If there's any clearer litmus test for the health of the overall economy, it's the airline industry. And more than just the recent focus of all that air rage on the part of Alec Baldwin, American Airlines has been making headlines yet again with its own tales of economic struggle.
As has happened with many carriers in the past, it's the employees who seem destined to take the biggest bruising. As a solution to its bankruptcy issues, American rather contritely opted, a few weeks ago, to float a plan that calls for 13,000 jobs to disappear, as well as a move to dump the company's pension plans.
While this seems like a quick, shareholder and executive-friendly solution on paper, not only are those 13,000 real jobs, but American and its parent corporation were a little quick to insinuate that the Pension Benefit Guarantee Corporation would simply step in and handle that whole pension default, affecting 10 times as many employees.
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The PBGC noted that American's pensions are already underfunded to the tune of $10 billion and that its retirees would lose about a billion dollars if the pension program is eliminated. They've become unusually vocal for a quasi-governmental organization, largely as they seem to be positioned as the bagman to catch American's hot potato, and have even created their own "Get the Facts" page on the dicey subject.
As a result, American employees launched protests Tuesday at DFW, though pilots' union members were absent from the picket lines: They've got more to lose in the battle and have opted to maintain a less public approach.
Will the pickets and the protesting produce any results? You've seen how American labor relations disputes work out, especially in the turbulent airline industry. Add to that the projected (or, let us say, scheduled) spike in fuel prices this summer and you have a situation which promises to be just as volatile for passengers as it is for those embattled airline employees.
All of this made me feel a little uneasy last week, as well, when I got yet another solicitation in the mail for an American Airlines credit card. Bored at the terminal a few years ago, I accepted the pitch and signed up for a Frontier Airlines credit card: the debt servicing from that endangered airline's credit division actually helped send the company into bankruptcy, from which it has never fully recovered.
I'm interested to see the next move on American's behalf. I don't suspect that the pension plan part of the deal is particularly high on the list of discussable items.
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