Hundreds of American Airlines pilots demonstrated outside the executive offices of the Dallas Cowboys, Dallas/Fort Worth Airport and at Roger Staubach's real estate firm Tuesday, contending that the carrier's poor service is hurting its best customers.
The protests were part of a series of demonstrations organized by the Allied Pilots Association in cities across the nation and in London. In addition to demonstrating at airports, pilots gathered at the offices of some of American's largest corporate customers, including Anheuser-Busch Corp. in St. Louis, Wells Fargo in San Francisco, and GlaxoSmithKline in London.
The largely silent protests, in which pilots carried signs and passed out leaflets, came a day before American is expected to report a loss for the first quarter of 2008. Wall Street is predicting a loss of $1.34 per share, down steeply from a profit of 30 cents per share a year ago.
The airline is also scheduled to set the value on a controversial slate of stock bonuses, likely to be worth between $35 million and $40 million for about 900 top executives and managers. The final value of the bonus package will be based on the average price of AMR stock Tuesday, according to the airline.
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If valued at Tuesday's closing price of $8.57 per share, the bonuses would be worth about $37 million, according to a union estimate.
Leaders of the union that represents American's flight attendants say they will call on American's top executives to resign if they accept the bonuses.
"Considering all that's been happening with American, it's really deplorable that they would take these bonuses and not share in any of the gain with their employees," said Laura Glading, president.of the Association of Professional Flight Attendants.
Jeff Brundage, American's senior vice president of human resources, said Tuesday that there are no plans for executives or managers to decline or defer the stock payments.
"Its just obscene," said Karl Schricker, an American pilot and union spokesman. "These guys have their heads in the sand if they don't understand why this upsets us."
While still substantial, the bonuses are significantly less than previous payouts, which totaled about $160 million in 2007 and $90 million in 2006.
That's because the stock price of AMR Corp., American's parent, has plummeted this year amid high oil prices and worries about the slowing economy.
The stock has also suffered from last week's grounding of 300 MD-80 airplanes, which resulted in more than 3,000 American flights being cancelled.
'Our best customers'
Outside the Cowboys executive offices, about 150 pilots stood at attention on the sidewalk, holding signs criticizing airline management. Kevin Cornwell, an American captain and spokesman for the Allied Pilots Association, said they wanted to let the team know that pilots are concerned about increases in cancellations and delays at the carrier.
"The Cowboys are some of our best customers," Cornwell said. "We want them to know that the employees still care about American's service."
Cowboys legend Staubach is a member of the board of AMR Corp., which is why his offices were also the site of a demonstration, union officials said.
Officials with the Cowboys and Staubach Co. declined to comment.
American has been in contract talks with pilots for more than a year, but little progress has been made. The airline is also in talks with ground workers and mechanics, and will open negotiations with flight attendants in June.
Pilot union officials estimated that about 375 pilots participated in the demonstrations in North Texas on Tuesday, while about 1,300 pilots demonstrated nationwide and in London.
Pilots said last week's meltdown was part of a larger trend of deteriorating service at American. They argue that cutbacks in pilot staffing, airport personnel and maintenance have made the airline more vulnerable to delays and cancellations.
"I had to refuse to take a flight just yesterday," said Paul Kidzus, an MD-80 captain. He said he spotted mice on the plane before takeoff. "It's just embarrassing sometimes, the poor condition that our aircraft are in," he said.
Brundage said the pilots union last year stopped participating in a joint management-labor committee that focuses on customer service. Flight attendants also stopped attending those meetings.
"We have an open invitation to them, any time they want to sit down and work with us on some of these issues," he said. "They're always welcome at the table."
Schricker countered that the joint effort was "a failed management mantra" that wasn't taken seriously by executives.
"All those joint meetings were just an attempt to co-opt labor so they could transfer money from the employees' pockets into theirs," he said.
Turbulent skies ahead
Brundage said the union is trying to "change the subject" from the fact that American's pilots are among the highest-paid in the industry. And he said the pilots' most recent contract proposal, which requests wage increases of more than 50 percent, "exceeds our ability to pay."
According to the airline, the average line pilot earns about $139,000 annually. Pilot pay varies considerably, however, depending on the type of aircraft flown, years of experience, route flown, and whether the pilot is a captain or first officer.
American officials also noted that their pilots are among the few who still have traditional pension benefits, which include a lump sum payment when a pilot retires.
In February, for example, retiring pilots received a payment of $2.5 million, on average, according to the airline. Several airlines that filed for bankruptcy, including United Airlines and Delta Air Lines, terminated their pension plans.
American executives, meanwhile, are paid less than the average compensation of top officers at similar-sized companies, he said.
But Schricker disputed the notion that American pilots are among the best paid. He said that Southwest Airlines and Continental Airlines have richer pilot contracts, as do cargo carriers FedEx and UPS.
"It's simply not true, even though management likes to say it all the time," he said.
He also noted that pilots, like other American employees, accepted steep cuts in wages and benefits in 2003 to keep the airline out of bankruptcy. Some pilots, who were downgraded to first officer or to domestic routes from international after the concessions, saw their salaries fall as much as 50 percent.
Brundage said the fighting between labor and management isn't helping as American faces what is likely to be a turbulent period. Oil prices are expected to remain high, the slowing economy could hurt travel demand, and the industry will likely be roiled in coming months by the proposed merger of Delta Air Lines and Northwest Airlines.
"We all need to get focused on the future and what's ahead," he said, "because the waters are looking choppy."