Business

AA flight attendants to vote on contract proposal

Sunday, July 22, 2012    

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DALLAS (AP) — The flight attendants' union at American Airlines said Friday that it would send the troubled company's latest contract offer to its members for a ratification vote.

The Association of Professional Flight Attendants declined to call it a tentative agreement and didn't indicate whether the union's executive committee endorsed the offer.

The proposal was better than one that American offered in February after filing for bankruptcy. That was before American's three unions signed provisional contracts with US Airways, which is pressuring American for a merger.

American's new offer would give attendants cumulative pay raises of 9.9 per cent over six years — very close to US Airways' offer — and signing bonuses of US$1,500 each, but less profit-sharing than American had first proposed.

US Airways promised no layoffs among flight attendants. American is sticking with its plan to eliminate 2,300 attendant jobs but will soften the blow by offering up to US$40,000 to longtime workers who quit — an idea that the union advocated to reduce potential layoffs. American would decide the number of buyouts.

The offer includes a promise to support giving the flight attendants a 3 per cent stake in the company after it emerges from bankruptcy protection. Pilots are voting on an offer that would give them a 13.5 per cent stake. The company's creditors would be asked to support the requests.

Flight attendants' union President Laura Glading said the offer was far from the agreement that union negotiators had wanted. But she said it "represents the absolute best terms our negotiating team was able to achieve during (bankruptcy) negotiations."

American and parent AMR Corp. have used special rules in the bankruptcy process to negotiate cost-cutting deals with unions. Pilots and mechanics will vote soon on company offers.

If any of the unions reject the offers, a US bankruptcy judge could rule by mid-August whether American can impose pay and working terms on employees. Groups representing more than 10,000 American Airlines ground workers have ratified concessions.

Company spokesman Bruce Hicks said the proposal to flight attendants "will help build a new American that can compete and win." He said AMR was "eager to move forward to the next phase of our restructuring."

AMR, which also owns the American Eagle regional airline, is trying to cut annual costs by US$2 billion, with about half coming from labor. The company has lost more than US$10 billion since 2001. On Wednesday, it reported a second-quarter loss of US$241 million but said it would have earned US$95 million excluding costs related to its turnaround work under bankruptcy protection.

The unions support a potential takeover of American by US Airways Group Inc., and have signed provisional contracts that would take effect if there is a merger while AMR is still in bankruptcy court.

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