The flight attendant who runs the ‘Flight Service Official’ Facebook page made up of American Airlines employees says the group’s number one question is whether they’ll “ever see profit sharing numbers competitive with other airlines like Delta and Southwest.”
American’s President Robert Isom lays out in a Crew News Q&A session that their profit sharing is a 5% pool of pre-tax profitability. However,
- American’s profit is down year-over-year so profit sharing is down
- American made less money last year than Delta, so profit sharing pays less
- American pays out a lower percentage of profits than Delta as well (Delta is paying 10% of pre-tax profits up to $2.5 billion then 20% after that).
Of course American “layered on profit sharing” outside of collective bargaining. They’ve unilaterally increased wages about 4%, too. All without asking for anything back from their unions.
Delta on the other hand is largely non-union. As JP Morgan’s Jamie Baker pointed out “it still takes considerably more American employees to get the job done than at Delta.” American’s costs are higher regardless of comparable pay or not.
American should offer to match Delta on pay and profit sharing on equal terms with Delta. That means they have to solve their separate work forces. It also means they need to provide the level of service that Delta offers. And getting there will take both leadership and work rule changes that American’s unions will never agree to. They want a less efficient work force that makes more.
but “culture”, no seat back AVOD (and paying money to rip it out of LAA planes), tiny bathrooms (which are antagonizing their employees already) are going to make AA competitive with Delta et al. I find it hilarious that AA knows they have to keep seat back AVOD on JFK-LAX/SFO but then at the same time they think the “future” is streaming to watch a movie on your iPhone. Hmmmmm??? They’re all about CHEAP. Look at Delta and they give the customer the choice in how they want to consume IFE.
@Gary Re: your flippant statement “they want a less efficient work force that makes more”: The inefficiencies mentioned by JPMorgan’s Baker on the earnings call have to do with AA still effectively running two airlines many years post-merger because they haven’t merged certain tech systems and employee scheduling. That seems to be the primary reason for more AA employees vs Delta per capita. The flight attendants can’t fix that — management must resolve it. Why blame the flight attendants? What is it that AA flight attendants want that you think is wasteful and ‘inefficient’?
I’m both pro-union and anti-union because I’ve seen both unions as bad actors and greedy (i.e. pilots) and I see unions as good for collective bargaining (i.e. teachers).
However, if the unions wanted profit sharing that was similar to DL, they should have asked for it during negotiations. The fact that AA corporate is giving MORE than required, is amazing in my opinion.
@Rick – the only way you ask that question is if you work for AA. As a EXP on AA and DM on Delta, I can tell you that the attitude and service levels of the flight attendants are worlds apart. There are some bad apples on DL and some exceptional FA’s on AA but as a passenger I would prefer the way front line DL staff interact with me much better than AA. Just a comment on the FA’s – no comment on pay or profit sharing or any of that.
Gary nailed it. AA’s employees want Delta’s benefits without working to earn them. And, that will never change…..it’s part of AA’s employee culture.
Arriving at American from USAIR Parker promised employees they will be the highest paid in the industry. Parker cannot be trusted just ask any active employee or retiree!.
Great post Gary. So true, unions have obliterated the US education system and are laying siege to AA. The culture is very different at Alaska where I now choose to fly. AA lost me with corporate decisions and hit-or-miss Far.
Is a pre departure beverage really that hard to get your staff to do consistently? Unions are blocking too many changes.
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