American Airlines CEO Rejects Criticism of 'Unprecedented' Flight Crew Pay Hikes
Skift Take
American Airlines CEO Doug Parker is playing the long game. Surprise pay hikes for pilots and flight attendants will cost roughly $350 million in 2018 and 2019. But if airlines truly want to avoid more customer service-related dramas, one way to get there is to adequately compensate your workforce.
As American Airlines' stock price fell 6 percent mid-day, CEO Doug Parker defended what the airline characterized as an "unprecedented step" taken Wednesday to raise the hourly pay of pilots and flight attendants outside of negotiations with more than two years left on their contracts.
Officials said the wage increases would cost American $230 million in 2017, and $350 million for 2018 and 2019. Flight attendants' hourly wages will jump 5 percent on average while pilot pay rises 8 percent.
Parker acknowledged to analysts and investors during the airline's first quarter earnings call Thursday that the move "might surprise and even dismay some of you because it adds costs to our airline."
But Parker said pilot and flight crew salaries at American had been lower than at other airlines and the move was necessary for rebuilding trust and encouraging an engaged workforce.
"It's the right way to
