Union Requests 30.5% Raise, Signing Bonuses
Pilots at American
Airlines say the pie has grown bigger... and now it's time to ask
for a larger slice. On Thursday, the Allied Pilots Association sent
its request for a significant bump in pay, plus other benefits, to
management at the world's largest airline.
The Dallas Morning News reports pilots are asking for a 30.5%
pay raise effective May 1, 2008 -- as well as a pair of five
percent increases over the two years after that, plus signing
bonuses -- to compensate for cuts the pilots took in 2003 in
order to keep the airline out of bankruptcy. APA estimates the
raises would cost the airline an additional $450 million per year,
along with a one-time $400 million expense for the signing
bonuses.
One union official told the DMN those costs could be offset by
"fairly minimal" fare increases... but the airline isn't so sure. A
spokeswoman for American said the pilots' pay request had to be
balanced with American's overall labor costs, which she stated are
higher than other carriers'.
"Like everything that is proposed during negotiations, APA's pay
demands will be brought to the table for full discussion and a
robust review by the bargaining team," aid Sue Gordon, a
spokeswoman for the Fort Worth-based airline. "It's common
knowledge that we have a considerable labor cost disadvantage
compared to other airlines, so we'll need to balance any proposal
that affects our competitive position against this fact."
"We also recognize that our pilots are concerned about achieving
competitive total compensation," Gordon added.
Pilots at American took a 23 percent pay cut four years ago.
That contract -- which pays pilots $136,000 per year on average,
according to the airline -- is due to be revisited next May.
American posted a $231 million profit for 2006, its first annual
profit since 2000, despite record-high fuel prices.
APA President Ralph Hunter notes executives and management at
American have already benefited from the upswing in the carrier's
fortunes. As Aero-News reported, the
union was outraged when several executives earned large bonuses and
stock options, which the APA values at more than $160 million.
"Other American Airlines stakeholders have already recovered
their investment in our airline's turnaround," Hunter said. "It is
time for our pilots to begin doing the same."
One American pilot was a bit more blunt on why pilots feel
they've earned the raise.
"We honestly believe that it's fair and reasonable and very
easily justifiable," said pilot Scott Shankland. "We've laid it out
on the table. We've said this is what we know our pilots expect.
It's a reasonable proposal, especially compared to the way they
[American's executives] have been acting like pigs at the
trough."