During the internal “State Of The Airline” question and answer session following the American Airlines second quarter earnings call (a recording of which was reviewed by View From The Wing) an employee asked about recognition programs about adding in free travel in a way that might cost the company ’80 confirmed tickets per year’. For context, American Airlines flies over half a million passengers per day.
And CEO Robert Isom laid out the reason he doesn’t like offering free travel as a form of compensation for employees – which might be surprising since he leads an airline.
I think it’s also important for us that when we talk about recognition and compensation, you know at the end of the day I’d just love to do everything in dollars and cents to the extent possible. When we use travel in some circumstances to say this is a prize for doing something, you have to realize that it costs the company money – and quite often more than the value that you would ascribe to it.
Let’s face it… If I wanted to buy a flight to Rome non-stop tomorrow, what’s the going rate right now? Probably about $2,000. Unless you feel you’re getting $2,000 I’d rather just go sell the ticket and figure out a different way to compensate and reward and encourage.
So I’m not saying we’d never do free confirmed space travel again, but I do have to tell ya that when we did it for the Air Transport World recognition in 2017 we weren’t talking about a tens of millions of dollars type overhand for the company, we were talking about something that cost hundreds of millions of dollars. So unless we value it that way, we probably ought to figure out a different way.
I don’t want to pour cold water on something, but it’s something I feel strongly about. That travel that we provide to our customers, we charge them a lot. They pay us accordingly. We just have to treat it as though it’s the same thing as money.
In 2017 American Airlines was named Air Transport World Airlines Of The Year and in recognition gave each employee two positive space passes for travel anywhere in the world. Isom, who was the airline’s President when that decision was made (Doug Parker was Chairman and CEO), wouldn’t do that again.
- When someone values the in-kind item more than it costs, provide the in-kind item
- When someone values the cash more than the in-kind item, provide the cash
Taxes sometimes influence this. For instance, we don’t just provide health insurance through employment in a majority of cases in the U.S. (economical to purchase as a group, adverse selection helps explain why Obamacare needs provider subsidies) but also because it’s not taxed the way payroll is.
If the airline wants to provide travel in a way that costs them less than the value consumers and employees ascribe to it, they should consider awarding AAdvantage miles for trips. The miles cost the airline perhaps 72 basis points but can be worth twice that to a traveler (or more).
Years ago I had an employee ask me to consider paying for gym memberships for all staff. I reframed the ask, suggesting to him he wanted:
- Everyone to get an across-the-board raise
- And tell them there was only one way they’d be allowed to spend that raise?
People like stuff for free, but nothing is actually free, and are probably better off most of the time with the monetary equivalent. In other words Robert Isom is right. Of course some people don’t actually want their freedom in practice, or to think about tradeoffs and decisions. So gym memberships and free tickets are better, because they’d like to think that those things are free.
I’d be fine with revoking employee travel. Pilots are compensated at record levels, and the flight attendants definitely don’t deserve/haven’t earned the perk.
Although with gym memberships, you can sometimes get corporate group rates not available to individual consumers, as well as insurer subsidies/incentives that further drive down the cost to employers. (Agree with the underlying point, though – if the employee doesn’t value the benefit at or above cost to the employer, whatever that may ultimately be, you’re better off just providing cash incentives.)
Well, on the bright side, at least there’s a refreshing kernel of truth in Ison’s statement:
The admission that the airline charges its passengers a LOT to travel.
If only the airline provided a modicum of dignity, respect & value for the fares passengers paid instead of screwing them at every opportunity he might be onto something special in the air once again!
As an American Airlines non union employee I make a hard time making ends meet with the pathetic raises I get yearly! Maybe try paying your lower level management employees a higher liveable wage!! I’d get rid of my flight benefits to get more pay as you can’t get on flight anyways and hotels are too expensive!
Treat your NON UNION employees better!!! What a shame!
Yes but a gym membership paid by the company has a true cost probably about 75% of membership (tax and group discount). Isom is wrong to say the free flight costs AA $2000. That is opportunity cost, maybe, but not actual cost. I agree employees may not value at retail travel rates, but it doesn’t cost AA $2k to fly someone and many of these marginal trips wouldn’t result in $2k for AA.
I’m fine with not rewarding positive space travel, it’s a business decision. But it seems disingenuous to talk about spoiling inventory at full retail value. Revenue management will adjust accordingly and few flights are oversold especially due to a few positive space rewards
A company gym membership also provides wellness benefits and likely health improvements.
It’s penny-cheap to call it a “across-the-board raise”
What nobody who’s not in the industry would know is…employees fly as non-rev (revenue) are 100% standby. That means that when the red light on the top and bottom of the jet turn on and you’re standing at the gate watching…you ain’t flying! Non-revenue passengers will NOT bump a revenue passenger. As for the company giving positive space tickets as a reward for performance, those seats are only available at the lowest price seat availability. In other words, if that class of seat price is sold out…you are not flying…positive space or not. Also, non-revenue flights are considered taxable income..what is called “imputed income”. International flights…the departure taxes are charged at the same rate as paying passengers. Some airlines will allow a manager who’s been with the company for a week to “bump” an employee with higher seniority but not a manager. That causes lots of animosity. Some airlines base non-rev travel on seniority… regardless. The airlines WILL provide positive space to employees required to repair AOG and/or repositioning flight and cabin crews that “must fly.”
