American Airlines reinstates profit-sharing programme

VAA 787-9

American Airlines is reinstating a profit-sharing programme that will put 5% of the organisation’s pre-tax income into a pool to be shared among its employees.

The programme will be based on the airline’s 2016 annual earnings, and will be paid out early next year.

The 5% rate is the same as that offered by American Airlines under its previous profit-share scheme, which ran prior to its merger with US Airways. This scheme had been halted in favour of higher base pay rates.

The profit-sharing programme, which is subject to union approval, will serve as an additional compensation mechanism alongside existing contractual pay rates. It will not impact pay rate proposals for contracts that are currently being negotiated.

Doug Parker, chairman and chief executive officer, and Scott Kirby, president at American Airlines, said: “We are taking this step because we have heard from many [employees] that a profit sharing plan is important to our success as a team.

“Although we continue to believe the most effective way to increase compensation is through higher base pay, we recognise there is a team-building component to profit sharing.

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“Although the 5% rate is lower than our peers, we plan to offer hourly pay rates higher than those same peers in the contracts we’re negotiating now and in those to be negotiated in the future.

“Our view continues to be that we should set industry-leading pay rates as we negotiate our contracts so that higher pay is reflected in each [paycheque], every pay period, throughout the year, and that [their paycheque] recognises the work [employees] do every day.”