American Airlines to begin profit-sharing
American Airlines, the largest carrier at Philadelphia International Airport, announced Wednesday it will begin profit sharing with employees based on 2016 earnings.
American Airlines, the largest carrier at Philadelphia International Airport, announced Wednesday it will begin profit sharing with employees based on 2016 earnings.
The payout will be 5 percent of every pre-tax dollar earned, and will go to about 110,000 of American's 120,000 employees. Some managers will not qualify.
Delta, Southwest, and United airlines all have employee profit sharing.
The announcement by American CEO Doug Parker and president Scott Kirby came after unions for American pilots and flight attendants pressed hard to share in the profits - $7.6 billion in 2015. American is the world's largest airline by passenger traffic.
"We will reinstate profit sharing at the same 5 percent funding rate that was ratified by all American contract employees prior to our merger," Parker and Kirby said in a message to employees. Previously, management opposed sharing profits with employees, saying airlines should improve wages instead.
American has more than 8,300 employees based at Philadelphia International Airport, including 2,500 flight attendants and 1,475 pilots. The carrier merged with US Airways in December 2013, and operates a hub and 76 percent of the flights in Philadelphia.
American's Allied Pilots Association earlier this month blasted the airline's "toxic" labor relations, a substandard product, and violations of their contract in a March 4 letter to Parker.
American management heard the plea.
"The company will set aside 5 percent of our annual pre-tax income (before special items) every year, and that money will be shared among all participants," the executives said. "Although this 5 percent rate is lower than our peers, we plan to offer hourly pay rates higher than those same peers in contracts we're negotiating now, and in those to be negotiated in the future."
Southwest, the first in the industry to offer profit sharing with pilots, paid $620 million in profit sharing in 2015, equal to about eight weeks of pay for each eligible employee.
Delta paid out $1.5 billion in profiting sharing for 2015, about $400 million more than employees received the previous year.
The payout to American employees will be in early 2017, the airline said.
215-854-2831
@LoydLinda