Says Concessions Aren't Enough To Save World's Biggest Airline

The former chief of American Airlines' pilots union says the carrier may not survive -- at least not in its current form.

Reuters reports that, on his way out as leader of the Allied Pilots Association, John Darrah sent a 15-page letter to the rank and file, saying, "Without fundamental changes from management, your leadership realizes that American Airlines may still not survive long term in its present form."

Darrah and other union leaders negotiated $1.8 billion a year in concessions to American, staving off bankruptcy in the short term. Now, he's not so sure that did much good in the long run.

"We all realize the problem is not labor, but instead how this airline is operated," he said.

While Darrah said he's seen some positive changes at American, but that "in the first year of our agreement, AMR's financial returns are nearly $1 billion less than what they had forecast in the model used for concession talks."

Indeed, American spokesman Tim Wagner indicated the company was quoted by Reuters as saying the carrier asked its unions for the least possible amount as it courted bankruptcy last year. Still, Wagner said, there are no plans to go back to the unions and ask for more concessions. The current contracts between the world's largest airline and its unions run until 2008.

FMI: www.amrcorp.com