AgentS/Reps/Planners

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 Reservations Plan

• Increase pay by an additional 2% in January 2013, increasing max hourly rate as follows:

  • Tier 1: $16.00

  • Tier 2: $19.00

  • Tier 3: $21.97
• Provide a structural increase of 2.1% in January of each year for the following five years – 2014-2018

• Close the Southwestern Reservations Office (SWRO)

• Move all Tier 1 Reservations Work to Home-Based

  • Increase max hourly rate to $15.68

  • Add one week of paid vacation

  • Reinstate holiday pay at 1.5x for  HBRs who work on a designated holidays

  • Allow access only to the Core medical plan, paying same rate – for themselves and their families – as full-time employees

• Maintain Tier 2 Office-Based Representatives

• Maintain Tier 2 Home-Based Representatives

  • Increase max hourly rate to $18.61

  • Add one week of paid vacation

  • Reinstate holiday pay at 1.5x for  HBRs who work on a designated holidays

  • Allow access only to the Core medical plan, paying same rate – for themselves and their families – as full-time employees

• Maintain Tier 3 Office-Based Representatives with no change in pay

• Discontinue non-traditional OBR part-time positions – Reduced Work Week Representatives (RWR) Part-time Non-Extendible (PTNE) and Traditional Part-Time Operational (PTO) Positions

Rationale

• The closure of SWRO and fundamental changes to the Reservations workgroup help us meet our savings goal, keep Reservations work “in house” and maintain competitive pay rates.