American Airlines To Reduce July Flying
DALLAS (AP) – American Airlines says it will reduce flights in July partly because of a shortage of pilots due to more of them calling in sick.
The 1 percent reduction in July’s schedule follows a 1.5 percent cutback in June, which was also blamed partly on higher usage of sick leave by pilots.
A union spokesman said Wednesday that pilots could be taking care of elective procedures before American raises their premiums and co-payments.
Meanwhile, American was also expected to announce Wednesday the next step in its plan to eliminate 1,400 management and support jobs by late summer. The company has previously announced the elimination of several senior executive jobs, and several top officials have retired.
American, the nation’s third-largest airline, and parent AMR Corp. filed for bankruptcy protection in November after losing more than $10 billion over the previous decade. The company blames high fuel and labor costs.
The airline can’t do much about fuel prices, but it is asking a federal bankruptcy judge in New York for permission to break labor contracts so that it can eliminate thousands of jobs and reduce benefits for its roughly 55,000 union workers. The judge is expected to rule June 22.
AMR hopes to cut labor costs by $1.25 billion a year. Much of the savings would come from eliminating nearly 12,000 union jobs. American has about 73,000 employees.
Even without layoffs, American could be facing a shortage of pilots during the busy summer vacation-travel season. A company spokesman said July flights were being reduced for several reasons, including an increase in pilots calling in sick.
The spokesman, Bruce Hicks, said that by reducing scheduled flights, American “will ensure we provide our customers with reliable service while minimizing any impact to their travel plans.”
Gregg Overman, a spokesman for the Allied Pilots Association, said the union doesn’t track use of sick leave by its members, but he said any increase might be related to American’s proposal during its bankruptcy process to make employees pay more for health care.
“Some pilots who postponed elective surgery might be going ahead before their co-payments go up and their premiums go up,” Overman said.
The airline also saw an increase in pilot retirements last month — 57 pilots turned in retirement papers in May compared with 15 the month before, according to the union. That could be tied to the stock market’s slump in May.
A clause in their retirement plan lets American Airlines pilots lock in the value of some of their investments going back for 60 to 90 days — in this case, to a time before the market’s May slump.
One stock that rallied in May was US Airways Group Inc. The nation’s fifth-biggest airline wants to buy AMR out of bankruptcy, although it has not made an offer yet. US Airways executives say a combination with American would create a larger airline that could compete effectively with United and Delta, the world’s two biggest carriers.
American’s unions have thrown their support to US Airways, which promises to eliminate fewer jobs than American has proposed.
AMR, which had steadfastly said it wouldn’t consider potential mergers while in bankruptcy, backtracked last month to say that it would work with creditors to consider all possibilities.
(© Copyright 2012 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)
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