Unions say airlines use crisis to deny benefits

Severance suspended for thousands facing layoff by American


Labor-management relations in the airline industry, rocky before Sept. 11, have grown rancorous, with unions enraged at what they say are moves by several carriers to use the national emergency to deny pay or benefits to workers idled as air travel stalls.

American Airlines, a unit of AMR Corp., said yesterday that the airline's finances had been hurt so badly by the terrorist attacks that it could not afford to pay severance benefits to the thousands of workers it planned to lay off.

Union officials quickly criticized American, asserting that the least the airline could do after Congress approved a bailout was to make good on its commitments to its workers.

"It's outrageous that American would ask the workers to support them on getting this massive federal bailout and then turn around to slap the workers in the face by failing to honor its commitments," said Edward Wytkind, executive director of the Transportation Trades Department of the AFL-CIO.

Karen Watson, a spokeswoman for American, insisted that the company was merely invoking an emergency clause that she said allowed the company to suspend certain commitments under extreme circumstances.

"The reason for using these provisions is because of the dire financial condition of the industry," Watson said. "We're furloughing 20,000 employees because of the 20 percent reduction in our flight schedule, which of course occurred suddenly. Right now, the issue is the survival of the company."

Several union officials and airline workers, meanwhile, said that UAL Corp.'s United Airlines was leaving some workers in limbo by not calling them to work, yet not laying them off. US Airways, they said, was relying on an emergency clause to override a no-furlough language in some union contracts.

Since the terrorist attacks Sept. 11, which grounded aircraft for days and have left airlines running reduced schedules of half-empty flights, the carriers have announced plans to eliminate nearly 80,000 jobs.

Delta Air Lines Inc. has scheduled a news conference today, where it is expected to announce more than 10,000 layoffs.

Watson, American's spokeswoman, declined to say how much the airline would save by not paying severance. Union officials put the savings at tens of millions of dollars.

The laid-off workers generally will qualify for unemployment insurance. The airline's plan to withhold severance benefits was first reported yesterday by The Los Angeles Times.

Some union officials said that they would ask Congress to enact a law requiring American to make good on its severance commitments as a condition for receiving its part of the $15 billion in cash and loan guarantees approved by Congress and signed by President Bush last week.

Dissatisfied that the bailout bill did not provide any protections for airline workers, union officials also want Congress to enact an additional 52 weeks of unemployment insurance for laid-off aviation workers, above and beyond the 26 weeks that is typically provided.

And they want Congress to guarantee at least 12 months of federally financed health insurance for laid-off airline workers.

On Monday, Donald J. Carty, American Airline's chief executive, said he would take no pay for the rest of the year and urged American employees to agree to voluntary cuts in pay. Last year, according to the airline's proxy statement, Carty earned $772,500 in salary plus a bonus of $1.3 million.

Union officials complained that United was invoking an emergency clause for October, telling many employees they would have no work and no pay for several weeks next month, although those workers would not be officially laid off.

While unhappy with this development, union officials voiced less anger at United's approach than American's, because they said United apparently was trying to weather October with as few long-term layoffs as possible.

Pat Friend, president of the Association of Flight Attendants, said US Airways had invoked an emergency clause to skirt no-furlough provisions in the company's labor contract. US Airways executives acknowledged that they were relying on the emergency clause. However, US Airways said it would fulfill severance obligations.

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