Is this a blessing in disguise at American Airlines? AMR Corp. (AMR) the parent company of American Airlines posted their first 4th quarter profit in over 6 years when they eked out a small but joyous $17 million dollar profit, bringing their year end total into the black column at a positive $231 million. But with the airline slightly back on track, could this spell disaster for the company too?
American's pilot union, which is engaged in contract talks with the airline, said it was outraged that a stock-based bonus plan for American's management could pay executives more in AMR stock, the parent company of the airline, in April 2007 than the $231 million the airline earned in 2006.
Recently the pilots union and the airline’s management team could not come to an agreement that would allow American Airlines to fly non-stop from their Dallas-Fort Worth hub to China, ultimately costing them their bid. More bonuses for the executives at the airline could enrage the pilot’s union even further as contract talks continue at the airline. Union members, who agreed to $1.6 billion in pay cuts, productivity improvements and other concessions to avoid the airline's bankruptcy filing in 2003, are still upset that management has received bonus payments even as the airline’s financial health continues to struggle.
It could be interesting to see how the contract talks between the union and management continue if the executives receive those bonus payments in 2007.
Dallas Morning News
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