In Part I of this two part series, it was illustrated how management used a completely different methodology in 2003 to support their claims for concessions valued at $660 million or 31% of the total pilot contract. If they used that same methodology today it would not support near the amount of concessions they are seeking, which ironically is once again another 31% of the total pilot contract.
Part I was not just based on a competitive contractual comparison of contracts but a comparison meeting all the elements to determine management’s goal of a “new generation” carrier, in essence – Delta (DAL). There is no greater example in the industry of “new generation” than DAL. It has been through bankruptcy; it’s pilot contract is competitive; it’s profitable and it is well managed. It’s what American Airlines was the last time it was managed by a seasoned leader, Bob Crandall, an industry leader.
As compared to their peers at other carriers who have ratified the most recent contracts in the industry, the pilots of American Airline’s are compensated at less than competitive pay rates, but how do the rest of the employee groups at American Airlines compare to a “new generation” carrier?
Three elements of the current industry pilot contract landscape are essential for understanding the premise of this discussion...
- UAL, CO, US and AW have not concluded new agreements in over six years. All are expected to do so sooner rather than later.
- AK, HA, Spirit, Jetblue, and Frontier are niche players.
- Best compensated SWA is treated as an outlier and therefore excluded from this discussion.
It was shown in Part I that American’s pilots are currently paid between 5.6% to 9.6% less than DAL pilot pay rates on the 767 and 737 respectively. As shown on page 13 of the Delta Pilots’ Contract Comparison, 777 Captains at American make 10.2% less than a 777 DAL Captain, $226 an hour for a DAL 777 Captain and $205 an hour for a American 777 Captain.
How do other employee groups stack up?...
Looking at the APFA Fight Attendant Hourly Pay Rates, American’s flight attendants are paid slightly higher rates than DAL flight attendants, $46.00 an hour domestically for American’s flight attendants and $45.73 an hour domestically for DAL flight attendants.
Also looking at the TWU Fleet Service Hourly Pay Rates, American’s ground workers are paid slightly higher rates than DAL ground workers. American ground workers make $21.16 an hour and DAL ground workers are paid $21.00 an hour.
In both cases, the flight attendants and ground workers are compensated at the top of the industry...
Only SWA pays higher wages for ground workers while only SWA and Continental pay higher wages for flight attendants. If SWA is excluded for the other employee groups, as was done in Part I for pilots, American’s ground workers are the highest paid in the industry and only Continental’s flight attendants make more than American’s flight attendants.
In sharp contrast with the other employee work group wages above, pilot wages at American trail not only SWA and DAL but also AK and HA, the most recent pilot contracts ratified in the industry. American’s pilot rates also trail many of the particular aircraft pay rates at CO.
Executive base pay rates tell an identical story…
When looking at executive base rates, even American Airline’s management exceeds DAL management’s base rates. The AMR CEO's base salary for 2010 was $669,646, the last year of available data (AMR filed bankruptcy on November 29, 2011 and there is no full year data available). Even Mr. Horton’s former base salary of $618,135 for serving as AMR’s President prior to assuming the CEO role in 2011 was higher than Delta CEO’s 2010 base salary of $600,000.
*Note: It is reported that Delta CEO Richard Anderson’s base salary remained $600,000 for 2011 while former AMR CEO Gerard Arpey’s base salary would have been approximately $670,000 for 2011.
Every employee group at American EXCEPT PILOTS exceed the base pay rates at the one true “new generation” carrier, DAL…
Why should American Airline’s pilots be the only employee group at AMR to have base pay rates less than the true new generation carrier? Why would the pilots of American once again agree to give a disproportionate share of concessions—like they did in 2003—when they would be the only employee group to trail new generation wages even though they are willing to make the other required changes to the their contract? Why would the pilots of American Airlines ever agree to anything other than fair and equitable treatment of all employees, including the pilots, like Mr. Horton stated in his February 1, 2012 letter?
Is AMR management really seeking a “new generation” pilot contract?...
Are they really treating the pilots fairly and equitably as compared to the other employee groups, including themselves? Or...could it be that AMR’s Finance and HR department management is taking advantage of a crisis to exact punitive retribution in a campaign against its pilots?
