TWU

American Airlines and the TWU-represented Fleet Service Clerk 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 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 or relying on outsourcing
• 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 Fleet Service Implementation Schedule

• Annual, Permanent Cost Savings: 17 percent of Fleet Service Clerks' total costs
• Provides pay increases throughout the life of the agreement
• Reduces workforce by approximately 2,900 positions, with scope changes preserving approximately 1,300 jobs that would have been outsourced in the original term sheet
• Outsources certain Fleet Service Clerk functions, including dayline cabin cleaning, fueling, bus driving and mail handling at all stations (effective Sept.-Dec. 2012)
• Outsources cargo handling at all non-cornerstone stations (effective Oct.-Dec. 2012)
• Outsources station staffing at airports with fewer than 15 departures/day (effective Oct.-Nov. 2012)
• Reduces max vacation of 30 days by one week (employees will have 25 vacation days to take in 2013)
• Eliminates system and station protection (effective Sept. 12)
• Eliminates the ASM Cap (effective Sept. 12)
• Offers an Early-Out incentive

Rationale

• Our goal was to make fundamental changes to the Airport Services operation necessary for a long-term sustainable cost structure.
• Outsourcing work where it can be done cost effectively allows us to focus our resources on our largest and most important markets.
• 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.