If the flying public had any clue how much it costs to operate a Jet Aircraft, and the complexity involved in maintaining Aircraft that fly close to 500 MPH, to remain safe, maybe they would respect modern Aviation more. But probably not, the entitled mindset, and get something for nothing attitude that prevails today is all one can think of.
As to compensating employees, cash isn’t always king. RESPECT on the job for what is done is goes a long way. For employee flight benefits, AA needs to ditch the outdated “non-rev” stand by system, and just offer employees “at cost” or deeply discounted positive seat travel. The Non-rev lottery, where you can never know if you will get to or from your destination makes employee travel a joke, not a benefit. An at cost flight ticket that is guaranteed seat would be a neutral for the airline as cost goes, and a huge actual benefit to those who want to travel on their own Airline for their Vacation.
Stop offering flight benefits and see how many employees flee AA. The flight benefit is the entire reason many people work for Airlines. If any airline cut flight benefits it would be American Airlines to do so first. The unions would fight hard against any changes to the benefit.
One thing Robert Isom failed to mention is that active and retired executives (and family members) above a certain grade continue to fly on confirmed space on personal travel. It is “Do what I say not what I do”. Nothing will ever change at American Airlines.
When Isom needs to go somewhere, does he pay? A definitive no. And I’ll be he doesn’t go standby.
Well its prevalent in the industry to provide free travel to employees in many airlines which is a great incentive. American Airlines has once filed for bankruptcy protection and I understand their desiring to cling to currency . For employees they are in a competitive market . Do they compensate theirs in a generous way compared to competition? If not this could be a disadvantage for the Airline. However it’s their option to offer what they wish in the end! My daughter was employed by United and was a beneficiary of such travel a nice incentive. I guess in the end you do what you have to to remain competitive in the market. Where are they in upper management compensation in the scheme of things anyway?
Unfortunately, “positive space” leisure and, or discounted revenue tickets still remain subject to company needs. They are ultimately subject to space availability as employees can be bumped for oversales or other reasons the company might have.
If an airline employee uses any “benefit” for leisure flying, that right to fly “positive space” or at an employee discount can be revoked. Employee discounted tickets have fare identifiers which can be used arbitrarily by airport agents to change the benefits of paid ticket; i.e. seat assignments, flight rebooking, etc. You are still an employee, or beneficiary of the company and expected to cooperate.
The only “positive space” is when the airline must position an employee for flight operations. In that case with full flights, revenue passengers will be bumped to accommodate them.
Yet, the Executives all travel for free confirmed. Funny how that works.
+1 What @Jason ⬆️ said immediately above!
Oh, don’t forget, some of the senior-most executives keep that oh so nice, plum benefit for the rest of their lives, too, long after they leave the company.
The marginal cost of non-rev standby travel is very low, and so it makes sense to use this as an employee benefit. The flight is already going. Filling a few empty seats hardly adds any cost, but is of great value to the traveling employees.
If airlines were consistently flying and profitable with, say 80% load factors, then it could make sense to offer confirmed travel since the missed revenue would be non-existent, and incremental cost still low.
Either way, most employees know the rules when they hire on. These big meetings bring out all sorts of questions from employees wanting more “free” perks for themselves (travel, paternity leave, exceptions for their disabled kid, day care, etc. And that doesn’t even include the ever-present angry 5-6 union representatives who are there to put the CEO on the spot with some sob story,
So gove every employee $4000 instead of 2 positive space passes. Not going to happen.
Underpaid airline employees only work these jobs because of benefits.
Also, you expect your employees to be knowledgeable about airports routes, destinations, etc. you’ve got to enable them to fly on the planes, check in, experience your destinations that you they are been going to suggest two passengers.
Cavalier attitude by airline executive(s). Without non revenue travel, airlines would pay 2x+ in hour wages. Even with non revenue travel benefits, non rev travel is not what it was as getting a seat has never been harder. With that said, no non revenue benefits would lead to no airline employees – at least employees that the airlines could afford.
Of course, hipocrite airline executives want to eliminate non rev travel for worker bees, while they all travel space positive for free.
Perhaps some of these management clowns should spend a week or two on the ramp in August at DFW. Walk in our shoes, and get out from behind your bully pulpit,!
Kinda a clickbate. Isom is talking about CONFIRMED travel not nonrev travel. This happened one time as a reward. I’m sure everyone that clicked this title thought it was talking about nonrev standby travel which is not going anywhere any time soon.
Well if you were to publicize the pay of customer service agents ( you know the people who neet the planes, get you on the planes, re book you, handle all the changes and get you booked into your flight)
14.00 an hour McDonald’s pays more. And you wonder why AA ranks low in customer service. Now add employees can not get on flights no travel benefits. Recipe for disaster.
I once worked for American Airlines, and the firm very much factored “free” standby travel into the compensation scheme.
Two key points:
1) this skewed the hiring pool to those who highly value travel, then and now;
2) with the constant decline in empty seats (when’s the last time YOU had a flight with >10 empty seats?), non-rev standby travel becomes less available & less valuable to employees – and confirmed seats become HIGHLY valued by those same people (keep in mind, if you don’t make it BACK on time from a trip, you are considered AWOL from work).
Given who works for AA, the airline can “pay” with positive-space travel (and extra vacation days) and come out WAY ahead…
Major airlines dole out free tickets to executives at many different companies… in exchange they get something “free” from them …they also reward management with “free” airfare .. the company can place any value they choose for their flights ( within parameters) they are not losing as much as they claim .. if that was the case people could not buy tickets on Priceline ..his “ math “ is skewed ..
