American bankruptcy may bring more Chicago flights
February 1, 2012 (CHICAGO) (WLS) -- In a letter to employees, American Airlines CEO Tom Horton said the company had lost its competitive edge and needs 20-percent cuts across the board.
About 13,000 American Airlines workers could lose their jobs -- 2,300 flight attendants, 4,600 mechanics, 1,800 managers and 400 pilots. Retirees could also see a reduction in pension payments.
"This is an incredibly important day for American and our employees," said Bruce Hicks, American Airlines spokesman. "It's a very difficult day for all our employees, no doubt about it, from senior management to the newest employee."
"This whole thing is bad for Americans, certainly bad for America. We're gonna fight this," Jim Little, Transport Workers Union of America, said.
The restructuring reflects a shift in focus to larger hubs, including Chicago, where there could be an increase in traffic.
In a statement, Chicago Department Of Aviation Commissioner Rosemarie Andolino said, "We have been reassured by American that Chicago remains a key part of its long-term business strategy and that any immediate or long-term impacts will be very minimal for Chicago."
With that focus on major domestic and international routes, sister airline American Eagle could be cut substantially.
"American Eagle has been a millstone around their neck. It is the first time anyone has seen an eagle transformed into an albatross," Aaron J. Gellman, Northwestern Univ. Professor, said.
The restructuring plan was inevitable after American became the last of the major domestic airlines to seek bankruptcy protection. Similar moves enabled competitors like United to reduce debt, renegotiate labor contracts and freeze or end pensions.
"This is the company's opening position," said Jennifer Ewald, Allied Pilots Association. "We recognize that. We will negotiate with them from here going forward. Obviously, there are areas of the contract we're not happy with."
American also announced it would invest in new aircraft -- about $2 billion worth a year -- and boost departures in five key cities, including Chicago. Transportation experts say it could mean a potential merger, or other major developments soon.
"You don't make a move like this without thinking what comes next," said Professer Joe Schwieterman, DePaul University transportation expert. "American hasn't played its cards. It's ready apparently to make some big moves."
American and its unions face weeks of contentious negotiations. Ultimately they'll have to agree on a plan to present to the bankruptcy court. The two sides are very far apart -- especially on the issue of reducing retiree pensions.
"This isn't some greedy union situation. We stepped up to the plate ... And what do we get? a bunch of broken promises," said Sean Doyle, president of TWU Local 512.
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