APFA FACTS On American Airlines Executive Bonus vs Employee Concessions

American Airlines (AA) Operations Restructuring Plan

In 2003, more than 80,000 AA employees voluntarily provided concessions totaling 1.6B in annual cost savings to avoid bankruptcy.

Flight attendants have surrendered more than $345M per year since 2003.

As a result of shared sacrifices, AA avoided filing for bankruptcy protection which would have completely eliminated shareholder value.

Over the past four years, employee sacrifices provided 6.4B to help turn the company around.

Instead of being worthless, AA parent company, AMR, share values have increased nearly 2000% since the stock bottomed out just prior to concessionary agreements.

AAs New Labor-Management Collaborative Business Model

Following the painful restructuring process, AA and its labor unions boldly set out on a new path to change the corporate culture at American.

Senior AA management referred to Union leaders as business partners and took a vow of transparency.

Labor leaders, though cautiously optimistic, took the high road to join management in returning their airline to sustained profitability.

Phrases used during this era of the Turnaround  Plan included Pull Together-Win Together, Shared Sacrifice-Shared Gain and was an attempt to build trust of the frontline employees, considered critical in the recovery plan.

Executive Compensation

Under a management only stock based performance incentive program a small group of AMR executives received nearly $100M in stock grants and cash in April 2006

This first shock wave spelled the beginning of the end of joint work between American and the APFA and Allied Pilots Association (APA). Both unions promptly pulled out of an initiative designed to seek more productivity from its employees.

The bonus payout on April 19, 2007 to only 874 elite executives is estimated at about $200M in stock awards - final calculation is based on stock price at closing on April 18.

Corporate executive compensation is getting out of control. It has increased over 250% in the past decade for large U.S. corporations.

In 2000, the average CEO to average worker pay was 511 to 1.

Association of Professional Flight Attendants (APFA) represents the 20,000 flight attendants at American Airlines – www.apfa.org