Hahaha haha. Given the fact that airline employees take so much shit from passengers and Airlines really don’t consider the mental health of these workers on a day to day basis, flight benefits are the least they can offer, along with pY. Ironically enough, no one, -I mean NO ONE-Ever states to the Captain that they made them late to their connection. But passengers say that to gate agents and flight attendants all day. And it isn’t the Captain’s fault, either. Isom can feel how he feels about it. I don’t care. We are still undercompensated about what we endure on a daily basis. And he can not change what has been set, and not expect dramatical changes. All of the characteristics of a DJT type of “leadership”.
It’s tradition. Many times we’re left at the gate. And discount tickets are not especially a bargain. I don’t have an entitlement attitude and I resent that. Our family was devoted to our airline for twenty-one years to witness rampers dressed like rappers take our vacation seats! Long time retirees have had their vacation passes revoked some years ago. When it came to buyouts and mergers AA was left in the cold.
One area that I think you could have highlighted is how AA’s more punitive SDC/standby policies for paying customers actually probably help make non-rev travel easier/more predictable (at least when the weather/opps in general are going okay).
Better yet, just double the compensation that the ground support ( Rampers ) crew makes. That way we can afford to buy our own positive space ticket. And while you’re at it, unfreeze, our pensions!!! And give us back retiring health benefits!!! Talk about getting screwed!!! 30 years and a 1400 per month pension! Due to your convenient bankruptcy after making the world largest aircraft purchase order back in 2010-2012, Oh we remember that!, Along with 23% reduction in pay & benefits. To only have it brought back in total in 2020, That was our big raise just to bring us back to parity. American is making it’s way back, but giving out massive wage increases and benefits to the pilots and I’m sure, the Flight Attendants as well, I’m wondering what’s going to be left for the mechanics and related and the survivability of the airline going forward because you know management is going to get their take as well. I remember the last time airlines gave their employees. Great big fat waging increases and a majority of them had to merge or go file bankruptcy, kind of like taking your credit card and running it up which pretty much what happened back in 2010 through 2012. Til the bubble burst!
Who’s more directly responsible for bringing revenue to the airline – the pilots, flight attendants, and AO crew, or this guy? There should be no argument that it’s the former. So if they lose free travel privileges, so should he. He’s not doing anything at all to get passengers to their destinations.
This article and the CEO s position is completely asinine… not to mention unfair… it is a nice perk for airline employees and in reality costs the airlines NOTHING..it is all based upon 100% STAND BY … which means that seat would go out empty and costs the airline nothing (or at most costs are minuscule .. and this is an employee benefit that is ultimately a great incentive for working for these companies AND good for employee morale) just sayin
How stupid can a CEO be? Employees accept the ridiculously low pay only because they can fly in empty seats called non rev. The seat otherwise would be empty and the airline would make nothing. So instead of paying the employee what the would normally have to, they pay with a benefit that cost them basically nothing. Airline shareholders need to vote for board members that insist that management have higher IQ’s.
In another life I worked for one of the legacy carriers for 17 years before taking a buyout in the mid 90’s. The flight privileges were a very nice fringe benefit, for a job that otherwise had average pay with decent benefits. It helped compensate for what could be a very crappy job. Airline employees have shift work 24/7 and it takes quite a bit of seniority to pull weekends off. If you have enough time to pull a morning shift you may be getting up around 3AM. PM shift means leaving the airport around 11, unless there is irregular operations in which case you may not get home till well after midnight. Employee parking in virtually every fairly decent size airport is usually about a .10 ride via shuttle bus that comes by about every .15-so that adds about another hour to your working day. Working outside in operations you deal with all elements of weather, depending on location. Heat, rain, snow, ice, and bone chilling cold. In public contact, you don’t have the weather but you have to put up with obnoxious and rude passengers who take out their frustrations on employees. If you take away the standby flight benefits, good luck finding capable employees who will do the job more than a couple years.
Bring me my Pre-Departure Beverage and I will be fine
Flying non rev standby as an employee is not what you think. It can be stressful. Sure I flew all over the world in first class for free as a child growing up but you never forget the one time you were stranded in PHX for 36 hrs. My mother’s pensions were stolen twice.
Not a fan of Robbie the worm. The deliveries of 787s and expansion in Asia / Oceanic are non existent. If he had his way American would be a regional jet airline. And what CEO of a major airline steps down at 61 yrs old ?
@Nick
If you didn’t skip this article and head straight to the comments section you missed the point.
American used flying free benefits as a tool to recruit talent and build the best airline in the air. Those days are long gone via several innovations.
Computers and analytics have practically negated non rev travel or made it more of a burden than benefit. I have had D3 benefits for 25 years and I can assure anyone reading this it’s “no great shakes” anymore. Waiting in line till the last person enters the plane and missing a flight, renting a car to drive 1200 miles home is not a benefit.
Thanks I’ll fly Delta from now on and be treated like a human!
At delta we got 2 round trip tickets anywhere 4 times since covid. Non union for the win.
It’s funny how AA’s CEO feels better to compensate “the cost” of the benefit in another way. There will be no other way. If AA employees exchange their travel benefits for another way of compensation, they will get cents in return. Airlines management (and particularly AA) will squeeze every single way they have to maximize profit even if that’s at the cost of their employees and their benefits.
