20120710 – MR Tentative Agreement Presentation Final – Rev 2
July 10, 2012 Tentative Agreement
How we got here American Airlines entered in to bankruptcy on November 29, 2011
- Each major employee group union and non-union were required to make cost cuts that would equate to $1.25 billion annually.
- The five major groups were each targeted to be responsible for 20% of the $1.25 billion. M&R was responsible for $209.9 million. Because of the recent APA T/A, the M&R ‘ask’ has been reduced 15%. This, along with changes in the profit-sharing plan has reduced the M&R ‘ask’ to $156.42 million.
- TWU M&R was hit especially hard with not only freezing the pensions and terminating the retiree medical plans but also an increase in aircraft maintenance outsourcing in M&R from ~10% of total maintenance spend to 35% of total maintenance spend along with outsourcing various Title II work.Under the very restrictive conditions of bankruptcy, the TWU has worked diligently to come up with an alternative to the 3/22 Term Sheet. The July 10, 2012 M&R Tentative Agreement captures improvements from the company’s last offer such as enhanced 401k, lower insurance premiums, 15% in wage increases, plus an automatic wage adjustment to industry comparators average after 36 months, a twenty four month early opener and it reduces the amount of outsourcing.