American Airlines CEO Doug Parker acknowledged Tuesday that employees at the world’s largest airline “still don’t trust us,” after the pilots union accused management of fomenting a “toxic culture.”
In a presentation to investors and Wall Street analysts, Parker said employee relations are more important than ever as the airline industry has consolidated and management has to do a better job of engaging American’s workers.
“We have to be out working to find ways to positively surprise our employees,” Parker said. “They still don’t trust us. It’s not their fault they don’t trust us. They don’t trust us because of what they’ve experienced. They haven’t experienced trustworthy things. Not because the people they work for are necessarily not trustworthy, simply because the people they worked for couldn’t live up to the promises they made. … They’re still gun shy from it.”
In a letter sent to Parker over the weekend, the pilots union criticized American management, saying a “toxic culture” was returning to the airline. The union outlined several issues, such as crew scheduling and payroll problems, that were contributing to poor labor relations.
“We see managers at our airline clinging to their old ways,” the union said in its letter, which also said the airline was putting out an “embarrassing” product to customers.
Parker said the industry has fundamentally changed, with airlines no longer struggling to survive but instead part of global networks that can take customers anywhere they want to go. But managers are still managing as if the airline may not last, he said.
“The American team has lived in that old world of management-labor tension for so long, and changing this culture requires them to understand the industry is now a different place, and they have to get past that. We all have to get past it,” Parker said.
Although the airline has given $3.5 billion in pay raises to several of its labor groups, including pilots, flight attendants and gate agents, Parker says bigger paychecks are not enough to motivate a workforce. But he did not address profit-sharing, which some employees including flight attendants have asked American to consider now that American made $7.6 billion in profits in 2015. Mechanics and ground workers have not received raises as they are in negotiations for a new joint contract.
American is spending $3 billion on customer service improvements and buying hundreds of new planes to replace its aging fleet. But Parker said the investments will be meaningless if employees aren’t proud of the airline.
“If we don’t have our employees engaged and excited about being at American Airlines, it’s all for waste,” Parker said.
Andrea Ahles: 817-390-7631, @Sky_Talk