a step in the right direction by mgt.
ACA ANNOUNCES SALARY AND BONUS PLAN REDUCTIONS
Salary reductions of 10% for Senior Officers, VPs and Directors and 5% for Managers and salaried positions above $30,000 per year will be effective with paychecks distributed on April 15th. The cuts in base salary and bonus plans will affect senior managers the most with reductions in potential cash compensation of 33% for Senior Officers, 27% for Vice Presidents and 16% for Directors. Those salaried positions with a base pay of below $30,000 will not be affected by the pay reductions. Also, no salary will be adjusted to a level below $30,000.
In addition, ACA will also eliminate payouts for the $hare the $uccess and Management Incentive Plan (MIP) programs effective immediately.
In announcing the changes, ACA President Tom Moore said this is a painful, but necessary step as the company begins to reposition itself to become more competitive, “We are facing the worst economic conditions in the history of our company, and frankly, in the history of our industry. With United’s long-term survival now very much in question, we must immediately take every step necessary to ensure that we are capable of continuing on as a viable business—even if our partners are not able to.”
He added, “Although there’s nothing positive about having to reduce salaries, we want to make it very clear that we are consciously reducing management pay first, before it becomes necessary to talk to our frontline employees about any pay rate or work rule issues. Our entire industry is clearly in a crisis mode at this time, and it is up to us to be proactive in order to stay one step ahead. That’s why I am asking every member of our ACA management team to take a leadership role in sacrificing part of their own salary as we work to find ways to avoid the fate that our partners at United are now suffering through.”
ACA has also announced the furloughs of 87 pilots in response to a surplus created by changes in our marketing schedule, reduced utilization and uncertainty in regard to our aircraft delivery schedule. ACA will be announcing additional cost-reduction measures in the coming weeks.
Tom Moore added, “We are not at all pleased to be in this position, and we waited as long as possible to see if these moves were avoidable. But we now know they are not. However, I sincerely believe that if we bring our expenses into line with the lowest-cost providers among all regional airlines, we will give ourselves the best possible chance to ride out this low point in our industry. I assure you this will not be easy, but we can do it if we all continue to work together.”
