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ALLIED PILOTS ASSOCIATION ISSUES DETAILS OF NON-VARIABLE COMPENSATION PLAN
“Our plan will enable our pilots to participate in our airline’s recovery.”
Fort Worth, Texas (May 3, 2007)—The Allied Pilots Association (APA), representing the 12,000 pilots of American Airlines (NYSE: AMR), announced today it has presented a plan for non-variable compensation designed to enable its pilots to share in the airline’s financial recovery. APA and American Airlines management are currently engaged in full-scale contract negotiations in accordance with Section 6 of the Railway Labor Act.
“Other American Airlines stakeholders have already recovered their investment in our airline’s turnaround,” said APA President Captain Ralph Hunter. “It is time for our pilots to begin doing the same.”
Under APA’s plan, the pilots would receive a 30.5 percent pay rate increase on the date of signing retroactive to May 1, 2008—the contract’s amendable date—and five percent annual pay rate increases thereafter. Over a three-year period, annual pay rate increases would average around 17 percent. The plan also calls for signing bonuses equaling 15 percent of each pilot’s total pay over the duration of the negotiations. Management triggered the “early-opener” provision of the current contract on July 21, 2006, marking the start of negotiations.
“Our airline’s management has clearly demonstrated the ability to adapt to higher operating costs in areas such as executive compensation,” he said. “We are confident the same will occur as part of appropriately paying our pilots.
“By accepting large bonuses during each of the past two years, management sent a strong signal to employees that it was time for financial recovery,” Hunter said. “We concur with that assessment.”
According to Hunter, senior executives at American Airlines have seen their incomes rise by more than 80 percent compounded annually since the airline’s consensual out-of-court restructuring in 2003. Shareholder return for AMR stockholders has averaged 90 percent annually during the same four-year period.
By contrast, American Airlines’ pilots experienced immediate pay cuts ranging from 20 to 50 percent as part of the 2003 restructuring, while nearly 3,000 lost their jobs. They continue to earn less than they were before the airline’s restructuring while working substantially more hours each month. Altogether, the pilots have provided $660 million in givebacks during each of the past four years for a total of more than $2.5 billion worth of concessions.
In recent polling conducted on APA’s behalf, the pilots have cited higher pay rates as their top priority in negotiations.
“Our pilots have spoken loud and clear that our next contract must include pay restoration,” Hunter said. “It is a prerequisite for them to ratify a new agreement.”
Hunter also reported that APA and the Southwest Airlines Pilots Association would be co-hosting an industry-wide collective bargaining conference in early June in Dallas as part of a concerted effort to reverse the damage inflicted on the pilot profession during the past several years.
“Pilots industry-wide are committed to pay restoration,” he said.
Hunter further noted that APA would present a separate plan for variable compensation as part of the ongoing negotiations.
Founded in 1963, the Allied Pilots Association—the largest independent pilot union in the U.S.—is headquartered in Fort Worth, Texas. APA represents the 12,000 pilots of American Airlines, including 2,799 pilots on furlough. The furloughs began shortly after the September 11, 2001 attacks. Also, several hundred American Airlines pilots are on full-time military leave of absence serving in the armed forces. The union’s Web site address is www.alliedpilots.org.
American Airlines is the nation’s largest passenger carrier.
“Our plan will enable our pilots to participate in our airline’s recovery.”
Fort Worth, Texas (May 3, 2007)—The Allied Pilots Association (APA), representing the 12,000 pilots of American Airlines (NYSE: AMR), announced today it has presented a plan for non-variable compensation designed to enable its pilots to share in the airline’s financial recovery. APA and American Airlines management are currently engaged in full-scale contract negotiations in accordance with Section 6 of the Railway Labor Act.
“Other American Airlines stakeholders have already recovered their investment in our airline’s turnaround,” said APA President Captain Ralph Hunter. “It is time for our pilots to begin doing the same.”
Under APA’s plan, the pilots would receive a 30.5 percent pay rate increase on the date of signing retroactive to May 1, 2008—the contract’s amendable date—and five percent annual pay rate increases thereafter. Over a three-year period, annual pay rate increases would average around 17 percent. The plan also calls for signing bonuses equaling 15 percent of each pilot’s total pay over the duration of the negotiations. Management triggered the “early-opener” provision of the current contract on July 21, 2006, marking the start of negotiations.
“Our airline’s management has clearly demonstrated the ability to adapt to higher operating costs in areas such as executive compensation,” he said. “We are confident the same will occur as part of appropriately paying our pilots.
“By accepting large bonuses during each of the past two years, management sent a strong signal to employees that it was time for financial recovery,” Hunter said. “We concur with that assessment.”
According to Hunter, senior executives at American Airlines have seen their incomes rise by more than 80 percent compounded annually since the airline’s consensual out-of-court restructuring in 2003. Shareholder return for AMR stockholders has averaged 90 percent annually during the same four-year period.
By contrast, American Airlines’ pilots experienced immediate pay cuts ranging from 20 to 50 percent as part of the 2003 restructuring, while nearly 3,000 lost their jobs. They continue to earn less than they were before the airline’s restructuring while working substantially more hours each month. Altogether, the pilots have provided $660 million in givebacks during each of the past four years for a total of more than $2.5 billion worth of concessions.
In recent polling conducted on APA’s behalf, the pilots have cited higher pay rates as their top priority in negotiations.
“Our pilots have spoken loud and clear that our next contract must include pay restoration,” Hunter said. “It is a prerequisite for them to ratify a new agreement.”
Hunter also reported that APA and the Southwest Airlines Pilots Association would be co-hosting an industry-wide collective bargaining conference in early June in Dallas as part of a concerted effort to reverse the damage inflicted on the pilot profession during the past several years.
“Pilots industry-wide are committed to pay restoration,” he said.
Hunter further noted that APA would present a separate plan for variable compensation as part of the ongoing negotiations.
Founded in 1963, the Allied Pilots Association—the largest independent pilot union in the U.S.—is headquartered in Fort Worth, Texas. APA represents the 12,000 pilots of American Airlines, including 2,799 pilots on furlough. The furloughs began shortly after the September 11, 2001 attacks. Also, several hundred American Airlines pilots are on full-time military leave of absence serving in the armed forces. The union’s Web site address is www.alliedpilots.org.
American Airlines is the nation’s largest passenger carrier.