@will Most pilots and flight attendants don’t live in their base city. They need flights to commute to work.
I have to agree with Nick. I think Gary should update the title to include “Confirmed” Free Travel.
Gary does explain this in the post, but the whole point of the employee’s question was confirmed free travel. Of course, most regular employees and low to mid level mgmt travel standby for free, not confirmed.
Had the question been described clearly in the title, I do not think the post would have digressed as much as it did into ALL employee free travel which is all standby.
Yes, employees at all legacy carriers, not just AA, get free standby travel, but outside of upper-level management, they do not get confirmed seats unless they are traveling on company business or have a death in the family, but that does not always mean they get to bump paying passengers, unlike execs.
I also agree it is hypocritical for any airlines CEO to complain about this cost when they all get confirmed seats and can even bump confirmed passengers out of First Class or Business. They have specialized desks in reservations that have to call the affected passengers.
Not just that, but as someone mentioned they give these benefits to execs at other airlines also. They can bump passengers on other airlines if they ‘really need to.’ Wink wink.
That is one reason, Parker made the news when he traveled on WN a few years ago instead of ‘bumping a confirmed passenger’. Gary covered that story and has mentioned it a couple times since.
Parker actually complained about this at a similar meeting years ago and said he would not have set up an executive compensation system where current and former execs could get free FC confirmed seats for the rest of their lives. But he said there was no way he could change it because then AA would no longer be competitive with the other legacy carriers. Which is also why free nonrev STANDBY travel for regular employees is also not going anywhere. There is no way that all the legacies would want to fork over that much cash to replace a benefit which costs them much less when employees are traveling STANDBY.
Still think nonrev standby travel for regular employees is the problem?
Discounts yes. Free no.
Id rather have had 2k then to have been stuck in a middle seat to Sydney, Money over tickets works, I wouldnt even use the tickets if they were offered, thanks but no thanks, I buy my tickets now anyway for important travel, we cant get on anything anyway, the travel benefit vanished with travelosity
AA employee here, low level mgt position, and the moral is getting seriously bad!!! Better wake up AA before your low wages, long hours and hardly any bonus starts forcing the smart people to look for other employment! Pathetic
Gary, PLEASE PLEASE PLEASE run your articles through a grammar checker before posting.
“For instance, we don’t just provide health insurance through employment in a majority of cases in the U.S. (economical to purchase as a group, adverse selection helps explain why Obamacare needs provider subsidies) but also because it’s not taxed the way payroll is.”
IS NOT A SENTENCE.
The major reason that people want to work for any airline is for the travel benefits. But with flights consistently overbooked you’re lucky to get on a flight. The pay for non union employees is just a hair above minimum wage. Isom isn’t realistic and strikes me of a greedy corporate soulless capitalist.
There is a HUGE DIFFERENCE between compensating employees with POSITIVE SPACE travel and NRSA travel. How does this article ENTIRELY MISS that Isom is talking about POSITIVE SPACE travel (which displaces paying customers and has a real revenue cost), NOT NRSA travel, which is an extremely marginal cost to the airline?
The vast majority of employees are going to value air travel at a higher value than the jet fuel (and maybe meal) costs it takes to get them somewhere, and likele a much much higher value that the costs.
1) AA C level executives fly for free.
2) if your rank & file employees aren’t flying for free on your airline, they’re increasing the bottom line of another airline, decreasing the value of your stock.
What folks fail to realize the airlines went into bankruptcy and MANY employees helped through the rough times. Airline employees dont make enough and the least they can do is offer free travel. Some of us have been working from the 80s and 90s and have seen the decline and have helped through 911 and other rough times. How ungrateful.
As long as Isom follows the same policies himself that he dictates for employees he’s in the right of things. If not, he’s a hypocrite and an example of people who don’t belong in management.
I remember the positive space tickets for our hard work. Interestingly quite a few employees never used them – for various reasons. They weren’t able to ‘gift’ them or extend the date.
The employee was charged the taxes as a ‘Bonus’ on tax forms.
Most made a quick flight to Florida- or no big deal.
After many years working for AA. it was deserved and good for morale – something that’s now lacking.
To all those who noted crazy pilot and I’m sure crazy flight attendant contract radification please keep in mind the company can pull the BANKRUPTCY card at ANY time!!! This POS company knows it and will happen soon!
Well stop allowing top executives and their families positive space to vacation all over and never get bumped.
Wonder why this airline is sinking. Employees never matter to this CEO or any management
I worked at AA 1986-2001. Bob Crandall knew how to run an airline and treat employees well.Unfortunately, the current regime has no idea how to treat anyone. Customers and employees.
An airline is a very labor intense service that needs quality labor. It will never be high pay for most of the workers so the only incentive to stay is the flying perks. If American doesn’t treat their labor well, they will go elsewhere or not be very productive. AA already has a history of treating labor bad so this isn’t new. There are 2 ways to motivate emplyees. One is to hold a carrot on a stick in front of the employee, the other is to beat the employee with the stick. Guess which one makes better workers.
“Will” would use the latter as does the current CEO of AA.
Apparently an overpaid CEO with free flight benefits doesn’t understand how majority of his workforce is compensated. Outside of pilots and mechanics most of the companies flight related personnel are paid like crap. The free flights are why people work for the airlines! Paying ground crew barely over state minimum wage is not going to keep any staff. Be prepared to drastically up wages and pass that on to the traveler or you’re not going to have employees.
