premium Service Plan
- Increase Level 84 pay by an additional 3% in January 2013, increasing max hourly rate to $19.50
- Provide a structural increase of 2.1% in January of each year for the following five years – 2014-2018
- Close MCI and IAD Clubs
- Create a Level 85 Premium Services Concierge Representative position with expanded duties in all domestic Premium Services locations
- Retain the Level 84 Premium Services Representative position with restructured duties/job responsibilities in various locations
- Increase max hourly rate to $19.12
- Allow access only to the Core medical plan, paying same rate – for themselves and their families – as full-time employees
- Eliminate the Level 86 Guest Relations position
- By reshaping our department and closing two clubs, we meet our savings target and better align Premium Services functions with the needs of the network and our premium custumers.