Over the past several years, American has made great strides in virtually every area of its business, including ongoing initiatives to simplify our fleet and schedules, save fuel and reduce distribution costs. Through these and other efforts, American now has one of the most competitive non-labor costs per available seat mile (CASM) in the industry.
The next step is addressing those areas where American is not as competitive as we could be, including in our labor costs. After many of our competitors cut their costs through bankruptcy, forcing steep concessions in wages and benefits, American was left with the highest labor costs in the industry. For American to compete successfully and be profitable for the long term, we must better align our labor costs with those of our competitors. This process goes beyond comparing basic wage rates and CASM. Instead, we look at wages, work rules and productivity at each carrier, measuring our cost per block hour or our cost per paid hour to get the most accurate gauge of our competitive standing.
The company is eager to work with the unions through the negotiations process to identify ways to meet our employees’ goal of increasing their income, while also addressing our need to be more efficient and productive in our operations.