American Airlines employees await decisions

American Airlines and American Eagle employees prepare to march to U.S. Bankruptcy Court to protest against American's plans to cut jobs and labor costs while under bankruptcy court protection on April 23, 2012 in New York City.

Jeremy Hobson: As American Airlines winds its way through bankruptcy, some of its union workers are voting on new contract offers. We're waiting this morning for the results of the voting by two big labor unions-representing pilots and maintenance crews. Next week, a judge will decide if the company can throw out its old labor contracts and impose even more severe cuts on the workers.

Seems dramatic, but as Marketplace's Mitchell Hartman reports, the bankruptcy has been almost invisible so far to American's customers.


Mitchell Hartman: Back in February, American Airlines said it planned to lay off 13,000 employees -- about 15 percent of its workforce.

Since then, there have been layoffs -- reservation agents and skycaps in Arizona, managers in Tulsa. But nothing close to 13,000.

Richard Gritta: It takes time to revise your schedules and change your route structures.

Aviation expert Richard Gritta at the University of Portland says cutting back on service will eventually lead to job cuts. But he says the layoff announcements also have a 'strategic value.' American Airlines wants union workers to accept deep cuts to wages and benefits. The threat is, vote 'yes,' or the company will impose unilateral cutbacks that are even worse.

Gritta: The history of union-management relationship in this industry has been terrible.

Many of American's union workers apparently hope US Airways will fly in like a white knight, merge with their bankrupt employer and stem the layoffs that are still coming.

I'm Mitchell Hartman for Marketplace.

About the author

Mitchell Hartman is the senior reporter for Marketplace’s Entrepreneurship Desk and also covers employment.

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