American Airlines seeing light at the end of bankruptcy tunnel

Decision on merger with US Airways among issues being considered after a year of employee layoffs, union talks

As 2013 began, American Airlines had ratified contracts with all three of its unions, a key step in emerging from bankruptcy.

And a decision on whether to merge with US Airways — a move the unions support —was weeks away, according to a letter to employees this month from chairman and CEO Tom Horton.

American spent much of 2012 restructuring, which made for a rocky year of layoffs and labor negotiations.

On Feb. 1, 2012, Horton told employees in a letter that all workgroups would have to reduce costs by 20 percent, acknowledging that the airline would "end this journey with many fewer people."

By May 1, employees were offered "early out" programs, which included special severance packages. Many took the leap — in fact, enough that American was hiring 1,500 new flight attendants by November.

Asked how many employees had been laid off by the end of 2012, spokesman Bruce Hicks released this statement via email:

"It is always difficult to furlough people, but we have worked hard to significantly reduce the number of affected employees. When we began our restructuring, we anticipated a need to reduce as many as 14,000 positions, but through negotiations with our unions and 'early out' or voluntary incentive packages, we were able to limit the number of furloughs to less than 2,600, of which 1,200 were management and support staff employees."

Hicks added, "We are providing career counseling and other resources to affected employees to help during this transition."

Letters in May also went over a complex series of management changes that involved reductions.

It was Dec. 7 before pilots ratified a contract. Pilots and flight attendants already had made substantial concessions in 2003 in an effort to help keep the airline from going bankrupt.

The contracts with members of the Transport Workers Union, which includes mechanics and stock clerks, were ratified in August. The Association of Professional Flight Attendants ratified its contract the same month, but the Allied Pilots Association voted and did not agree to a contract.

After the successful Dec. 7 pilot vote, Horton wrote employees, "We are approaching the end of restructuring and the beginning of a new American."