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    Management and Support Staff

    Our Approach
    Our restructuring goal with the Management and Support Staff (Mgmt/SS) workgroup aligns with our overall employee strategy – to achieve the necessary financial savings by implementing sustainable, structural changes that will position our airline to compete and win. Like other workgroups, the Mgmt/SS workgroup has been tasked with reducing annual employee costs by 20 percent, or $165 million for this workgroup.

    Based on our business plan for the airline, these changes are necessary to successfully restructure and position our company for future success and growth.

    What to Expect
    Implementation plans vary by workgroup. Changes to the management structure and staffing will be driven in large measure by the management redesign process now underway. We expect that most will be implemented within the next few months. Implementation of the plans’ universal changes to benefits will happen once we have resolution on these items for all workgroups. Please continue to refer to eHR for current policy and guidelines.

    All Management and Support Staff Changes
    We will put in place changes to the Management and Support Staff structure necessary to get to a cost structure that is sustainable for the long term and reaches our target savings.

    • Management and Support Staff Structure
      • Reduce the combined number of Management and Support Staff positions by approximately 15 percent, beginning with the changes to the officer team announced in January and continuing through each layer of the organization
        • This work will continue for several months with most staffing changes in place by late Summer 2012
      • When a Reduction in Force (RIF) is necessary, current severance policy, as listed on Jetnet, will apply
    • Management Pay
      • Future pay increases will continue to be governed by American’s Pay-for-Performance philosophy
    • Support Staff Pay
      • Continue to review Support Staff pay progression on an annual basis
      • Provide a 1.5 percent annual structural pay increase on May 1 in 2013 and each year through 2017
    • Profit Sharing
      • Eliminate the current profit sharing plan and the Annual Incentive Plan (AIP) for eligible management employees and replace with a new enhanced profit sharing plan*
        • Employees may remain eligible for AIP CE Rewards per the terms of the AIP plan, until the AIP plan is cancelled
        • * Support Staff currently participate in the enhanced profit sharing plan, effective 1/1/2011
    • Work Rules
      • Reduce maximum vacation accrual from 30 days (6 weeks) to 25 days (5 weeks)
      • 2011 earned vacation for use in 2012 remains unchanged
      • Effective July 1, 2012, the accrual rate for employees with 25 years or more of company seniority will be changed to equal 2.0833 days per month
        • Employees with 30 years or more of company service may accrue more than 25 days in the transition year (2012 accrual for use in 2013)
      • Discontinue Personal Vacation (PV) days effective July 1, 2012
      • Ability to purchase Flex Vacation days remains
    • Protection
      • Effective April 18, 2012, discontinue ALL Location/Station Protections and System/Job Protections (including Job Security, Employment Security, ARP Protection) for workgroups that currently have protection
        • Any RIF would be completed in accordance with current policy
      • As a result of the elimination of these protections:
        • End Special Severance of $12,500 associated with Protection. (Regular Severance remains in effect in accordance with company policy
        • End Special Moving Allowance of $12,500 and Direct Moving Allowance of $3,500 associated with Protection. (Regular Moving Expense Reimbursement remains in effect in accordance with company policy)
        • On a one-time basis, for reductions in force associated with the restructuring, previously protected employees will be eligible for the Special Severance allowance of $12,500
    • Attendance Policy
      As part of an on-going review of policies, we will also be developing a new Attendance Policy. Additional details will be forthcoming
    • Pension
      The Retirement Benefit Plan of American Airlines, Inc. for Agent, Management, Specialist, Support Personnel and Officers (DB plan) will be frozen. This means AMS employees will get to keep the pension benefits earned as of the date the plan is frozen, but will not earn any additional benefits once the freeze goes into effect. This includes employees who elected the $uper $aver Plus during the choice years and will, therefore, no longer receive future pay growth on their pension benefit
    • 401(k)
      Starting the day after the DB pension plan is frozen, employees will be eligible for a replacement Defined Contribution Plan (DC) retirement benefit. The $uper $aver 401(k) Plan will be modified to provide the following benefits:
      • Employees who are not currently contributing to the $uper $aver Plan will be automatically enrolled into the plan in 2012 at a pre-tax contribution of 3% of eligible compensation per payroll period. Employees will have an option to increase or decrease the contribution election
      • American will match your Before-tax and/or Roth 401(k) contributions to $uper $aver on a dollar-for-dollar basis – up to 5.5% of your eligible compensation
      • To modify your contribution, access your account at www.retireonline.com or contact JPMorgan at 1.800.345.2345
    Planned Benefits Changes for all American Airlines Employees
    The company’s desire is to provide all employees with a common set of health benefits options. Additional detail and information regarding these planned changes is available in the Restructuring Resource Center on Jetnet. Final information about these benefit changes, and the implementation plan, will be available at a later date.

    For Additional Information
    More information on these changes as well as a high-level report of employee feedback can be found on the Restructuring Resource Center on Jetnet and at www.RestructuringAMR.com. As always, if you have questions, please reach out to your local management team.

    Because this document is a high-level summary of changes, it does not create any rights and the official plan documents and company policies not affected by these changes, as amended from time to time, will continue to govern.

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