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American Airlines pilots outraged over upcoming executive bonuses - 1/20/07 |
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Saturday, 20 January 2007 |
American's April 2007 bonuses could reach $219M
. The "Shared Sacrifice" is alve and well. Employees need to keep pulling so that management can win.
Wednesday, January 17, 2007
American Airlines pilots outraged over upcoming executive bonuses
By Pegasus News wire
FORT WORTH — The Allied Pilots Association, collective bargaining agent for the 12,000 pilots of American Airlines (NYSE:AMR), expressed its outrage over executive bonuses scheduled for payout in April that could match or even exceed the airline’s fiscal year 2006 net profit of $231 million announced today by parent company AMR Corp.
Based on yesterday’s closing price of $40.23 per share for AMR stock, the April bonuses will total some $218 million. The exact amount of executive bonuses depends on the price of AMR stock on April 18. A disproportionate share of those payouts will go to a select group of around 50 senior executives.
“It’s clear that American Airlines’ financial performance has improved substantially, thanks in large measure to the deep sacrifices by our pilots and other employees beginning in 2003,” said Captain Ralph Hunter, APA President. “The $1.1 billion improvement in AMR’s results would not have been possible without the $1.6 billion in annual concessions agreed to by AA non-management employees, who are the real heroes behind American’s return to profitability. While line employees are still carrying the burden of these massive cuts in pay and benefits, it is insulting for senior managers to be receiving a windfall that may equal or exceed all of our airline’s earnings in 2006.
“It is particularly egregious to pay large bonuses when our airline has been experiencing such serious operational problems. What we have today is a small set of underperforming managers whose personal financial recovery is out of line with American’s troubled performance in the field. Aren’t bonuses normally paid for a job well done?”
Hunter cited the widely publicized incidents that occurred on Dec. 29, 2006 — such as American Airlines Flight 1348, which sat on the tarmac in Austin, Texas for some eight hours with no food or water and overflowing toilets before the Captain elected to taxi to the terminal, despite on-duty managers’ refusal to provide a gate — as symptomatic of a management team more concerned with its compensation than with improving the airline’s lagging operational performance. According to an article last week in The Wall Street Journal about this and similar incidents aboard various American Airlines flights that day, “This wasn’t a story about the “perfect storm,” but about corporate cultures that don’t put customer service first.”
According to Hunter, when APA contacted management to ask how it planned to prevent such operational miscues in the future, management justified its performance by noting that no one was hurt on Dec. 29.
“Safe transportation is the absolute minimum our passengers expect and deserve. Not injuring anyone is a wholly unsuitable measure of success,” Hunter said.
“Management’s recent decision to amend its application for DFW-Beijing service to include a Chicago stopover on the outbound leg is another indication of misplaced priorities,” Hunter said. “The China route award was within American’s grasp, yet management made little more than superficial attempts to negotiate the necessary pilot contractual provisions to make it happen. Management gave away a profitable route by rejecting a fair and reasonable APA proposal that would have cleared the way for American Airlines to win the Dallas-Beijing route award.
“This outcome is particularly inexplicable in light of the fact that APA’s proposal was actually less expensive than the amended route proposal management ultimately submitted and the DOT rejected. We still fail to see the business case behind management’s decision to abandon negotiations with its pilots, withdraw its application for a valuable new international route and forgo hundreds of millions in additional revenue for both the airline and the region.
“Management’s recent decisions are costing American Airlines millions in lost opportunities. They should stop rewarding themselves for their failures.”
Source: Allied Pilots Association
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