AMR’s American to Close Pilot Base

American Airlines will close a crew base in San Francisco after unusually large numbers of pilot retirements left staffing levels “critically short.”

The action comes three days after American said it would cut fourth-quarter seating capacity by 3 percent, in part because of the pilot shortage. In September and October, 240 pilots retired.

The retirements are putting new pressure on American, the third-biggest U.S. carrier, to conclude negotiations with pilots on a new contract. The Allied Pilots Association has said it won’t waive scheduling rules to help ease the staffing shortage without a new labor agreement.

“The recent surge in retirements has left our manning levels to be critically short to the detriment of our schedule reliability,” John Hale, vice president for flight for AMR Corp. (AMR)’s American, said in an e-mail to pilots about the base closing. The decision “was not made lightly and comes with much regret and only after intensive discussion and strategic analysis.”

American hasn’t set a date for closing the base, and is seeking an agreement to shorten a six-month notice requirement in the current pilot contract, said Missy Cousino, a spokeswoman for the Fort Worth, Texas-based company. About 270 of American’s 8,700 pilots are based in San Francisco.

‘Aggressive Steps’

The closure is among “aggressive steps” the airline is taking to improve its financial performance, Cousino said. It “will save us a significant amount of money and will help streamline our pilot operation,” she said.

American and pilot union negotiators are meeting this week at an undisclosed Texas location in an effort to reach a contract agreement, union President Dave Bates told pilots late yesterday. Bargaining will continue through the weekend, he said.

“Recent events such as the spike in pilot retirements, volatility in the trading volume and price of AMR shares and the additional capacity reduction for the fourth quarter have created a sense of urgency,” Bates said. “The current environment may well represent our best opportunity to date to conclude bargaining.”

American said Oct. 10 it would cut fourth-quarter seating capacity by 3 percent and ground as many as 11 jets in 2012 because of the retirements, higher fuel costs and a weak economy. The reductions will increase the airline’s cost to fly each seat a mile beyond earlier forecasts, the company said.

Talks between the airline and Allied Pilots Association began in September 2006. American also is in contract negotiations with unions for its flight attendants, mechanics and baggage handlers.

To contact the reporter on this story: Mary Schlangenstein in Dallas at maryc.s@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net

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