American Airlines and the TWU-represented Dispatch workgroup reached a consensual agreement on May 15. This ratification is an important step forward and provides American with the cost savings necessary to be successful, while providing to employees a variable compensation plan for industry-leading performance, an Early-Out incentive to mitigate involuntary layoffs, future pay increases and a profit sharing plan.
This compromise demonstrates American’s commitment to its people and the negotiations process, and also shows the TWU’s efforts to collaborate in order to move forward and refocus our energy on building the new American.
Now we can begin implementing the changes that will allow us to operate a more efficient, competitive airline.
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 Dispatch Implementation Schedule
- Annual, Permanent Cost Savings: 17 percent of Dispatchers' total costs
- Establishes a work cycle of up to 219 days per year, with the requirement that an employee will bid annually, by seniority, one 30-day pattern in which they may be scheduled an additional 6 days as ready reserve (effective Sept. 12)
- Reduces workforce by approximately 8 positions
- Offers an early-out incentive to mitigate involuntary furloughs
- Incorporates the Performance-Related Pay variable compensation program (effective Oct. 1)
- Eliminates the ASM cap (effective Sept. 12)
- Reduces one day of vacation at each accrual tier (effective Sept. 12)
- Eliminates job protections (effective Sept. 12)
- Our goal was to increase Dispatcher productivity, but to also offer pay for industry-leading performance by memorializing the variable compensation plan.
- Eliminating the ASM Cap from all TWU contracts gives American the ability to optimize its network and schedule. Removing the cap allows us to improve the use of our regional network by allowing mainline jets to be redeployed for new opportunities and to place smaller jets on lower demand flights.