I never got to use my positive space tickets, and they didn’t roll over to the next year. So much for that perk.
What an absolute joke. It’s the dollars and cents, profit at all costs that is threatening America as more people reject this idea and instead turn to the worse idea of socialism. As another post said, many of the people working for airlines do so solely for the flight benefits. It certainly isn’t because they are well paid. Also as others have said the employees are flying stand by and not taking any revenue away
Isom is absolutely clueless. Take the space-available travel benefit and people will leave in droves.
As a “above the wing” employee, Mr. Leff needs to stick with his “view from the wing” and leave employee travel benefits out of his blog. As it is, many employees from passenger service and lower level manager get paid terrible wages as compared to the competitors. If Mr, Leff cares to write about employees perhaps he should write about how terrible the wages are and the fact there is no life work balance for said employees. We are the individuals on the front line through the late nights figuring out how to get revenue passengers to their destinations when inventory has been depleted and there no availability for days on end.
For those of you who feel employees don’t deserve the benefit of NRSA flying, perhaps you stop and think the majority of employees are only working this industry for the benefit and have other full time jobs which actually pay the bills. So, go ahead, take away the benefit or put your stamp of disapproval on the benefit but understand, if it were to happen 80% of the workforce would walk and you’d have nobody willing to put up with the level of abuse we undertake from passengers. Without us and the minimal benefits we do receive, not one of you will be going anywhere anytime soon!
If you want a fine example of how easily it is to hire, train and retain employees, let me offer you a spoon full of borax to help the medicine go down. Prior to the start of summer travel, which was projected to be one of the busiest in the history of this industry, major hiring campaigns took place and how did they sell people? Flight benefits! How many of those people do you think walked because once they got on the floor and realized the abuse not only by the passengers, but also the company was too much to handle. Of all the new faces, there are only a handful left because they realize the flight benefit isn’t all it’s cracked up to be.
Go ahead, do it and watch what happens. Without passenger service, nobody else can do their jobs. The baggage handlers have no bags to load, the flight attendants have no passengers to serve and the pilots are flying empty planes just to retain gates at airports.
Perhaps those of you speaking about what you don’t know should stick to speaking of what you do know and that includes Mr. Leff.
It’s as if no one today is taught the basic economic principle of “there is no such thing as a free lunch”.
Everything has some cost associated with it, you just have to figure out who in cases of “free”.
Also, we Americans love to use euphemistic terms to hide what they really are.
For example, we should call them “lazy stores” instead “convenience stores” which hide the fact you’re paying a price premium to save the effort of finding a cheaper alternative. America, where marketing is king.
Noone would take the daily abuse with out travel benefits.
You would be hard pressed to find tolerate ppl to even listen to the rude comments made. They should offer hazard pay!
1. Many are conflating Non Rev with positive space benefits.
2. Positive space as an incentive may cost less than a raise. A raise does not insure better productivity as does an incentive and its permanent vice episodic.
You need to explain to your reader’s the difference between confirmed seat “free” tickets and standby “non-revenue” tickets…….I don’t think any employee would care much if they converted the minimal amount of “free ticket” value to cash compensation, because that’s not the real benefit that everbody cares about. The real benefit that has real value to the employee is non-revenue (standby) travel.
Mr.Isom,
Who are the ones that have to face the customers when their flights are delayed? When their flight are cancelled? A lot of IROP lately,yet, you can’t always blame Wx or ATC.Just plain old shortage of front line staff,while making excuses.And in the meantime the whole AA corporate world is either nice,comfortable and cozy ,at home or at their Corporate HDQ all inclusive resort.This up side down Corporate World pyramid is very obvious.Now you have to bring up non rev travel? You want to nickel and dime us more?Really?
For people who travel all the time for a living, traveling more may be the last thing they want to do with their time off. No wonder they don’t “value” this benefit. They should be compensated with cash so they can use it to buy whatever they do value. Unfortunately, cash is taxed to both the employer and the employee so it would take a lot more cash to purchase the same travel benefit.
I suggest Isom to start with revoking free travel for all AA C level executives and also his former boss Doug – they do make sufficient amount of money and can afford the last minute trip to Rome.
Also, a good strategy is to charge some sensible amount for such trips – let say $500 for confirmed space (or 75% off whatever AA is charging that day). This way the seat is not free but the discount is still excellent.
Isom makes about $5 million a year. Parker earns over $6 million a year. Plus stock awards. Each also gets over $17,00 in flight privileges a year. Their CEO is paid 70 times more than the median salary of AA employees. Typical overpaid executive cheapskates. And people wonder why unions go on strike. It is all in the AA proxy statement:
https://www.proxydocs.com/branding/965250/2023/ps/62/
This is humourous, coming from the dudes who fly the residence on Ethihad or first on Sing by playing credit card points to your advantage. At least we actually work for the airline and get your butts where they need to go. You can’t have all the fun.
Maybe offering points at different redemption levels, like a credit card Company. So, if cash is your thing, it can be redeemed at X, travel can be X+50% and so on. Of course, it would probably convert to taxable income, so… .Anyway, just an idea.
Would be interesting to know what percentage of AA employees that actually used the 2 positive space award A7 tickets. Probably the same percentage that redeemed those useless Take Flight Certificates. I know may employees did not use their A7 tix.
