American Defends Smaller Cutbacks For Management
If it can be said anyone is going to make out
better than the average bear in the severe cutbacks looming for
American Airlines, it appears to be management. Now, company
executives are defending job and salary cuts for executives that
are much less severe than those faced by pilots, flight attendants
Comparing The Numbers
- Management: AA plans to cut about $100 million
from management costs by eliminating 5 percent of the 12,000 jobs
and trimming salaries by between four and 15 percent.
- Pilots: Pilot compensation would drop 23
percent on May 1.
- Flight Attendants: 15.6 percent wage
- Mechanics: Wages of mechanics would be slashed
- Baggage Handlers: 15.6 percent wage
Management: We've Already Taken Big Hits
spokesman defended the more-modest cuts for management employees,
noting that they have gone without raises and bonuses for the past
Pay for American's management employees lagged industry averages
while the company's flight attendants and ground workers have been
at the top of industry pay scales and pilots have been near the
top, said spokesman Bruce Hicks.
"We have always kept at the industry average, very lean and very
efficient ... but this puts management even further below average,"
Hicks said Thursday.
The Fort Worth-based airline has already reduced management by
22 percent since the Sept. 2001 terrorist attacks, he said.
The first $30,000 of their salaries will be reduced by 4
percent, the next $30,000 by 7 percent, the next $30,000 by 10
percent and for amounts over $90,000, 13.5 percent. Chairman Donald
J. Carty said this week he would take a 33 percent cut from his
$585,813 salary, and officers' pay would be cut 17 percent.
American and its three major unions reached tentative agreements
Monday on deals to cut more than $1.6 billion in annual labor
costs, the bulk of an estimated $1.8 billion reduction in overall
labor spending. Airline officials said they would have to file for
bankruptcy without the deals.
Union officials defended the deals, warning of even deeper pay
cuts and more layoffs if American went into bankruptcy.
Under the tentative agreements, about 2,500 pilots, 2,400 flight
attendants and 1,100 to 1,400 ground workers likely will lose their
jobs. Remaining employees will work longer hours and get less
The deals call for $660 million in cuts from pilots, $620
million from ground workers and $340 from flight attendants.
Union employees have until mid-April to approve the plans, which
also would give workers stock options worth a 24.3 percent equity
stake in the airline, plus profit sharing once the company reaches
A group called Pilots Defending the Profession has started an
organized campaign against the deal, saying it might not keep
American out of bankruptcy.
The group said in a Web site posting Thursday that the pilots
union gave up too much without getting partial ownership of
American or seats on its board of directors.
As devastating as the cuts are, the airline has said it would
lay off a total of 3,900 flight attendants - 1,500 more than what
is proposed in the concessions plan - if it files for bankruptcy,
said Association of Professional Flight Attendants spokesman George
In that case, the company has said it would use Latin American
flight attendants who are paid much less than their U.S.
counterparts, Price said.
"That means we could lose American jobs to foreign nationals,"