American seeks to reduce annual labor costs by $1.25 billion

How can a 20% cut for everyone be equitable? 20% off the lowest paid employee is drastic while the same cut off the highest paid one just brings them in a lower tax bracket.

As a former Canadian Airlines International employee, when we were faced with a difficult financial situation, we had to invest in the company. To be fair, our employer declared that anyone who earned less than $25,000 a year would not be affected; from then on it went by $10,000 bracket, that is if you earned between $25,001 and $35,000 you contributed 2.5% of your salary and another 2.5% for every increment of $10,000, up to 20% of your basic salary. I would add that anyone who makes more than $200,000 a year could take a 25% cut. That was equitable and fair and AA should look at a similar system if it wants to maintain the dedication and respect of its workforce.

Well thought out system!! But, unfortunately, AA will never approve of it!!! They is a reason why they are being called "fat cats" ..! Pity for the front line hard working, dedicated individuals. Management runs the ship aground, and front line personnel gets to pay the price!

Like health care, the comments by pgwrox reflect the difference in attitudes toward working people between Canada and the U.S. In this country, those who can afford it the least usually take the biggest hit because they have no voice.They are the ones who pay for the years of mismanagement while the big boys get bonuses for being terrible at their job.

Do you work for the Obama administration? Sounds very similar...hmmm? Union tool bag.

To suggest above, as certain bitter jealous (unionist?) laborers are, that only BLUE collar employees are the dedicated hard-working warriors for the cause is just dumb. Frontline labor is but 1 part of the equation. There's a REASON that most working folks opt not to be LEADERS instead, which in turn leaves it up to those who DO to step up & earn the honor of serving as a Mgr who leads others (hopefully by example). It takes BOTH.

Haven't you learned that by NOW ?!

And the aforementioned 20% cuts are labor force cuts, I suspect, more so than they're wage cuts. There just happens to be more worker bees on an airline payroll than there are leader types, so of COURSE the staff cuts will impact the lower ranks more so (in absolute numeric terms).

It's also delusional to believe that there's some kind of labor Nirvana in place up in Canada; there ain't, & there's certainly not one in China, either. There's substantial room for improvement all around the world w/in this biz', starting herein the USA, yes, but there are also examples right herein the USA where it's done rightly, too.

No need to seek advice from Beijing, Ottawa, or even Wash' DC right now. AMR can look across the street @ SWA or up at Alaska for the best examples currently available for viewing.

Spot on. So until the airlines are regulated again, aviation will not be a career. Corporations will play their shell game and continue to create new certificates. It takes less than 1 million dollars to replace any legacy airline's certificate. The current business model is to replace any employee that has more than 5 years with the company. Race to the bottom.....

Next time you are at 33,000ft remember that your plane had some work done on it outside the U.S. No matter what airline you fly. Also, anonymous parroting of your union non-leadership is boring.

Everybody's an expert! Only one of the above (No one saw this coming?) has any business sense. If the rest of you were running AA with your lack of Business 101 behind you, AA would have been gone years ago, never to return. AA was negligent in not taking this action years ago and by waiting they saved many of your inflated salaries and those of your unions, so be thankful it lasted as long as it did. The air transport industry has changed & if the airlines, ground handlers, airports, etc. don't change with it, they die and someone else will take their place. It's an evolution that's not even remotely unique to airlines, it carries over to every other industry. If you were employed by an airline up until the 1980's count your lucky stars because you got to enjoy the "good old days". You need to accept the change & find a way to make the change work for you or find something else to do because the "good old days" as you remember them are gone forever.

Well, the AA employees are lucky that Obama is in power and he has put an excellent man in charge of the group that heads up the government funded pensions. When AA did not hit their pension payment recently (supposed to contribute 97 million and only contributed about 7 million), the gentleman that runs the show there put a lean on assets of AA's in Latin America (i.e. not protected by bankruptcy) to the tune of $90 million dollars to protect AA employees that participate in their pension program. I hope the AA employees appreciate what the Obama adminstration is doing to support them. The unions are not killing the US airline industry -- nothing is that simple. In the case of NW, it was corporate raiders that sold off all the assets for a nice profit that killed it.