Oh! And there was that one New Year’s Day US Airways flight from CDG to PHL from Terminal 1 (before last year’s revamp) when Doug Parker and family entourage showed up unexpectantly for the flight and the CDG airport staff “cleared” paying passengers out of business class (US Airways “Envoy”) to accommodate his wife, kids (his son strewed crap all over the J section before takeoff), and the rest of his retinue. Needless to say, there was a near riot and every non-rev hid their employee badge. Isom can keep his comments to himself. Delta seems to be able to annually give its employees bonuses and you never hear DL b*tch and moan about employee travel.
I guess we all have forgotten that scandal when AA employees were delaying the departure of revenue flights for AA excs and/or their spouses that were habitually arriving late to the gate.
You would think that Isom would be focused of more fundamental issues (network, widebody planes, service level). Those A7 tickets were a one off years ago. Why on earth is he still perseverating over it?
I’ll perhaps have some respect for Mr. Isom and his cronies when they stop flying on positive space free tickets and fly standby like the rest of us who keep the airline running. He’s a hypocrite.
CEO doesn’t own AA so he can go pack sand on his thoughts of taking travel away from it’s employees management and workers
Does the hypothetical across-the-board raise happen, though? Why that instead of merit raises? What’s wrong with giving employees access to unsold seats? This guy ought to focus on keeping the airline out of the news with its frequent negative stories instead of taking things away from employees. .
H a rd to have a clue when you are so disconnected from labor and reality for everyday people.
Of course Mr. isom and his family fly positive space any time they want.
Does Mr. Isom pay for his personal travel flights? Are they commercial or on a private jet? If he pays for travel on his airline, then fine. He wins the argument. If not, he is a hypocrite.
Lots of commenters are getting far afield from the issue addressed by this article: positive space tickets.
The employees always have and will continue to enjoy their nonrev/standby benefits. Understanding this would remedy much of the outrage being expressed.
Isom is clueless; that’s why Americans ratings are so low. Having flown as a captain for them for 42 years, I can tell you the last thing i want to do is get on an airplane on my days off. Certainly not standby. Give me the cash instead of a free ticket to some place I have been to a hundred times. Contending with the greyhound crowd on airplanes is not my idea of fun. People behave like a bunch of 5 year old’s anymore on airplanes. They should also ban all alcohol on airplanes- and terminals for that matter
It’s amazing how many people who are commenting here haven’t read the article. This article is not about taking away nonrev travel benefits. It’s about the confirmed travel tickets that AA gave to employees in 2017. It cost the company hundreds of millions of dollars, and he’s saying that AA won’t do that again. He said nothing about nonrev travel benefits.
Learn to read, folks.
BTW, I used my 2 confirmed tickets to take my close friend to Italy. We loved it!
Imagine Delta was able to give its commuters POSITIVE SPACE(free tickets ) for 2.5 whole years ,yet Mr.Isom has found a way to dumb down giving it once as an incentive . His Monterey value for those tickets will be no more than $700 . We see how much they gave their employees for profit sharing. Now I see why American Airlines workers are so nonchalant and salty at work .
I left AA in 2015 at the beginning of the disastrous merge and have no regrets. AA was like the debutant- well mannered and always friendly. USAir was like the roller derby – rough and gritty. It is sad to see the decline of a once great airline run by regional mentality management. I now use Delta for my travels since AA is unreliable and downright nasty.
We are abuse by passengers, management and supervisor in that order. AA lies to the Federal Aviation. About delays. They leave people behind including standbys just to meet their goals.They care about numbers. We get abuse verbally and mentally every single day. We do things that we are not suppose to do just to send a plane on time. We are required to work under pressure with not tools. We need to apologize for their lies about weather or mechanical. We stand 2-3 hours in a gate getting verbally abuse, but hey we do have the benefits right? Not even that because they are overbooking the flights so we can’t get on. We get assaulted, people spit on us, or they scratch our hands when giving their boarding passes or by checking their bags. Is so many things that we have to deal with it for someone to take that little perk that we have. 14.65 per hour is nothing!!! Checks every other week are about 600/700 so yeah we don’t live on that.
Non-rev tickets are not free.
Employees still pay a reduced price.
Then let the employees accumulate frequent flyer miles.. Corporations do it all the time for their employees.
Or how about pay your Flight Attendants a living wage and for boarding? Corporate Greed
I think many people are misled into what some of these folks make. So I do not sound like a hypocrite, I am a former ramper and my wife, two brother in-laws, and a lot my friends are all ramp agents for AA. They are senior employees and they all make $35/hr in a West Coast hub. None of the salary websites are remotely correct for pay, you can google their union site (IAM141) and the 2020 contract is publicly posted for all to see. Ramp agent wages start at 15 and go to $34.96/hr after 12yrs. Add in very affordable insurance, 401k matching, free standby travel, free community college tuition (via union), a pension, retirement benefits and you are far from the “minimum wage” references some have mentioned in these comments.
The free ticket was a one-time deal and was a cool thing and everyone would love to see it return, me too, but with my family averaging 73k/yr each before differentials and OT, I think they agree with their CEO, put the money in my pocket and let me decide where to spend it.
Retired from AA after 35+ years and many mergers. They asked me to stay several times before I finally pulled the plug. If they think they have problems getting people to come work for them now go ahead and take travel benefits away. It’s not like they are giving anything away. You only get on if the seat is open & not sold.
