Thursday, June 12, 2003

"Good afternoon.

Today we will receive testimony from those most affected by the fall-out from the integration of American Airlines and the former TransWorld Airlines.

What we will hear is a story of how the once-promising combination of two airlines turned into a disaster for so many former TWA employees.

Over the last two years we have seen the promises turn into pink slips .... today is our first opportunity to hear directly from all sides.

We have several goals:

* First, we intend to get to the bottom of what promises were made;

* Second we need to give former TWA pilots and flight attendants the opportunity to tell their own story;

* Third we want to hear from American Airlines and their unions and learn their positions and perspectives

In summary we want to know why the former TWA flight attendants and pilots never received comparable seniority status at American Airlines that was promised to them.

These are important and painful questions for many families in Missouri and around the nation. I thank the leadership of this Committee for their willingness to hold this hearing, in particular I thank Chairman Gregg for allowing me to chair today's hearing.

Senator Kennedy, I also thank you for the courtesy you and your staff have shown me as we have prepared for this hearing.

Finally, I recognize my friend and colleague from Missouri Jim Talent, who, although not a member of this Committee, joins us today.

All of us on this Committee–indeed all of us in the Senate–understand how tough the times are right now for our nation's airlines. We understand how cutbacks in personnel, as well as cutbacks in other expenses have been needed in order to keep the Airlines in the air.

Unfortunately, we have seen in Missouri, that when it came time to cut at American Airlines, that the blade fell almost exclusively on the former TWA workers including pilots, flight attendants, baggage handlers and ground crews.

As most of you know, on April 9, 2001, American Airlines closed an asset acquisition deal ending a 75-year run of TWA as an independent operation. At that time I was a committed supporter of the acquisition, and pledged to all parties that I would do whatever I could to help.

Thus I was very pleased to hear the testimony of former American Airlines CEO Don Carty before the Senate Commerce, Science and Transportation Committee and when he stated:

"We look forward to adding TWA’s 20,000 employees to the American Airlines family. We are keenly aware of TWA’s illustrious history and know that were it not for the hard work and great performance of the people throughout TWA, they would not be the perfect fit for American that we believe they are. We also recognize what a good corporate citizen TWA has been in the state of Missouri and I can assure you that our company will be as well."

Now, in the lead up to the Bankruptcy Court approval of American's acquisition of TWA assets, a number of good faith steps were taken by TWA. In particular, TWA at the request of American, agreed to enter into bankruptcy in order to shed some of it's other obligations. TWA employees, particularly the pilots and flight attendants represented by their respective unions, agreed, again at the request of American, to waive the Allegheny Mohawk provisions in their contracts in exchange for written promises and assurances from American Airlines that they would be integrated fairly into American's workforce.

The Allegheny Mohawk provisions in their contracts guaranteed TWA pilots and flight attendants the option to have their integration into any purchasers's workforce decided by an independent neutral third party, provided no agreement on integration could be reached between TWA's and the purchasers's unions. According to the provisions, this independent arbitration would be binding.

These steps were taken with some risk to TWA and their employees. But in the interests of integrating the two airlines quickly and smoothly, the TWA pilots and flight attendants in good faith placed their trust in assurances made to them by American Airlines — it's management and unions.

It is precisely what was conveyed by those assurances, who made them, and why they were needed that is the heart of the matter before us today.

In particular in a letter dated March 17, 2001, American Airlines assured the TWA pilots that it would:

"USE ITS REASONABLE BEST EFFORTS WITH ITS LABOR ORGANIZATIONS REPRESENTING THE AIRLINE PILOTS CRAFT OR CLASS TO SECURE A FAIR AND EQUITABLE PROCESS FOR THE INTEGRATION OF SENIORITY."

Since then, and in the wake of the airline industry slump following the 9-11 attacks, it is crystal clear that those "best efforts" were not good enough.

The simple fact is that there was no significant integration of the seniority lists. The flight attendants and most pilots were simply stapled to the bottom of the seniority lists. And when the cuts came, they came from the bottom up.

The result– 60 percent of all former TWA pilots were stapled to the bottom of the seniority list at American Airlines.

Of the 40 percent of TWA pilots who were integrated more than half of those pilots – ABOUT 400 FLIERS – were actually slated for mandatory retirement before the integration actually took place.

And for those few TWA pilots that did make it, they were given seniority far below their counterparts of equal experience. For example, the senior-most former TWA captain, hired in 1963 was integrated into the same bracket as a 1985-hire American captain. The result is that many former TWA pilots with much more flying experience and cockpit seniority actually have a lower seniority rank than the First Officer sitting in the co-pilot seat next to the actual pilot. And ultimately, most of those former TWA pilots are now out of a job, including many of my friends here today.

However, as poorly as the pilots were treated, it has been much worse for TWA's flight attendents. As of July 2, 2003 100% of all former TWA flight attendants will have been furloughed by American Airlines — That's nearly 4,200 employees.

Let me repeat that. 100% furloughed. 4,200 employees.

"Best efforts" indeed.

And because of this, I and others attempted on numerous occasions to reinstate the concept of "fair and equitable".

On October 1, 2001 I introduced S. 1479, the Airline Workers Fairness Act, with four of my colleagues in the Senate. The following day my colleague from Missouri, Congresswoman JoAnn Emerson introduced the same legislation in the House. The House bill had 31 cosponsors.

Late in October I organized a marathon meeting between the APA and ALPA here in Washington, DC. The meeting lasted more than 36 hours, but a resolution to the integration issue was not achieved. Many of you here in this room participated in that meeting.

In December of 2001 I offered the Airline Workers Fairness Act as an amendment to the Department of Defense Appropriations Bill. The amendment was adopted in the Senate, but the provisions were removed in the Conference with the House.

On January 31, 2002 I sent a letter to Chairman of the National Mediation Board Frank Duggan supporting the response filed with the Board by the ALPA in opposition to the determination that American and TWA had achieved "single carrier status."

On February 14, 2002 I sent another letter to Chairman Duggan supporting the International Association of Machinists and Aerospace Workers on behalf of TWA flight attendants in the Board's determination of whether TWA and American had achieved "single carrier status."

Again this year, Senator Talent and I have been exploring legislative options, including a revised version of S. 1479 ... and we continue our efforts in this regard.

It is clear to anyone who has watched this painful process over the past two years that lives have been disrupted and in some cases destroyed by what has transpired. Jobs lost, promises not met, anger, disillusionment and despair replacing the feelings of hope and sense of opportunity that the initial TWA-American announcement was greeted with.

Nothing we say or hear today can put the genie back into the bottle. We cannot repair the relationships or restore the trust, but we can lay out the facts, and perhaps learn enough that no other family or employee will face this travesty again.

I appreciate all of you who have agreed to testify today. In some cases your testimony may open old wounds that you may wish to have left alone. But if we are to get the facts, we must hear your personal stories, and must have the opportunity to question those who made the promises.

Frankly, I am disappointed that neither Don Carty or Bill Compton are here today. I worked with both extensively, developing admiration and respect for them. To be honest, I trusted them, as did their employees. We invited both as they were certainly intregal to the agreements that created the acquisition. But their absence does not lessen my interest or ability to get the full facts on the table.

So again, I thank all of you have agreed to be here, and I give you my assurance that while my questioning will be thorough, it will be courteous and fair."