American Airlines this week reported an $81 million profit for the first quarter of 2007. "While we must continue to improve our financial performance, we believe our results show that we have started 2007 on the right track," said the CEO, Gerard Arpey.
Judging by the numbers, Wall Street and the American Airlines front office clearly have good reason to believe that. Airlines need to make money, so that's good.
But don't try spinning the joy to a lot of American employees, who are disgusted because just as the airline's fortunes began improving, the bosses decided to pay bonuses totaling about $180 million to about 1,000 top executives and managers.
Many of American's 20,000 flight attendants, for one group, are furious, and set up protest lines at 16 airports last Tuesday. So was the Allied Pilots Association, representing American's 12,000 pilots, many of whom declined to wear their hats all week in a silent protest. The reason: While American's brass were high-fiving each other and handing out bonuses, the rank and file work force, which numbers about 80,000, were rather rudely reminded of the $7 billion in total wage and benefits givebacks they submitted to in order to keep the airline going over the last four tough years.
The givebacks "are largely responsible for American's return to profitability," the pilots union president, Capt. Ralph Hunter, said, adding:
"Four years ago, American Airlines stood on the verge of bankruptcy. Four years ago, 80,000 employees stood up and made the right decision to save their airline. And four years ago, AMR management [AMR is the parent company of the airline] nearly threw away all that effort when it was discovered that senior managers had been protected with special compensation packages. The 2003 executive-compensation scandal resulted in a management shakeup and the resignation of then-CEO Don Carty. We thought management had learned a lesson from that near-tragedy. Apparently, they have not."
Gradually, the domestic airline industry is returning to profitability, with a much reduced and greatly demoralized work-force. Pissing them off further would seem to be self-defeating, and a good way to piss off disgruntled workers who have eaten big pay cuts is to start handing out atta-boy and atta-girl bonuses to management.
My guess is we'll be hearing a lot more, and soon, from the pilots, flight attendants, mechanics and others who keep the planes flying at American and all the other airlines. Their views are welcome in this space.