Free travel is THE ONLY REASON that people go to work for the airlines. It certainly isn’t because of the sub-market wages. The intrinsic value of this benefit has been decimated due to eecent Management policy decisions – particularly allowing passengers to change flights and standby any flight they wish at absolutely no charge. While we are in business to sell seats – it has gotten so bad that employees cannot actually USE their travel benefits and that is a real problem and one of the reasons employees are so upset and taking Strike votes.
It’s not just about pay. I am shocked that the airlines are even able to hire people today.
Disagree, this isn’t a gym membership that some people could care less about and will never use. EVERYONE that works at an airline does so to get free travel. In this instance if he’s saying the 2k value is not perceived as such, and that’s likely correct, is he willing to give the 2k in cash? Or more likely just an excuse to not give the seats, and then do $50 Visa GCs? I know where my money is
What a load of horse crap!!! This greedy AF guy made $5 million dollars last year and gets to fly himself and his family all over the world for free. Using his example of a ticket costing $2,000, if he implemented the requestor idea all it would cost American is $320,000 for two tickets for 80 smployees. Considering a large number of people never take advantage of these type of perks and another portion probably would not use the maximum, instead opting to fly a short distance to visit family, the total cost would probably be a lot less. Just another example of an out of touch “Let Them Eat Cake” CEO.
Perhaps Mr. Isom should be paid in AAdvantage miles instead $$$$. Put your miles where your mouth is.
Isom needs to put his money where his mouth is and set an example starting with eliminating free leisure positive space first class travel to not only senior management, but their dependents and Board of Directors as well. As is the usual case coming from a “bean counter” his numbers are grossly inflated to justify his position, especially since I seriously doubt he has any actual data on how many, if any, revenue passengers got displaced.
Space available travel by airline employees and certain relatives, including the employee’s parents, are not taxable to either the employee or the airline. Congress has confirmed this. Positive space travel by employees may be different, but as far as I know is still not taxable because it is considered to create de minimus expense to the airline. But for Mr. Isom to come right out and say that there is a cost to his company associated with positive space travel by employees is begging the attention of Congress to make this travel taxable. Is Mr. Isom actually an employee of the airline, or is he an employee of a parent company? If an employee of a parent company, his travel would be taxable to him, but probably, if treated like travel for Board of Directors in the past, the income tax amount would be paid back to him by the company.
AA uses employee travel “privileges” (never to be confused with benefits) as an excuse to pay its non-Union employees 50-100% less than other companies yet they only get on flights if there is empty space. Employees and retirees using these privileges never take these seats from paying passengers. I was laid off from AA due to Covid and my “severance” was to be able to use these so-called privileges for a few more years. Meanwhile, I didn’t see a dime of the bailout money AA received to help with living expenses when I lost my job. The bright side being, I get paid twice as much now and I don’t have to work for a company like AA which doesn’t value their employees.
Screw y’all and bring it on. “And he’s right”!
85% of AA employees will walk away, retire, and be done. Enjoy your cancellations, delays, and inability to check your bags. Have a blessed day!
Geez, he didn’t say anything about taking away flying benefits he is referring to space positive travel. I guess if you are not an airline employee those 2 VERY different types of travel could be confusing.
Standby travel will always be the amazing perk that it is, getting to stand and wave bye bye, as the full plane pulls away.
Just kidding we get on sometimes .
Yeah, give them AAdvantage award miles but be prepared for the screams and backlash when the employees find out how many tens of thousands it takes to get anyplace internationally anywhere on the dates they want.
I recall the story of factory workers overseas destroying a train full of GE refrigerators because they were building things they didn’t have. Flight benefits suck today. Good luck getting most places if you are non rev. I think it goes without saying that most people expect the direct benefit of the thing they do for a living. Duh.
Maybe I’m misunderstanding the article but I think they’re talking about confirmed travel benefits , not non revenue travel benefits. I believe he means not giving away confirmed space travel as a way to compensate employees. I don’t think he’s talking about the non-rev travel benefits, but again maybe I’m misunderstanding
Maybe I’m misunderstanding the article but I think they’re talking about confirmed travel benefits , not non revenue travel benefits. I believe he means not giving away confirmed space travel as a way to compensate employees. I don’t think he’s talking about the non-rev travel benefits, but again maybe I’m misunderstanding
There’s no FREE FIight in an airplane. Every pound carried costs a certain amount in fuel. when I worked in circa 1975 it was every 100 Ibs weight on 3-hr. flight cost 13 lbs. fuel. Not that much anymore but still significant. $/gal. much higher now.
Bring back the D2s for the retirees.
Perfect example of CEO Isom being out of touch with his employees!
I worked as a FSC from 1991 to 2022. I was there for the best years when Crandall was the King of AA, loved and respected. Flying Non Rev is no longer a perk when you can’t even get a seat. The operation at DFW is a joke. I know this because my family works for AA. Broken equipment, broken fans in this heat, CSM’s treating the ground crew like slaves. Isom needs a reality check. Only reason he’s fine with taking that way is for more million dollar bonuses for him and his useless flunkies.
We at AA for the most part have zero respect for Isom.
He’s not right. What does it matter that it cost you anything when it cost you everything. People matter and you will get more gain from what you’ve given to them than lose because the people will work harder. Sure you will have those that just don’t but the majority will do the work.
