As American Airlines brings back flight attendants from among those laid off, Delta creates a stir by altering pay rules.
By wire services
Published October 11, 2003
American Airlines Inc. is calling back to work 390 flight attendants who were furloughed in cost-cutting moves to avoid bankruptcy, the first such recall at the world's largest air carrier since the Sept. 11, 2001, terrorist attacks.
Meanwhile, some Delta flight attendants are worried that new work rules that blend their base and overtime pay will mean less money and lower pension benefits. But the nation's third-largest airline says the changes will allow workers to earn more and save the company $40-million a year through increased productivity.
American, which signed a letter of agreement with the Association of Professional Flight Attendants, said it will increase its flying schedule in coming months and into the spring.
The recall represents a small fraction of the furloughed attendants represented by the Association of Professional Flight Attendants. The union, which has more than 25,000 members, still will have 5,852 furloughed and an additional 1,385 on voluntary leaves of absence.
"We're very excited about it here," said union spokesman George Price.
The recalled hires will come from the pool of furloughed employees, and not from the pool of flight attendants on leave. The union and airline agreed to the departure from their usual practice for this recall, which begins Dec. 2, in a compromise gesture to help those who are involuntarily out of work.
The need for more flight attendants comes as American adds more seasonal flights to its schedule for the winter months, said spokesman Todd Burke.
American's parent company, AMR Corp. of Fort Worth, Texas, has shed nearly 30,000 employees worldwide since the 9/11 terrorist attacks, as it struggled to avoid bankruptcy. AMR expects to have about 90,000 employees by next year.
At Delta Air Lines, the roughly 14,000 flight attendants receive a base salary for the first 50 hours of work a month and an overtime rate for hours worked above that, with a maximum of 90 hours total.
New rules that go into effect next summer mean flight attendants will receive one pay rate for all hours worked, but the cap on the total hours they can work will be eliminated.
The changes mean an employee working 70 hours a month under the current system could work one hour less under the new system and make the same amount, Delta said. However, an employee working 80 hours now would have to work one hour more to make the same amount, the company said.
Pension benefits are based on the amount of yearly earnings for three consecutive years during the last 10 years of a flight attendant's service. Flight attendants could earn higher benefits by working longer hours, but if they kept their schedule the same in their later years their benefits might be less.
"That's the law of averages. The tradeoff is they have the choice," said Joan Vincenz, the airline's director of in-flight service operations and planning.
Depending on seniority and hours worked, Delta flight attendants currently earn $30,000 to $60,000 a year. Vincenz said the cap on hours worked prevents ambitious flight attendants from increasing their pay. Others prefer to work fewer hours, she said, so there will be plenty of overtime available.
The work rule changes include plans for increased automation and eliminating things that cost Delta money, like its reserve program.
Under the reserve program, the company guarantees 20 percent of flight attendants compensation for being on call 18 to 20 days a month, whether they work or not. Under the new system, those workers will be on call only three to nine days a month. The rest of the time they will be on pre-plotted trips, Vincenz said.
Delta, which lost $1.2-billion last year, has laid off 16,000 employees since the 9/11.
The good news for American spilled over to the stock market Thursday as airline shares rose. AMR saw its shares climb more than 11 percent, closing at $14.85, a 52-week high.
Other airline shares also fared well Thursday. Dallas-based Southwest Airlines Co. shares rose 79 cents to $19.54, also a 52-week high. Houston-based Continental Airlines Inc. shares rose $1.72 to close at $21.25, also a 52-week high. Shares of Delta Air Lines Inc. rose $1.09 to $1.69.
- Information from the Associated Press and Dallas Morning News was used in this report.
