AMR Corp's American Airlines, the world's biggest carrier, will reduce pilot pay by 23 percent and cut 2,500 jobs under an agreement with union leaders to help avoid bankruptcy.
The plan, which must be approved by Allied Pilots Association members, would also allow more use of smaller jets at AMR's American Eagle, increase by up to eight hours the maximum pilots can fly each month, change the way sick leave and vacations are calculated and reduce insurance benefits, according to a union letter sent to members and obtained by Bloomberg News.
The pilots were the last of American's main unions to approve concessions that provided US$1.8 billion the company said it needed to help avoid bankruptcy. Agreements were reached earlier Monday with the Transport Workers Union and Association of Professional Flight Attendants. Union leaders for the pilots agreed to provide US$660 million in savings, the most of any employee group.
"The reaction has been more than negative, it's been anger," said Sam Mayer, a pilots union board member. "But will that anger carry through to a vote in two weeks? I don't know."
American has about 13,500 pilots, including 1,078 who already have been fired. The final number of job cuts under the plan will change based on retirements, the union said.
"If we did not agree to these concessions, it became quite obvious to the leadership that a bankruptcy judge would dictate the terms to us, and the cuts would be even deeper," pilots union President John Darrah said in the letter.
The six-year agreement with pilots would reduce pay by a smaller amount in each subsequent year.
"There is a good chance they'll be able to avoid Chapter 11," Jon Ash, managing director of Global Aviation Associates, said in an interview with Bloomberg Radio yesterday.
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