Frank and No one saw this coming, are typical middle level Mgmt. Today in america! Management should be rewarded for there business savvy, while the company is losing hundreds of millions of dollars! And the reason, we deserve it and we can't afford to lose our smart people! And the middle class take the beating, because there overpaid! Your comment that foreign carriers don't have these same problems shows how out of touch with the aviation business world you are. BA was shut down 2 different time by strikes because there CEO tried the same tactics that are going on in the us! QA CEO was so brash he shut down the company completely because he couldn't get his way. What did the Judge say your wrong and labor is right! AZ,LH, all have been shut down for hours and days due to wildcat strikes! So saying they run smooth is a lie! But I guess none of them are caused by management. I'm not saying because you sit in an office you don't work hard, but I've never seen an airplane fixed from behind a desk! The problem with business today is the lack of accountability! When I make the company serves me to the FAA for interrogation! When my fleet manager makes a decision that costs millions of dollars which he told won't nothing happens! So when I see CEOs these days wages go up from 52-233% I should just sit back and say "we need to roll with the industry"! My wage has gone down36% since 2002, how about yours?? Ahh the Good Ole days!

AA did take action in 2003 the employees gave back huge to keep AA out of BK.You need to review what took place after 9/11/2001 until now. But you're the expert.

Isn't it the "Smart People" who drove airlines into bankruptcy in the first place? There needs to be some give and take. And retaining top talent isn't only about pay. People have to love what they do and whom the work with also for a company to be successful.

I'm always amazed at this comment that "......we have to pay more and ask for less cuts from these high dollar management types, or we will lose them to others....". I guess I'm just blind but isn't the economy still in the tank???Where are these super talented people going to go??? And weren't they in charge when this ship ran aground??? Why did AA let their pilots, until late October or early November cash out 100% of their retirement when retiring??? Seems like a way to increase your pension liability, doesn't it?? And yes let's address the issue of purchasing new A/C after you say you have no money????
In UAL's case they went bankrupt to get control of the company from the employees. I my self lost over $125,000 in ESOP stock, and was not able to write it off, the way UAL did during the ESOP. UAL management knew exactly what they were doing, with a plan in place, bankruptcy, when this was forced down the employees throats. They knew that at some point they were going to declare it, it was just waiting for the right opportunity. I caution ALL front line AA people to keep a very close eye on management, for they like all other large US busineeses do not believe you have a right to a fair and equitable wage and benefit package.
One more thing, has anyone ever noticed that American execs., NEVER go over seas to work???? It is simple they cannot make anywhere near as much money in Europe, the Far East, or anywhere like they can in the USA. But yet they want all middle class people to disappear. They are such a pain in the butt, wanting a fair wage and benefit package, the nerve of us, we should be happy rapidly sinking into Third world status.
Watch them Airline Execs., are the most grossly overpaid management in the world, with the least amount of performance .

It looks like a class warfare in those plenty-of-essays, in a way it might be just that...but it doesn't help the basic working-class hero who has to extirp the juices of high-school-educated brains (at best) to take care of expensive and fickle flying machines, their Serenissime Highnesses the Pilots, their imported baggage handlers running expensive equipment trying to miss aicraft, herd passengers (sorry: customers) at the highest quality standards inside the metal at the seats they don't like, and ....well you all know the show.
My experience around the world for almost 48 years now: if you are not a pilot or a high ranking (and lucky) executive, you are in the wrong rackett. You will ruin your health and your sanity, but you might be happy doing it. Just see history: The Transports realm doesn't make money, because your good three-mast clipper is too expensive to build, too expensive to maintain, the ports levy too high fees, Wells Fargo had to turn to the Financial realm because the ponies are too expensive and hard to feed, the trains have too expensive locomotives and tracks, so why would we be different?
We are not. The enterprises around us can thrive and make money with our help, taking fellows and stuff where they have to go, but we will always be made redundant after the height of the cycle because we accumulated pay raises and perks and pensions along the years that make us too expensive for the systems to entertain, and we must make place for the new. So if we are lucky, we have honest bosses who try their best to help us go by when they leave us on the side of the road, if not, we suffer the fate of the miners and the steel mill workers and all the hard working people who were before us.
Or we are born in China and we wonder about "provident funds" and the Rice Bowl Made of Steel our Party bosses had promised for all of us.