| Dear American Team,
We today received word that Judge Sean Lane will delay ruling on American’s Section 1113 motion for all union groups for one week, until Friday, June 29. Earlier today, in an effort to secure more time for the Allied Pilots Association to review the company’s final proposal, the company supported the union’s request for a one week delay in the ruling.
We know this process can be confusing and there are many questions. This week we were hopeful we could reach agreement with the pilots union on a proposal that went far to balance pilot needs with contractual changes necessary to our restructuring. As you may know, the APA Board of Directors announced yesterday it would not yet put that proposal out for the pilots to vote – a disappointing development but one we believe can be addressed by allowing the union additional time to review our proposal.
The APA proposal represented hard work and compromise on the part of both parties, producing competitive terms that provide significant benefits for pilots. The proposed six-year contract allows us to improve productivity and network flexibility, while providing pilots with pay increases, furlough protection, profit sharing and seeking a freeze of the pension instead of termination. As we have asked of all people, pilots will take on a greater share of their health benefit costs so that we can continue to offer comprehensive health coverage.
When we started the process of restructuring, we had a significant amount of ground to make up. We had fallen far behind our industry peers in many areas. The competitive landscape had changed and we needed to adapt – quickly.
Throughout negotiations, our focus has been on reaching consensual agreements that allow us to succeed and win. It was that focus, and the additional benefit of our recent revenue improvements, that allowed us to put forward a proposal to APA that adjusts the savings target while still achieving the goals of our business plan. The proposal produces cost savings of 17 percent as compared to our initial target of 20 percent.
Given the adjustment to the savings target for pilots, we’ll be meeting with the five TWU-represented groups with whom we now have ratified agreements to make comparable improvements for them. We will also adjust the needed savings for our independent employees, in order to ensure they are treated fairly and equitably. Our goal continues to be to reach consensual agreements with APFA and the remaining TWU groups.
We are on a path that is the right one for American Airlines. The process remains challenging, but there are huge opportunities ahead as we reach agreements with all of our represented workgroups and begin focusing our collective efforts on creating a profitable, successful new American.
Thank you for your continued focus and dedication as we work through this process.
Sincerely,
Denise
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