American Airlines Negotiations

Continuing Negotiations April 12, 2010

Mark Burdette on the importance of continuing negotiations with the APFA and TWU

Since the start of labor negotiations, we have been consistent in our approach to bargaining with each of our represented groups. Central to our philosophy is finding ways to increase compensation and yet bring our costs and productivity in line with the rest of the industry.

In our mediated talks with the APFA and TWU, we have made steady progress. We’ve reached tentative agreements on a great majority of contract articles, but have been unable to agree on a handful of key issues. The APFA and TWU have now asked the NMB to release them from mediation in an attempt to start the wheels in motion toward a potential strike.

There’s been some talk lately about threatening the company with economic damage on the theory that somehow those threats will help lead to a better contract for unionized employees. But the reality is that both employees and the company would be harmed by that approach. It would be a self-inflicted wound that harms everyone at AA. And such action would put the company in an incredibly difficult situation where positive outcomes start to be very limited.

I believe that we can get back to the table and hammer out our differences. A negotiated solution would encourage both sides to move toward compromise, while keeping our fate in our own hands. But if the NMB decides that we can’t make any more progress in mediation, we would support a recommendation of binding arbitration. It would be the next best thing to a mediated settlement and provides an opportunity to have neutral third parties give all parties a reasonable deal.

As I told the NMB in our formal response to the APFA’s and TWU’s request for release, “American is not seeking an indefinite period of mediated discussions, and fully understands the objectives, policies and practices under the Railway Labor Act. We simply believe that a proffer at this point in time is premature. Continued mediation, perhaps concluding with interest arbitration, is the better course of action for all concerned.”

Let me stress again that American wants agreements with its unions that keeps our employees very well compensated. However, it’s going to require improvements in productivity and cost reductions that enable us to compete with and beat the airlines with whom we’re in a struggle for passengers. In the long term, doing so is the best – in fact, it’s the only - assurance of a secure financial future.