American Eagle’s goal is to restructure our labor costs across all work groups in order to emerge from restructuring as a profitable and successful company, with costs that are in line with the most competitive large regional airlines.
Some of the changes we are considering implementing for our Agent, Management and Support Staff employees are similar to changes proposed to our represented employees – such as eliminating the accrual of a fifth week of vacation. Others will vary by workgroup, in order to reach that group’s necessary cost reduction target.
We have just begun the negotiation process with our unions to make changes to our collective bargaining agreements, but continue to evaluate the pay, benefit and work rule changes that will be needed for our Management, Support Staff and Agents. We hope to have more information to share in the coming weeks. We do not plan to implement changes for non-represented employees until we reach agreements with our unions.
Annual Cost Savings Target for Agents: $2.0 Million
Annual Cost Savings Target for Management & Support Staff: $7 Million
In addition to the pay, benefits and work rule changes we are evaluating for all non-represented employees in order to reach the total labor cost reduction targets, we are also completing a thorough redesign of the management and support staff team, in order to streamline the organization, improve efficiency and lower costs. As part of this effort, we will be identifying the ideal number of “layers” within the company, as well as the “span of control” – i.e., the appropriate number of employees reporting to each manager.
We anticipate that this redesign will result in a reduction of approximately 10 percent of Management and Support Staff positions. Some of these reductions have already taken place, but the remainder will be accomplished gradually over the coming months. Because we plan to take full advantage of currently vacant positions as we reorganize, we do not yet know the exact impact on our people, but expect to have more information to share with employees in the coming weeks.
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