Can American Airlines survive?

The pilot union has gone six years without a contract, and the issue is coming to a boil. Delays and maintenance issues are turning off customers.

By Jonathan Berr Oct 2, 2012 3:36PM
Portrait of Pilots Sitting in the Cockpit, Adjusting the Controls -- Digital Vision., Digital Vision, Getty ImagesAmerican Airlines, whose planes first took to the sky in 1934, is fighting for survival.

Not only is the unit of AMR Corp. (AAMRQ) bankrupt, it's in nasty battle with the Allied Pilots Association (APA), which represents the airline's 10,000 pilots, that shows no signs of easing. Flight delays are mounting, as are reports of maintenance problems. The Federal Aviation Administration is stepping up oversight and passengers are defecting in droves.

About half of its flights have been on time since Sept. 16, compared with 87% for the other major airlines combined, The Los Angeles Times reported, citing data from FlightStats.com. "During that time, American has canceled more than 900 flights and experienced nearly 13,000 delays nationwide, far more than any other major airline."

The roots of the dispute date back six years, which is how long the APA has been without a contract. It's been escalating recently. American has accused the union of creating the delays by documenting frivolous maintenance issues, a charge the APA denies. Passenger seats are even coming loose on some flights, which the company says is unrelated to the dispute, though some pundits have argued otherwise.

"Nothing in the eyes of the FAA is frivolous," says Capt. Sam Mayer, a spokesman for the pilots association, in an interview, adding the company's management is proving it's "just incapable of managing this airline."

Officials from American Airlines couldn't immediately be reached.

The APA rejected a six-year contract offer from American in August, forcing the issue to go before a federal bankruptcy court. Unions representing pilots, flight attendants and transport workers are backing a plan by US Airways (LCC) to bring American out of bankruptcy through a merger. For them, US Airways was much easier to deal with than American.
 
Whatever becomes of American Airlines, one thing is certain: The brand may not be around for much longer because it's becoming synonymous with poor customer service and slipshod maintenance. Winning back customers will be hard no matter what the airline calls itself.

--Jonathan Berr does not own shares of the listed stocks.  Follow him on Twitter @jdberr.

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Tags: LCC
40Comments
Oct 2, 2012 4:01PM
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This airline deserves to go out of business.  For years it has been managed badly and its employees are arrogant and rude and do  nothing to help the customer.   I fly over 150k pper year and avoid american airlines
Oct 2, 2012 5:39PM
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Greedy management and poor management period.

CEO's and the management make way to much money and I am sure they will get a bonus for going bankrupt as well.

Oct 2, 2012 3:58PM
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If their maintenance people and inspectors can't even properly install passenger seats, they not only don't deserve to be operating, the FAA should shut them down for the safety of the flying public, which is their charter.
Oct 2, 2012 4:18PM
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I would not be surprised if the airline would shut down. Recently I was flying home from Honolulu. As I stepped into the airport I scanned my e ticket. I called the airline in the morning of departure. I was still 2 hours early. As soon as I scanned my ticket someone said your flight is backing out now. There were so many times when the people at the check in counter were sleeping when they were looking over my flight data. I have been to Hawaii numerous times to see relatives. According to my flight data the flight was to take 10 hours. Till it was all done it took 20 hours to get to Pa. Customer service!  They belong with Wal-Mart for customer service.
Oct 2, 2012 6:48PM
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I have been flying for 62 years, most of the time on TWA, although many times on other airlines. In 1950 a bargin coach ticket on TWA fron NYC to LA cost $100.00 each way (gasoline was ten cents a gallon). That represented over a week's salery for a seasoned engineer (that is correct what an experienced engineer made in one week) and it took all day to for the flight and it was noisy and shakey (a lot of vibration). Recently folks, I bought a ticket from LA to NYC on American for $129.00 each way and I got there in 5 and a half hours. The flight was smooth, relatively quiet and relatively comfortable. Flight personnell were professional and couterious as I experience most of the time. Anyone who flies may experience unplesant events but after flying over 3 million miles, I have nothing but admiration for the airlines and the airline staff. Could they be better? Yes, of course they could, but compared to 62 years ago they give us a standard of travel that is awsome.    
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Couldn't happen to a "nicer" airline !
American Airlines has bullied and broken more airlines and employees than any other in the world. The FAA should shut them down. Pilots flying six years without a contract ? Mechanics and ground crew forced to work with a 37 percent cut to salaries and losing their benefits ??? They are nothing more than a cash cow until the management gets caught and then closes the doors because of greed and what amounts to just out and out theft. Federal monies being paid out in executive bonuses ??? That should be enough to throw the executives in prison.
Oct 2, 2012 4:30PM
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What are those pilots going to do when AA goes under?
Oct 2, 2012 4:35PM
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Braniff is gone as is Pan American and TWA. GoodBye AA. I can't say it was fun.
Oct 2, 2012 5:45PM
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This is the airline that congress was protecting when they came out with the Wright amendent that forced Southwest Airlines to only fly to states that connected geographicaly to the state of Texas.

