Collaboration is Key

By Eve Tahmincioglu

May. 29, 2004

Workforce Management: Do you think American will avert bankruptcy? Why? What’s your strategy, when it comes to labor-management relations, to do that?

Gerard Arpey: We’re certainly not immune to what is happening in the industry, but we are doing all we can to adapt to changing circumstances.

The good news is that we ended the third quarter with more than $3.5 billion in cash, including $500 million in unrestricted (readily available) cash. The bad news is that record-high fuel prices and a revenue environment that is challenging, to say the least, have overshadowed our tremendous pro-gress. We expect to spend $1.2 billion more for fuel in 2004 than we would have with last year’s already relatively high fuel prices.

But we’re working hard on all fronts to drive improved results. The best way to do that is to continue driving Amer-ican to be more competitive by working together, collaboratively with our union and nonunionized em-ployees, and jointly confront the reality that’s before us.

    WM: Do you foresee a time when there will be no consultants at American dealing with labor relations—just labor and management?

Arpey: We collaboratively decided with union officials to hire Overland Resources Group because of their unique expertise in building stronger relationships between managers and employees. Our strategy is to continue working with Overland, having them serve as a neutral third party in our ongoing discussions, until a permanent structure is fully implemented.

But as this process matures and expands across our company, I expect that we’ll eventually be able to decrease our reliance on Overland as a facilitator.

    WM: Are you optimistic about the progress thus far? If so, why? What will be the ultimate (goal)?

Arpey: The success we’ve achieved thus far is a tribute to our employees and a testament to the power of the changes we are making. Our operational improvement is a direct result of our ongoing efforts to restructure our business and the willingness of everyone at American to accept change as an inevitable fact of life in the airline industry.

But even though we are gratified by the progress we have made and the improvement we have achieved in our cost structure, we know we still have a lot of work to do. We have to continue focusing on finding ways to do our jobs more effectively and efficiently.

The ultimate goal is to emerge from this challenging environment a stronger, leaner and more nimble competitor, creating a stable and successful future for all of us.

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