American’s deteriorating performance attracts attention

Washington DC
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American Airlines' dismal on-time performance and on-going dispute with its pilots has attracted an unfavourable comparison to long-defunct Eastern Air Lines.

Only 55.8% of the Fort Worth-based Oneworld carrier's about 3,850 flights have arrived on-time since 23 September, according to data. This is a marginal improvement over the week prior when only 48% of the airlines' 12,508 flights arrived on-time, however, this could change quickly considering that we are only two days into the week.

"The dispute with the pilots recalls how the pilots at Eastern Air Lines killed the already weakened airline two decades ago in a labour dispute," says Ray Neidl, an airline sector analyst at Maxim Group, in a report today. "Although we do not believe conditions at AMR have reached anywhere near this level as yet, we do remain concerned that it could escalate in what is a weak economy and if not resolved could lead to a possible further weakening and eventual liquidation of the company."

Eastern was beset with labour strife between its employees and management team, which was led by Frank Lorenzo, during the late 1980s before the airline shut down in 1991.

"The recent disruptions are primarily due to the significant increase in maintenance write-ups by our pilots, many right at the time of departure," American said on 20 September. "Additionally, continued higher-than-normal sick usage by pilots, which has been up more than 20% year over year and has been elevated for months, impacts the availability of reserve pilots, which can ultimately lead to cancellations."

The airline announced on 18 September that it would cut between 1% and 2% of its flight schedule through October.

The Allied Pilots Association (APA) has denied that any job action is on-going and points to the increase in the number of mechanical delays, which it attributes to American's decision to close maintenance facilities and furlough workers, for the carrier's poor on-time performance.

"The pilots of American Airlines are angry," said Keith Wilson, president of the union, in a letter to employees as well as to the press earlier this month.

The APA board is scheduled to meet to discuss a letter from American to resume negotiations on 26 September, according to the union.

Reports of increased delays at American began when the carrier began implementing a new contract with its pilots earlier this month. The APA opposes the new agreement.

The union began a strike vote among American's pilots on 12 September, which is scheduled to conclude on 3 October.

The US Bankruptcy Court for the Southern District of New York approved American's section 1114 motion to reject its previous contract with its pilots and implement the new term sheet on 5 September.

Pilots rejected a tentative agreement between American and the APA on 8 August.