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American Airlines' Lies
Charles Leocha · April 18, 2003

You gotta hand it to the cronies running the major US airline world. They are a brazen lot who are looking out for themselves while screwing their workers.

It makes me sick.

Only a couple of weeks ago, I slammed the executives of Delta, Northwest, Continental, United and US Airways for "looting the sinking ship," but singled out Don Carty of American Airlines as an executive who has gone out of his way to share the pain with his workers.

I singled Carty out after assurances from American Airlines workers that in their airline executives, pilots, mechanics, flight attendants and all workers were shouldering the salary cuts and manpower reductions together to save the airline. They now feel betrayed and are angry.

I should have known better. Every other phase of the airline business is conducted in lockstep order. Public prices go up in exactly the same amounts. Market fares are reduced in exactly the same way. Sales, amazingly, with no collusion, start and end on virtually the same days. Commissions are slashed, rules changed, schedules are cut and workers are laid off with similar patterns.

Why should major airline executive featherbedding and looting be any different? It isn't. It seems that every senior executive who has been involved in the destruction of the major US airlines has been reaping bonuses for their excellence.

A whistle-blower from American Airlines was the first to correct my assumptions about Carty. He sent spreadsheets outlining exercising of options by Carty that amounted to bonuses.

True, but the real zinger came when AMR, the parent company of American Airlines, released their SEC report for activity in 2002. The Star-Telegraph and AP were the first to blow the whistle. Then it showed up in my local paper, The Boston Globe, and now I find it in the Wall Street Journal.

According to the Wall Street Journal, "Amid cost cutting and enormous losses, AMR's board last year agreed to spend an undisclosed cash sum to create a trust to protect supplemental pension benefits for 45 senior American executives. In addition, the board last year offered 'retention bonuses' -- equal to twice base salary -- to American's top six executives if they stay with the troubled airline through January 2005. Meanwhile, the company asked workers to swallow pay cuts of between 15.6% and 23% starting May 1, and to accept cuts in their own benefits and looser work rules."

All this was done secretly and under-the-table, while the management publicly preached shared pain and cuts. In fact, American Airlines management delayed the SEC filings until late in the day of union voting on acceptance of deep pay, benefits and work rule cuts.

The callousness of this deception is not making American Airlines a model workplace. An airline that once had exceptionally good management/union relationships (by airline standards) is now faced with destructive distrust.

American Airlines management has mounted a rear-guard action with emails to the rank and file pleading their case for bonuses and the funding of the executive pension plan. Though, those arguments can be said to be relatively rational, the covert management plunder has sown organization-wide mistrust, suspicion and wariness.

The "highly qualified executives" of major airlines have mismanaged our country's largest airlines into (or almost into) bankruptcy, given themselves millions in bonuses and salaries, fattened their pension trusts and lied to their workers.

The rank and file of American Airlines voted to sacrifice for the good of the company, but their corporate executives are again threatening the airline because of their duplicity.

Charlie Leocha is the Boston-based author of Travel Rights: Know the Rules of the Road and the Air Before You Go. Cheap Charlie appears every Monday on this site. E-mail him at leocha@aol.com or access his Web site.