Flight Attendants Threaten To Send AMR Into Bankruptcy

They're still mad as hell, saying they won't take it anymore. Flight attendants for the biggest airline in the world say they'll scrap a hard-fought wage and benefit concession package, threatening to send American into Chapter 11.

As ANN reported Thursday, and again Saturday, American's top three unions are still outraged over the airline's disclosure that top managers would benefit from a secret pension plan designed after September 11, 2001, to protect their earnings in case of bankruptcy. The top six executives, including CEO Don Carty, were also to receive retention bonuses worth twice their annual salaries if they stayed on board the ailing airline through 2005. The disclosure came just a day after the flight attendants, on a second vote, narrowly passed the wage and benefit cuts demanded by American in hopes it could stave off bankruptcy.

Carty apologized for "misleading" the unions and American rescinded the bonuses. But the airline has refused to do away with the supplemental pension program. The unions are all but frothing at the mouth. One flight attendant told the Associated Press, "American's in the same class as Enron and WorldCom. How well can he lead? There's no credibility." Indeed, the Allied Pilots Association (APA) is now demanding an investigation of AMR Corp. management by the Securities and Exchange Commission and the board of directors.
"The Donald, that's what we call him, made all kinds of promises, and has broken every single one,"another flight attendant was quoted as saying. "We were absolutely duped."

Third Time's A Charm?

Now, it appears that the Association of Professional Flight Attendants (APFA) will vote yet a third time on the concession package. "We will proceed to expeditiously commence a reballoting of the membership," wrote John Ward, APFA president in a letter to CEO Carty. But flight attendants in St. Louis (MO), who became American employees when the airline merged with TWA, say no second ballot is needed. Sherry Cooper, who represents the St. Louis-based flight attendants, told the St. Louis Post Dispatch Saturday that APFA leaders should have stuck to the membership's initial "no" vote. Instead, she said, the union caved in to company pressure for a second vote.

"The second vote should not have happened,'' Cooper said. ``If (union leaders) had honored the first vote count, we wouldn't be in this mess. When you start playing around with the rules of the game, things get messy."

More than 1800 American flight attendants are based in St. Louis. Since they lost seniority to American flight attendants during the merger, they'll be the first to go in layoffs proposed by the airline under the concession package that would total approximately $10 billion over six years.

FMI: www.apfa.org, www.alliedpilots.org, www.twu.com, www.aa.com