American Airlines 2009 Annual Report Download - page 11

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In 2006, American and the APA commenced negotiations under the RLA. In April of 2008, following a request by
the APA, a mediator was appointed by the NMB. The parties have been in mediated negotiations since that time.
The APA has filed a number of grievances, lawsuits and complaints, most of which American believes are part of
a corporate campaign related to the union’s labor agreement negotiations with American. While American is
vigorously defending these claims, unfavorable outcomes of one or more of them could require American to incur
additional costs, change the way it conducts some parts of its business, or otherwise adversely affect the
Company.
Also in 2006, American and the TWU commenced negotiations with respect only to dispatchers, one of the seven
groups at American represented by the TWU. Subsequently, following a request by the parties, a mediator was
appointed by the NMB for the dispatcher negotiations. Thereafter, in November 2007, American and the TWU
commenced negotiations under the RLA with respect to the other employee groups represented by the TWU.
Direct negotiations between American and the TWU employees with respect to those other groups continued until
December 2008, at which time the parties jointly filed with the NMB for mediation with respect to the fleet service,
stores, ground school instructors, and simulator technician groups of employees. The NMB appointed a mediator
soon thereafter. Then in February 2009, following a request by the TWU, a mediator was appointed by the NMB
with respect to the mechanics and the technical specialists. All parties have been in mediated negotiations since
that time.
American and the APFA commenced negotiations in the first half of 2008. Direct negotiations between the parties
continued until December 2008, at which time the parties jointly filed an application to the NMB asking that a
mediator be appointed. The NMB appointed a mediator soon thereafter.
The Air Line Pilots Association (ALPA), which represents American Eagle pilots, reached agreement with
American Eagle effective September 1, 1997, to have all of the pilots of the American Eagle® carriers (currently
American Eagle Airlines, Inc. and Executive Airlines, Inc.) covered by a single contract. This agreement lasts until
January 1, 2013. The agreement provided to the parties the right to seek limited changes in 2000, 2004 and
2008. If the parties were unable to agree on the limited changes, the agreement provided that any issues would
be resolved by interest arbitration, without the exercise of self-help (such as a strike). ALPA and American Eagle
negotiated a tentative agreement in 2000, but that agreement failed in ratification. Thereafter, the parties
participated in interest arbitration. The interest arbitration panel determined the limited changes that should be
made and these changes were appropriately effected. In 2004 and in 2008, the parties successfully negotiated
limited changes. The pilot agreement is amendable January 1, 2013; however, the parties have agreed that
contract openers may be exchanged 120 days prior to that date.
The Association of Flight Attendants (AFA) represents the flight attendants of the American Eagle carriers. The
current agreement between the American Eagle carriers and the AFA became amendable on October 27, 2009.
The parties have exchanged contract openers and have commenced direct negotiations. The other union
employees at the American Eagle carriers are covered by separate agreements with the TWU. The agreements
between the American Eagle carriers and the TWU were amendable beginning on October 1, 2007, and the
parties commenced negotiations. In January 2009, an application for mediation was filed with the NMB and a
mediator was appointed to assist the parties. In January 2010, American Eagle and the TWU reached a tentative
agreement with respect to aircraft maintenance technicians and fleet service clerks for 24 months, effective the
date of signing. Finalization and signing of the tentative agreement is expected in early 2010. However, the
agreement is subject to ratification by the membership of TWU, and there are no assurances that the agreement
will be approved.
Fuel
The Company’s operations and financial results are significantly affected by the availability and price of jet fuel.
The Company's fuel costs and consumption for the years 2007 through 2009 were:
Year
Gallons
Consumed
(in millions)
Total Cost
(in millions)
Average
Cost Per
Gallon
(in dollars)
Percent of
AMR's
Operating
Expenses
2007
3,130
$ 6,670
$ 2.131
30.4%
2008
2,971
9,014
3.034
35.1
2009
2,762
5,553
2.010
26.5