Sunday, February 26, 2012

Premium Pay or Empty Bag?

Management has proposed the following language for premium pay for pilots:

“Replace current premium pay provisions with a single premium rate of fifty (50) percent (total is base rate plus fifty (50) percent of base rate) on Company designated sequences. If sick anytime during the month, sick bank hours will be replenished before premium is paid as additional compensation.”

Once again, management doesn’t seem to understand how an airline operation actually works. Even their attempt at providing an incentive becomes punitive. Management proposes a provision to enhance the productivity of pilots like other carriers have but, unlike other carriers, in addition, they attach a punitive provision to it. They just can’t seem to help themselves. They have to be punitive.

As part of this 1113 process, management has expressed their intent to increase the productivity of American Airline’s pilots. Beyond any doubt, American’s pilots will be more productive at the end of this process. Many carriers such as Delta, Jetblue, Continental and Alaska already have provisions in their contract to incentivize their pilots to fly more hours when the Company is in need of pilots to cover the schedule. At Delta, pilots are paid 200% of their base rate for premium pay. Jetblue pilots are paid 150% for any hours above 78 and for flying on days off or holidays and Continental and Alaska pilots are paid 150% of base pay for premium pay. Not a single one of these carriers however, attach any punitive provisions to their premium pay provisions. Is it any wonder that American couldn’t get a deal with its pilots?

In certain instances under management’s 1113 proposal, they intend to pay pilots who call in sick 60% of their base rate for sick. Under the proposal shown above, they propose a premium pay provision to entice pilots to pick up additional flying at times the Company finds themselves short of pilots to fly its schedule. Specifically, they propose to pay pilots 150% of their base rate on selected sequences (trips), but if a pilot has called in sick for the month they will use the time to fill up their sick bank instead of paying them.

If a pilot has called in sick during the month their time for the premium sequence will be placed in the pilot’s bank at presumably 150% of the time of the sequence (details yet to be explained). But, if the pilot is paid at 60% of pay for calling in sick in the future for a sequence the pilot is only actually paid 90% (150% times 60%) of pay for flying this premium sequence. What pilot would bother picking up this premium sequence under this scenario? What pilot would pick up a premium sequence if they had called in sick during the same month if they won’t get premium pay? The answer is a resounding, “nobody!”

Did they really mean to propose paying less than normal pay as an incentive?

As virtually every other airline management understands, the only reason to offer premium pay is to incentivize pilots who would not normally fly to do so for extra money. However, under AMR management’s proposal, they offer premium pay but then have a provision that would pay pilots even less than normal pay. In the very proposal in which they are trying to build incentives to operate the future schedule of the airline, they can’t resist putting in a provision that has precisely the opposite effect. Do they even understand their own proposal?

As each of management’s proposals are scrutinized, it becomes quite apparent that there is some sort of deep-seated animosity driving their 1113 proposal. Provision after provision contains punitive elements.

One provision after another is cherry picked from other carriers for the negative aspects while the positive aspects of those carriers’ same provisions are ignored. There is no consistent comparison amongst the “new generation pilot contracts” or even fair and equitable treatment between employee groups. Instead, these proposals take the form of a management team singularly focused on exacting punitive retribution from their most highly skilled employees.

Is Mr. Horton really trying to forge a new relationship with his employees? Is the Human Resource department at American Airlines continuing on the same adversarial path they have for the past decade?

Or can they just not help themselves?