American Airlines Tries to Mend Labor Issues With Profit-Sharing Promise


American Airlines Group Inc. gave in to pressure from employees and adopted a profit-sharing program, acknowledging the issue was thwarting efforts to improve labor relations and the carrier’s performance.

American joins the other large U.S. carriers — Delta Air Lines Inc., United Continental Holdings and Southwest Airlines Co. — in splitting some earnings with employees. Starting this year, 5 percent of pretax income, excluding one-time items, will go into the profit-sharing fund, Chief Executive Officer Doug Parker and President Scott Kirby told workers in a message Wednesday. The first payout will be in early 2017.

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The program is an abrupt reversal for Parker, who as recently as January defended the company’s decision to pay higher base rates instead of offering profit sharing. Such programs, he has said, are subject to changes in travel demand and should not be a basis for compensating employees. Executives since have realized that division over the issue was derailing their push for a cultural change at American.

“We are taking this step because we have heard from many of you that a profit-sharing plan is important to our success as a team,” the letter to workers said. By excluding profit sharing, “we inadvertently have eliminated some of our shared sense of teamwork — and that was never our intent.”

Separately, the airline announced plans Wednesday to raise flight attendants’ pay by 6 percent, effective April 1 and subject to union approval. The hourly wage for the most highly paid flight attendants would climb to $60.13 from $56.69, the carrier said in a letter to employees.

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