From the Fort Worth Star-Telegram. Fair use excerpts follow.
Airline, pilots swap offers
By TREBOR BANSTETTER
STAR-TELEGRAM STAFF WRITER
American Airlines pilots and executives swapped proposals for a new contract Wednesday, with pilots seeking to regain wages and benefits lost in 2003 and management looking to cut labor costs and boost productivity.
The proposals from both sides were short on specifics, but it was clear that negotiators have their work cut out for them. The two sides conflicted in several areas: for example, pilots expressed the desire to keep their pension plan intact, while management suggested reducing costs with a market-based retirement plan, such as a 401(k).
The management proposal marked the first time that American executives have publicly explored the idea of replacing an employee pension with a market-based plan. Over the past several years, American has lobbied Congress for pension reforms out of a desire to keep its retirement plans intact.
Congress passed a pensions bill this year, but pensions are still a major financial drain on American, while rivals like Delta Air Lines and United Airlines have cut costs by slashing pensions and replacing them with 401(k) plans.
"We recognize that work at the negotiations table has inherent conflicts and disagreements," Mark Burdette, American's vice president of employee relations, said in a letter to Ralph Hunter, the union president.
American's goal is "to improve productivity and enhance our competitive position so that we can grow responsibly in a way that benefits our pilots and other stakeholders."
The union seized on American's increasingly strong results. The company has returned to profitability on strong travel demand and cost cuts since employees gave up concessions to keep the company out of bankruptcy.
"The time has come to provide our pilots with a return on their investment in the airline," Hunter said in a prepared statement. The union's "proposal is designed to recognize the sacrifices our pilots made to keep the company solvent in 2003."
Across-the-board pay raises
Enhanced medical, vacation and sick benefits
More pilot control of scheduling
Preservation of pension benefits
Protection from layoffs
Competitive labor costs
Pilots flying more hours
Compensation based on company and pilot performance
Possible replacement of pension and medical plans with cheaper, market-based plans
As a point of information, the contract is not amendable until 2008.