American Airlines has made reduction of costs the cornerstone of its bankruptcy reorganization plans. From the very beginning they’ve made it clear that they expect to cut costs pretty much across the board. This includes returning some aircraft to lessors and getting out of some real estate deals and also, hopefully, renegotiating labor contracts. That last part likely just got a lot harder.
A nine-member panel was appointed to represent unsecured creditors of the company and three of those seats are held by representatives of the company’s unionized workforce. The pilots, flight attendants and ground workers each received a seat on the panel, along with Boeing and other creditors. Having that strong a union voice in the courts as recommendations are heard is going to make it much more difficult for the company to pull a fast one on the employees, but that also seems to be their only plan for getting out of the bankruptcy so that could hinder those efforts.
In other bankruptcy news, some analysts are suggesting that American should scale back operations at Chicago, Los Angeles and New York City and focus on their fortress hubs in Miami and Dallas-Ft. Worth. Fortress hubs are great, I suppose, for the business. But when that’s all you have you’re horribly susceptible to competitors showing up and fighting. And that sort of fight isn’t what an already struggling company needs to be faced with.
Always interesting to see what’s next…
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