The same sort of analysis and logic could be used regarding his annual compensation. Airline CEOs overseeing airline strategies and contract negotiations, managing resources and operations, are all things that could easily be done with AI programmed with the airline objectives and contracts. American Airlines is failing under his leadership. It is absurd that he makes $50,000.00 an hour to do so poorly.
He uses the term “team” as if he believes this will help make an employee feel a part of….. Empooyees mean zilch to that man. He’s proven it time and time again. Unapologetically, mind you. Flight benefits are nonexistent at AA. Just the way Isom likes it. Cheers
My question to the CEO: does he pay for his own flights out of his multi million dollar salary? Does he work outside loading and unloading his planes, rain or shine? Does he work in bellow zero or above 90F temperatures? Most of us work for the benefits, not for the meager salary. Take that away and we are gone.
Acft maintenance at dfw is a joke. This ceo has no clue… no parts, jets are flown till broken, equipment is garbage and ancient, management threats 24-7. Morale what’s that. Non rev that’s a joke. Team member??? Who thought of that…benefits are everything lose employees to sw all the time…isom only there for 1 reason!!!!
I used to work for airlines co. I totally agree with the employees. Take away the benefits, and flight benefit is one of them, then co. Get nothing to pay for the employees’ hard work. This show the greedily and unappreciated. Screw them.
Sounds like you should have gotten gym memberships for all your employees. It says something when a company invests in the health of its employees.
Coming from someone that gets positive space travel for himself and his family that’s rich.
Have not used a pass in some time! We can purchase a ticket!!! My husband is Delta and they are great to the employee. Run by seniority too! We also buy advantage miles!!! We have no passes, When I commuted I purchased $39 seats on my own carrier! The days of passes gone. Use miles when u shop!
American Airlines has a history of being known for knowing the cost of everything…
….And the value of nothing.
So this comes as no surprise.
As many Dhds as crews are on each and every day. How much is that costing? I’m sure that has an associated cost.
This was why I quit AA working as a CSA. It’s very clear the company couldn’t care less about us. The flight benefits were the only thing keeping me there, and when it became clear the company was doing its darndest to make sure their flights would have no empty seats for its standby employees, I was gone. Within less than two years I’m making more money than I was there, I work from home, and have a completely flexible schedule with weekends and holidays off. Quitting was the best thing I ever did. With this attitude continuing this job will continue being a revolving door. Such a shame. Take care of your employees or you will keep losing them!
It’s easy for him to say there’s not much value in it when he and several layers of management below him get free positive space business class. when i worked for AA, Doug Parker said in a town hall that the free positive space travel is part of the compensation package for executives.
this article doesn’t mention the fact that many airlines (AA included) pay employees below market salaries and tell employees it’s because they have standby travel as a benefit.
i’m happy i now work for an airline that not only pays market rate salaries, but also actively uses positive spade tickets for recognition, contest prizes, and even door prizes at company events.
Take a lesson from Richard Branson. Your staff are your greatest asset
“ If you look after your staff well, they will look after your Business “. ..a very simple but effective ethic…and it WORKS! Take heed AA and you will see smiling CSA faces c at the airport followed by happier customers……..f
As an employee this is very disheartening. I work res and last year I racced in half a million in revenue for sales. I had superb customer service and service time but my attendance probably could have used some improvement, I received no such reward which is understandable. But if someone who earned it for excelling in what I would do I would totally agree and more than likely stride to do better as I did not receive anything for my stats which I bear no ill will in that regard. But it is hard to travel non revenue(standby) and to see something like this it is clear that they are only for the benefit of their poccets than the benefit of its passengers and employees. It’s a business and I understand that but this type of attitude is clearly why we have fallen from 68 to 82 on top 100 airlines in the world.
Think about this Mr. Isom you are an employee of AA. You feel that way but yet your perk and your predecessors is life time First or Businey class tickets. Yours are free and the employees very rarely get First or Business class. Does that mean you and your predecessors should feel the same way. Mr. Isom that was not a smart comment. At least Crandall cared about the customers. You and Mr Parker took away any way for the customers to be compensated for their problems if they are not elite status. Truthfully, you have your emails go through customer relations so you do not have to deal with the complaints.
Like he pays for his airfare !!!! He doesn’t recognize his employees in any way, shape or form. We’re nothing to him !!!
@Will, you sound like a bitter person who has zero clue as to what he is saying. Let me guess divorced from a flight attendant and/or didn’t get hired as a pilot?
Do as I say not as I do has been an Isom mantra for years.
Doug Parker wasn’t very well liked either but in hindsight he was positively adored if it’s viewed as a comparison to Isom.
He has made it very clear he has no regard for his employees (non executive of course) OR his paying passengers. It’s no secret that if you are an employee nearing retirement age it would be preferable if you drop dead then take an iota of benefit from AA, either monetary or flight privileges.
Especially at DFW – AA strokes DFW Airport Executives and they in turn reciprocate.
Both are still replicant of the ‘good old boy network’ and an underbelly of seedy, corrupt, pocket lining Companies using toxic smoke and mirrors to project the image that they give a ‘flying f@!&’ about their employees.
Respect garners respect – Isom has none from his employees and even that is more than he dishes out.
Worked in the industry for 20 years, in a business where “Customer Service” is your product, a happy employee is an asset. But if you are a wealthy selfish CEO you can’t even fathom this.