When American Airlines parent AMR Corp. filed for Chapter 11 bankruptcy reorganization last month, the finger of blame was primarily pointed at the company’s workers.
The word from management and Wall Street, repeated in news reports, was that American’s problems were largely due to its well-paid, union-represented pilots, flight attendants and ground workers.
That came as no surprise to the employees.
“We’re used to hearing that. We’re like the beaten dog,” said Beth Smajstrla, a 27-year flight attendant.
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Yes, several longtime American employees concede in a series of recent interviews, the Fort Worth-based airline may have higher labor costs than its major competitors. But the employees said they aren’t the reason American is in bankruptcy, and that just cutting employees’ pay and pensions won’t solve the airline’s problems.
“It’s a far bigger problem than labor,” said Jim Poole, a 22-year veteran pilot, who wonders why what was once considered one of the world’s best airlines is no longer a leader.
“I fly to Africa on Delta. I get there, and there is United. Where is American?” Poole said. “I have to wonder where we are in the global picture.”
To a person, the employees interviewed for this report say American has suffered for years from weak leadership, poor choices and poorly timed decisions.
It wasn’t the unions, they say, that put off buying new, fuel-efficient jets. It wasn’t rank-and-file employees who made the moves that lost market share to competitors. It wasn’t the mechanics who ticked off the Federal Aviation Administration and caused it to ground hundreds of American’s planes for days on end because of improper wiring.
They say American’s management, under former chief executive Gerard Arpey, lacked a clear, coherent strategy and fostered a business culture that spent more time on nickel-and-dime tactics than on a broader vision of providing its customers with a consistently high-quality travel experience. They point to what they call a massive, entrenched bureaucracy and way too many middle managers and supervisors.
And it’s frustrating, these American employees say, to look a few miles to the east and see a far different situation at Southwest Airlines, a Dallas-based company with bold leadership, vision and a management team that’s not constantly in conflict with its workers.
Some even long for someone like Robert Crandall, the straight-talking former American CEO the unions loved to hate. At least with Crandall, employees said, you knew where the company was headed and how it was going to get there. He talked with workers, asked them what could be done to make American better.
“He wasn’t always smiley or being nice, but he wasn’t giving us a line of crap,” said Glenda Weitzel, a 23-year flight attendant.
The American employees say they hope that Tom Horton, American’s new chief executive, has what it takes to lead the airline back to some semblance of its former world-class stature.
“You want a leader to get out and lead. My perception is I never saw that from Arpey,” said Craig Thorson, 52, a 22-year veteran pilot. “I want Mr. Horton to succeed. Absolutely, he must succeed. My career and that of every pilot and mechanic and flight attendant is far more dependent on the success of American Airlines than those of the executives.”
A lingering issue for workers is the $100 million in bonuses that executives received after persuading workers to take $1.6 billion a year in pay cuts and other concessions in 2003, to keep the airline out of bankruptcy. Now, they’re frustrated that they will likely have to give again.
Management’s motto after the brush with bankruptcy in 2003 was “Pull together, win together.”
“They seemed to be doing that at first,” said Christine Daniels, a 10-year Air Force veteran pilot who has been a first officer (co-pilot) at American since 1999. But the goodwill vanished with the management bonuses, which came once the airline was profitable in 2006.
The American employees concede they were well paid before 2003 and, by the standards of many other workers in society, remain well paid.
But the concessions the unions granted to keep American out of bankruptcy in 2003 went beyond just a simple wage cut or working a couple of more days each month.
For pilots, there was an across-the-board 23 percent cut. Many were forced to fly different planes, which meant another pay cut. Captains were bumped down to first officers, and first officers were bumped to less desirable routes and planes.
Now, American appears likely to dump its pilots’ pension fund on the government-run Pension Benefit Guaranty Corp. Thorson and many other older pilots will likely see their generous retirement payments cut nearly in half.