Heavy Weather At American Airlines Term paper
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Heavy Weather at American Airlines
Business Week
Heavy Weather at American
Jan.27 1997
pg 32
There is a big shake up at American Airlines. The pilots want more
money but management has already spent it. Another strike you say. Yip, looks
like it. The chief executive of American Airlines was stunned when on January
8, by an overwhelming vote, pilots rejected a tentative contract. Pilots then
got a message from the company president saying "For the first time in many
years, we fear for the future of our company."
The reason that this strike could spell disaster for one of the leading
airlines in the world is the rather large order of new aircraft American ordered
from Boeing. American says that having to pay higher pilot salaries and buy new
aircraft makes it an uneconomical investment, in other words they can not do
both and still stay in business. A strike could even threaten a purposed
alliance with British Airways. American in not alone though. With industry
profits on the constant rise, employees of other airlines are pushing for higher
pay also, but undeniably American is in the worst position right now.
It looks to me like the pilots were not very happy with the decision to
purchase new aircraft from Boeing back in November when it was first voted on.
It seems as though instead of purchasing new aircraft the pilots wanted a pay
increase. What the pilots want is a pay increase of 11% over the next four
years. What the have been offered is a 5% increase. The argument that the
pilots have put forward is the fact that their offer does not even keep...
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