Union: American Airlines Overstates Labor Cost Gap
DALLAS TheStreet) -- A key component of the AMR> (AMR) recovery scenario is that contract improvements at competitors will lead to convergence with American Airlines' labor costs, which the carrier says are the highest in the airline industry.
American's flight attendants aren't buying it. As far as flight attendant costs are concerned, convergence in labor costs is already here, they say, a result of a series of contract improvements made by American's competitors.
"The cost disparity had turned to zero because of the contract increases," said Dan Akins, a consultant who serves as economic advisor for the Association of Professional Flight Attendants, in an interview. APFA represents about 18,000 American flight attendants. By mid-2011, "the flight attendant contract costs of other carriers were equivalent to those at American," Akins said.
"The conundrum for me is that American's cost disparity relative to their competitors has been shrinking, yet their performance in terms of profit margins has fallen further and further behind their competitors," he said.Nevertheless Akins said he does not see an imminent bankruptcy, despite recent investor concerns that resulted in an
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