Union Requests 30.5% Raise, Signing Bonuses

Pilots at American Airlines say the pie has grown bigger... and now it's time to ask for a larger slice. On Thursday, the Allied Pilots Association sent its request for a significant bump in pay, plus other benefits, to management at the world's largest airline.

The Dallas Morning News reports pilots are asking for a 30.5% pay raise effective May 1, 2008 -- as well as a pair of five percent increases over the two years after that, plus signing bonuses -- to compensate for cuts the pilots took in 2003 in order to keep the airline out of bankruptcy. APA estimates the raises would cost the airline an additional $450 million per year, along with a one-time $400 million expense for the signing bonuses.

One union official told the DMN those costs could be offset by "fairly minimal" fare increases... but the airline isn't so sure. A spokeswoman for American said the pilots' pay request had to be balanced with American's overall labor costs, which she stated are higher than other carriers'.

"Like everything that is proposed during negotiations, APA's pay demands will be brought to the table for full discussion and a robust review by the bargaining team," aid Sue Gordon, a spokeswoman for the Fort Worth-based airline. "It's common knowledge that we have a considerable labor cost disadvantage compared to other airlines, so we'll need to balance any proposal that affects our competitive position against this fact."

"We also recognize that our pilots are concerned about achieving competitive total compensation," Gordon added.

Pilots at American took a 23 percent pay cut four years ago. That contract -- which pays pilots $136,000 per year on average, according to the airline -- is due to be revisited next May.

American posted a $231 million profit for 2006, its first annual profit since 2000, despite record-high fuel prices.

APA President Ralph Hunter notes executives and management at American have already benefited from the upswing in the carrier's fortunes. As Aero-News reported, the union was outraged when several executives earned large bonuses and stock options, which the APA values at more than $160 million.

"Other American Airlines stakeholders have already recovered their investment in our airline's turnaround," Hunter said. "It is time for our pilots to begin doing the same."

One American pilot was a bit more blunt on why pilots feel they've earned the raise.

"We honestly believe that it's fair and reasonable and very easily justifiable," said pilot Scott Shankland. "We've laid it out on the table. We've said this is what we know our pilots expect. It's a reasonable proposal, especially compared to the way they [American's executives] have been acting like pigs at the trough."

FMI: www.alliedpilots.org, www.aa.com