American receives court approval on contracts for flight attendants and mechanics

American Airlines has received court approval for its new labor agreements with its flight attendants and mechanics.

The deals, which were ratified by the Association of Professional Flight Attendants and the Transport Workers Union last month, include pay raises and work rule changes that cut costs for the Fort Worth-based carrier. It also includes the outsourcing of some American’s maintenance work which will lead the shuttering of its Alliance maintenance facility in Fort Worth.

The restructuring process is moving along for American Airlines. Photo by Andrew Morrell.

“With the court’s approval, we will now begin to put in place the new contracts we reached through consensual agreements with the APFA and TWU,” American chief executive Tom Horton told employees in a letter on Wednesday afternoon. “We have made great progress reducing debt and renegotiating leases and contracts, and now these new agreements — combined with the changes across the rest of our team — will make a huge difference in making us more competitive.”

Keep reading for the full letter from Horton.

September 12, 2012

Dear American team:

As we continue to accelerate our momentum, we are entering the next important phase of our journey back to industry leadership.

With the court’s approval, we will now begin to put in place the new contracts we reached through consensual agreements with the APFA and TWU. You will hear more from Denise on exactly how this will be phased in, but it is clear while these are not easy steps, they are necessary to build a new American equipped to compete with the best the world has to offer.

Our competitors used the restructuring process to completely reshape their operations. They got better and stronger, growing revenues and lowering costs across the board. We have made great progress reducing debt and renegotiating leases and contracts, and now these new agreements — combined with the changes across the rest of our team — will make a huge difference in making us more competitive.

We are committed to continuing to work with the APA to explore paths to a consensual deal that addresses our pilots’ priorities within the economic parameters outlined by the creditors committee, while beginning to put in place changes that are necessary for our restructuring. We all respect and appreciate what our pilots do each day and hope to achieve an agreement that will fortify our competitive position and create more security and opportunity for pilots and for all of our people.

We all want to be part of an airline that makes us proud. With the financial flexibility we gain from the efforts of the past ten months, we are accelerating investments in the innovation that has defined American. New aircraft, great new products and technology, and better services will allow us to deliver a customer experience consistent with the professionalism and commitment of our people.

We are already seeing results from our efforts, as our August revenue results released yesterday show a continuing trend of many months of American’s revenue increases topping the industry. This is unprecedented in an airline restructuring.

However, being competitive is about much more than revenues and costs. It is about the spirit and commitment you bring to this great company every day. It is my hope that as we all begin to remember what it feels like to win, we can find in that a renewed sense of possibility and common ground to build a better future together. I know this is possible from the many thoughtful and constructive conversations with folks during my travels around the company, and I believe there is a growing sense of confidence in what the new American will be. I also understand that there are many different views and feelings about the past, and I hope that over the coming weeks, months and years, we can forge a new basis for mutual respect and trust, and a new beginning.

As you know, our formal process of examining strategic alternatives is underway. Whatever path we decide to pursue, one thing is clear: the people of American are doing the hard work of rebuilding this airline to regain its position as a fierce global competitor. There is plenty more work ahead, but with your professionalism and commitment, I’m confident in the future of the new American.

Thanks for all you do!

Sincerely,

Tom

(c)2012 the Fort Worth Star-Telegram. Distributed by MCT Information Services.