March 24--More than 100,000 American Airlines employees will begin sharing in the company's profits in 2017, executives announced in a letter to employees Wednesday.
Employees below certain management-level positions will receive a cut of 5 percent of pre-tax profits starting with the airline's 2016 annual earnings, according to the letter.
The payments will be made in early 2017, and more than 80 percent of airline employees will be eligible, said American Airlines spokeswoman Leslie Scott.
American Airlines had a profit-sharing program before declaring bankruptcy in 2011, but employees had not received payouts since 2001 because the airline wasn't profitable, Scott said. Profit-sharing was included in employee contracts negotiated during bankruptcy but was never implemented because of the airline's merger with US Airways, she said.
The profit-sharing program was cut in favor of higher base-pay rates, but employees said it was "important to our success as a team," airline CEO Doug Parker and President Scott Kirby said in the letter.
"Although we continue to believe the most effective way to increase compensation is through higher base pay, we recognize there is a team-building component to profit-sharing," they said.
American Airlines earned a record profit of $7.6 billion in 2015, the company announced earlier this year.
Parker and Kirby said the new plan will not affect pay-rate proposals for contracts currently being negotiated. American Airlines is negotiating contracts with maintenance workers and baggage handlers, Scott said.
Parker and Kirby said the 5 percent of pre-tax profits that American Airlines is setting aside is smaller than the rates peer airlines set for profit-sharing but they said American Airlines plans to offer higher hourly pay rates than those peers.
Earlier this year, Southwest Airlines announced more than 47,400 workers would receive a record $620 million in profit-sharing, or an average of $13,080 per worker, in contributions to employee retirement accounts for the company's 2015 performance. Chicago-based United said its workers earned a record $698 million in profit-sharing for 2015.
lzumbach@tribpub.com
