Ever since May, when American Airlines announced its capacity reduction plans, the specter of furloughs has been looming on the horizon. Earlier this month, American announced that it would cut 900 flight attendants from its workforce in the fall. Now it's the pilots' turn. According to the Allied Pilots Association (APA), the union representing American Airlines pilots, the airline is seeking to eliminate 200 pilot jobs.A hotline message on the APA website informed the pilot membership yesterday of the possibility of up to 200 pilot furloughs starting in October 2008. American Airlines management indicated to the pilots' union that they would be sending a Worker Adjustment and Retraining Notification (WARN) letter to APA by July 31.
Management has presented the pilots' union with a proposal for what they labeled a “Furlough Mitigation Severance Program,” or FMSP, which the union leadership is now studying. Under the terms of the FMSP, pilots would receive a severance incentive equal to the amount of furlough pay a pilot would receive, to a maximum of four and a half months. Under the proposal, the “target number of furloughs” would be reduced one for one by pilots accepting the program.
The APA hotline message says:
The proposal calls for a total of 200 captains to be offered the severance incentive as follows: 40 B777 captains, 20 B767 captains, 60 A300 captains, 80 MD80 captains and no B737 captains. Management confirmed to our negotiators that those captains who accept the offer would waive the right to set their own retirement date and be terminated with no ability to lock in their B-Plan unit value.Under the terms of the proposal the pilots' monthly maximum would be increased up to 82 hours. In addition, it would enable management to increase the monthly maximum up to 95 hours "in the event the Company experiences greater than forecast attrition beyond the number of pilots who accept the FMSP."
In the hotline message to the American Airlines pilots, APA Communications Committee member Captain Kevin Cornwell wrote, "In light of the ongoing reliability problems our airline is experiencing, it’s clear that we continue to suffer from insufficient staffing. Although the prospect of pilot furloughs is not a complete surprise given the previously announced flight attendant furloughs, it’s difficult to understand the logic behind any pilot furloughs from an operational standpoint. It would also be hard to make sense of the decision to recall pilots in June if management proceeds to furlough those same pilots again four months later."
APA negotiators are considering the details of the proposal in order to prepare their response.
Separately, AMR Corporation, the parent company of American Airlines, announced its second quarter results today, reporting a net loss of $1.4 billion. In the press release accompanying the quarterly earnings report, AMR gave details of its plans to reduce its fleet:
... AMR has decided to retire all 34 of its A300 aircraft by the end of 2009, compared to the previous retirement schedule that extended through 2012. In 2008, AMR will retire 30 MD-80s, 10 A300s and 26 Saab turbo-prop aircraft, and will retire or remove from service 37 regional jets. The remaining A300s will be retired in 2009, which is expected to result in capacity reductions next year. As it begins to replace its MD-80 fleet, the Company continues to expect to take delivery of 70 more-fuel-efficient Boeing 737-800 aircraft in 2009 and 2010.The company also said that it had "decided to place on hold its planned divestiture of American Eagle."
