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Labor woes worsen at American Airlines

American Airlines employees help travelers at the ticket counter in the Miami International Airport on September 18, 2012 in Miami, Florida.

American Airlines is hitting some strong turbulence as it makes its way through bankruptcy reorganization, toward a possible merger with U.S. Airways. Tense relations between the carrier and its labor unions seem to be catching passengers in a morass of late and canceled flights.  

Widespread flight delays are being reported just as American's parent company, AMR, is sending layoff warning notices to more than 11,000 employees. The notices mean the workers could lose their jobs within the next two months. Up to 6 percent of the carrier's flights have been canceled in the past few days, while as many as six in ten of its remaining planes have arrived late.

Union pilots had already accused the carrier of using the bankruptcy process to wring out "punitive" cost-cutting concessions. Now, Allied Pilots Assocation spokesman Tom Hoban is hinting that pilots are grounding planes for even minor repairs that wouldn't normally cause delays.

"We're under a great deal of FAA scrutiny in this bankruptcy right now," Hoban says. "We've got pilots who are going to take a very, very cautious operational approach, and if there's a maintenance item in question, they're going to write it up."

Hoban denies, however, that the union is encouraging or sanctioning a work slowdown or sickout, which would be illegal.

Wall Street Journal travel columnist Scott McCartney says American has become so unreliable that travelers should avoid booking flights on American this fall.

Veteran airline consultant Mike Boyd, on the other hand, thinks that's going too far. "They have some issues they're working through. All airlines have had this," Boyd explains. "To imply to the public that this is going to continue for months is totally inaccurate."

Teal Group aviation analyst Richard Aboulafia says American needs to resolve its labor issues quickly to avoid losing business.

"They still have some time to make this right," he says, "but if this persists [and] they can't get the unions on the same page as management ... there are going to be good reasons to be wary."

At Airfarewatchdog.com, travel expert George Hobica cautions that American's troubles could foreshadow tough labor bargaining ahead as airlines return to profitability. 

"The unions have done a lot of givebacks," Hobica says, "and now [that] the airlines are making money finally, they want their share."

Hobica's website, by the way, recently ranked American second-to-last in customer satisfaction.

About the author

Bob Moon is Marketplace’s senior business correspondent, based in Los Angeles.

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