As American Airlines fought a tough labor dispute with flight attendants last September, its parent company’s directors were meeting in Paris, dining at the opera house and sleeping at the Ritz.
Five months later, the Paris board meeting is a lightning rod for union representatives trying to insulate pilots and flight attendants from American’s revenue losses and proposed $750 million in labor cuts.
“It strikes us as excessive and anyone with a modicum of common sense would ask if this is appropriate when you’re simultaneously asking for concessions,” said pilots’ union spokesman Gregg Overman.
Based on information from hotel personnel and flight and ground crews in Paris, the union estimates the Paris meeting of the 13-member board cost more than $1 million.
American’s parent company, AMR Corp., says the figure is “outrageously overstated” but refuses to put a price tag on the Paris trip.
“This is something the union is using to try to dispel our very real need for long-term cost savings,” AMR spokesman Al Comeaux said. “We have a meeting like this every year. It’s never been raised before but it’s become an issue now that we’re in contract negotiations.”
Contract talks with the pilots’ union have been under way since July with no resolution in sight. Arbitration hearings to resolve a two-year contract dispute with the flight attendants began last fall and are expected to continue into spring.
Comeaux confirmed that the fourday Paris meeting of board members and their spouses was held at the luxurious Ritz hotel and included two chartered jets to London and Frankfurt, Germany; a trip to Normandy using special train cars; and a private dinner and performance for more than 300 customers and political contacts at the old Paris Opera House.
“There was nothing especially lavish or unusual about the Paris meeting. They’re in negotiations now and this type of thing is just to be expected,” said Dee J. Kelly, a Fort Worth, Texas, attorney and member of the AMR board since 1983.
Overseas directors’ and shareholders’ meetings are not unprecedented, according to John Nash, president of the National Association of Corporate Directors. “Anybody who does business internationally often meets at one of its facilities overseas,” he said.
But it is the apparent lavishness of the Paris trip that aggravates union representatives, who contend that AMR board members stayed in suites at the Ritz and that chairman Robert Crandall was lodged in the hotel’s Imperial Suite.
The Imperial Suite costs $9,800 per night, while a one-bedroom suite rents for $5,000 per night and a regular double room goes for $850, according to Ritz employee Lorenzo Amaglio.
Comeaux said retail estimates are not a fair gauge of AMR’s actual costs.
“They don’t reflect the discounts,” he said. “We’re a travel industry customer - we book 3 million rooms a year.”
Paris is the airline’s second-largest international market, said Comeaux, and board members were there to “wave the corporate flag.” Comeaux and Kelly would not comment on union claims that the board spent just one day in business meetings.
As for the chartered jets, Comeaux said they carried board members to connecting flights.
Even if the Paris trip was free, industry analysts say it sends the wrong message, especially when AMR contends in contract talks that it must reduce overall corporate expenses by $1 billion to stay afloat.