Heavy Weather At American Airlines :: essays research papers

Heavy Weather at American AirlinesBusiness WeekHeavy Weather at AmericanJan.27 1997pg 32     There is a plumping shake up at American Airlines. The pilots want moremoney but trouble has already spent it. Another strike you say. Yip, lookslike it. The chief executive of American Airlines was stunned when on January8, by an overwhelming vote, pilots rejected a tentative contract. Pilots thengot a message from the company president state "For the first time in manyyears, we fear for the future of our company."     The reason that this strike could spell disaster for one of the leadingairlines in the world is the rather large order of new aircraft American orderedfrom Boeing. American says that having to pay higher pilot salaries and buy newaircraft makes it an uneconomical investment, in other course they can not doboth and still stay in business. A strike could even threaten a purposedalliance with British Airways. American in not alone though. With industryprofits on the constant rise, employees of other airlines are pushing for higherpay also, but undeniably American is in the worst position right now.     It looks to me like the pilots were not very happy with the decision topurchase new aircraft from Boeing back in November when it was first voted on.It come alongs as though instead of purchasing new aircraft the pilots wanted a payincrease. What the pilots want is a pay increase of 11% over the next quaternityyears. What the have been offered is a 5% increase. The argument that thepilots have put forward is the fact that their offer does not even keep up withinflation. It looks as though a strike would be very unlikely because of theamount of money involved, somewhere around fifty million a day would be lost byAmerican. That big of a loss could be very detrimental to any company.     What can management do with a dilemma like this? It seem that theydeparted with out knowing where they were going to land. They should have madesure in that location would not have been an uprising in any part of the company in front thetook measures as drastic as ordering six-billion dollars in new aircraft. Itlooks to me like there needs to be better communication between all facets ofmanagement in this company.     The only way out of this mess that I can see is to reduce the order fromBoeing so that they can afford to give the pilots there precious pay increases.This could cause more problems depending on how lenient the contract between