And they are still going strong.  Anyone else have a strong BS detector?

Oct 2, 2012 5:33PM
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I had to attend a meeting the day after my Dad's funeral ( work for a small firm- no other options). AA cancelled my flight due to maintenance issues. Later they lied and claimed it was weather...kind of hard to claim weather when the pilot and mechanical indicate it is a bad part.

For seven hours I waited while the "preferred" customers took open seats when they rolled in early for a flight. I then had an agent rebook without my consent my ticket to Tampa to Orlando- claiming it was a 20 minute shuttle between airports and would cost  me $10. When I attempted to record this lie with my phone I was almost thrown out of the airport.....

I hate AA and the awful way they treat PEOPLE. I cannot feel sorry for the non-executives as they are the ones who acted in an inhumane and deceitful manner. The entire day I was calm, polite, did not curse; simply asked for answers which no one could provide an honest reply.

You deserve to go under. For years you have provided "decent" service to your FF's- inhumane to the rest of the unfortunate public who does not endure 50k miles a year.

 

 

Oct 2, 2012 5:15PM
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Just stop flying for one year and I guarantee that you the industry will get themselves straight with their employees, their pilots, and the American consumer.

Don't fly for one year and you will straighten out this business with the airline industry. Vote with your pocketbooks. That's all you need to do. Shutdown the airlines, the airports, the bus services, the courier services, the taxis, the hotels. Don't fly anywhere one year. The American consumer is sovereign. We rule; not these lame *ss excuses for corporations.

Boycott the airline industry for one year. Ronald Reagan might have fired all those flight controllers, but the government can't touch the will of the American people. When they are doling out unemployment checks and food stamps to all these unemployed employees like its candy, I guarantee you the government will get itself and the corporate losers straight with the American citizen.

Do something good for yourself, America.
Oct 2, 2012 4:42PM
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I was close friends with an AA flight attendant for several years in the mid-70s when she was based in San Diego at Lindbergh Field before de-regulation took effect in 1978.  Steady paycheck, great benefits, travel (a camera safari to Tanzania,  a trip to the island of Rhodes off Turkey, etc) was ideal for her until her death on May 25, 1979 onboard the doomed Flight 191 DC-10 that crashed on takeoff from O'Hare with 275 deaths.  What has happened in the last few months is appalling, and I don't think the airline will survive a year.  Sad, sad, sad. 

Oct 2, 2012 5:13PM
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I never rejoice in an American company hitting the skids, but AA is a bad company to work for and a bad company to do business with.  I fly about once a month for business and am often stuck with AA flights when I have to book last minute.  The reason, of course, is that travelers book all the other lines first.  American is truly the airline of last resort in my major metropolitan area. 

 

I've had at least one major problem in each of  the last eight trips I've taken using AA: cancelled flights, late flights, missed connections, lost luggage, oversold cabins, the litany goes on and on.   And I have never seen ruder, less helper ground agents than those employed by AA.  Granted, I think their bad behavior mirrors their dissatisfaction with their employer, but it is infuriating to be on the receiving end of such rudeness when you are in the midst of a travel crisis not of your own making.   

Oct 2, 2012 6:00PM
Oct 2, 2012 5:18PM
Oct 3, 2012 8:24AM
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To everyone out there.  The seat track problem is not created by mechanics as were now learning, apparently Boeing had a few seat tracks manufactured that were not heat treated or machined just right and these some how got into the supply chain and installed.  This news cane out yesterday from the FAA and Boeing as they started looking into this problem.  I don`t work for AA or the Faa or Boeing but I am involved in the airline industry as a mainteance inspector.  Every airline a some time or another goe`s through this.  Remember Delta a few years ago when they did a bankruptcy, and Northwest and United and Continial, and Western along with numerous other carriers.  I`m not saying this is right but, the US Airline industry as a whole is still the safest way of travel regardless of all the turmoil.
Oct 3, 2012 7:02AM
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Way to go AM pilots. You guys hang right in there and you show 'em. Drive those bastards into the ground. You can do it. Just hang in there guys.Show those management pukes how strong you are! Shut them down! Make them pay! I remember when you had your street dances when my airline, Braniff, folded. I am waiting for the Cum by Ya. I am right behind you!!
Oct 2, 2012 4:45PM
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Gee I miss LEGEND AIRLINES! Remember them AA?, you sued them out of business back in 2000 because they were taking ALL of your precious business travelers that you overcharged. Justin Timberlake once said, "What goes around, goes around, goes around Comes all the way back around".

You should have filed 10 years ago when all the other airlines did you prideful bastards! VIRGIN AMERICA HERE I COME

Oct 3, 2012 9:00AM
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Is it bad that american airlines just added aeroflot as a world member?
Oct 3, 2012 6:32PM
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Thanks for your informed and well-reasoned response. I reconsider my suggestion now to be rather fool-hardy, considering the factors you mentioned.
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