American Airlines has announced plans to give pay raises to pilots and flight attendants even though the two groups are under contract and not in negotiations.
The Fort Worth-based carrier said it wants to give pilots an average pay raise of 8 percent and flight attendants an average of 5 percent. The respective unions will have to agree to the raises before they can go into effect.
Both the Allied Pilots Association and the Association of Professional Flight Attendants have complained that their pay rates, while industry-leading when contracts were signed in 2015, now lag behind rates Delta Air Lines and United Airlines.
In a letter sent to employees Wednesday, American’s chief executive, Doug Parker, and president, Robert Isom, said the raises were about “doing the right thing” for employees, who have helped the company through its successful merger with US Airways.
“While the commitment was met when the contract was signed, we never anticipated this large of a gap for this long a period, and we don’t like that it exists, contract or not,” the letter said. “Therefore we intend to work with the unions to adjust the hourly base pay rates of all American pilots and flight attendants to levels that are equal to the highest rates currently in place at either Delta or United.”
Pilots will receive raises of 7 to 8.7 percent depending on their seniority and what type of aircraft they fly. Flight attendants will receive pay raises of 4.2 to 6.5 percent depending on seniority. The raises could go into effect as early as May.
“This long-overdue pay rate increase represents a welcome initiative by management,” said APA President Dan Carey in a message sent to American’s 15,000 pilots. Carey said management also indicated that discussions regarding length-of-service and long-term-disability provisions will continue. “This kind of collaborative, problem-solving approach will definitely help foster the culture change that has been a stated goal of both management and APA since the merger of American Airlines and US Airways.”
The pilot contract becomes amendable in January 2020, the flight attendant contract a month before that.
With the raises, a senior captain will earn $339.19 an hour, while a newly hired first officer will earn $85.71 an hour. Pilots work an average of 75 hours a month. A newly hired flight attendant will earn $28.89 an hour, while a senior flight attendant can earn $64.96 an hour under the new pay scales. Flight attendants typically work 80 to 85 hours a month.
Earlier this month, the APFA, which represents 26,000 flight attendants, lost an arbitration ruling related to its pay rates. The union had argued that flight attendants should have received a mid-contract adjustment pay raise of 8 percent instead of 1.6 percent. The panel ruled in favor of the company’s 1.6 percent raise, which is retroactive to Sept. 1. The pay raises announced Wednesday are on top of the September pay raise.
“Last month, when arbitrators handed down a ruling that left us lagging behind other carriers, we told management flat out: That’s unacceptable,” APFA President Bob Ross said in a statement. “Failing to invest in the people who take care of passengers — under conditions that grow more difficult every day — is no way to run an airline. To their credit, American Airlines management listened.”
In a government filing, American said the pay raises will cost the company $230 million in 2017 and $350 million in 2018 and 2019. The company will report its first-quarter earnings Thursday morning before the stock markets open.
American is in contract negotiations with its mechanics and ground workers union groups, but the company implemented pay raises for those employees in September. Wednesday’s letter said American has not offered additional pay raises to other employee groups, such as gate agents, because their pay is already industry-leading.
American’s executives said the pay raises reflect “a real philosophical change” at the carrier.
“As we move forward, if we see sizable discrepancies in pay rates between our team members and other major airlines and our contracts are still years away from their amendable dates, we will work to address those discrepancies,” the letter said.