American Airlines Cuts Its Way To Profit On Backs Of Workers


Credit: AP

Credit: AP

American Airlines’ parent company announced Wednesday that it made $220 million in profits during the second quarter, thanks in large part to cost cutting that hurts airline workers. In an effort to restructure itself after filing for bankruptcy, the airline spent 18 percent less on worker pay than it did last year, according to the AP.

American Airlines is also preparing to merge with US Airways, which, if approved by antitrust officials at the Department of Justice, would form the largest airline in the world. But workers are protesting the immense inequality between their wages and working conditions and ballooning executive pay in the airline industry.

Over 100 airline workers and supporters held a rally at US Airways’ shareholders meeting in New York on July 12 while its executives deliberated over the proposed merger. Inside the meeting, executives discussed increasing their compensation by 44 percent and granting a $19.8 million severance package for American’s CEO Tom Horton if the merger goes through, but failed to address low wages and poor working conditions for subcontracted airline workers.

The president of the union representing the airline workers, Hector Figueroa, told the protesters that US Airways CEO Douglas Parker “wants $5.5 million and the possibility of up to $86 million in total compensation for himself and other top executives. That should be an embarrassment to US Airways.”

“What about the wheelchair attendant, the cabin cleaner, the security officer?” Figueroa added. “Who is looking out for them?”

A press release from SEIU 32BJ, the Service Employees International Union affiliate that represents the workers, said the company “rewards a few executives at the top at the expense of the worker bees for the good fortunes of the entire industry.” The union says low-wage, subcontracted airline workers can make as little as $4.77 an hour, with no health insurance. Median wages are about $8 an hour, which workers say is insufficient to support their families.

By contrast, US Airways CEO Douglas Parker makes $2,640 an hour and stands to earn even more if the $11 billion merger is approved.

Because airline workers do not receive benefits, they often rely on government programs like Medicaid and SNAP to provide for their basic needs and work multiple jobs in order to keep up with household expenses. A wheelchair attendant at Fort Lauderdale-Hollywood International Airport named Rashad Grant, one of SEIU 32BJ’s members, works two jobs to support four children. “Thankfully, they are covered by Medicaid,” Grant said. “I, however, don’t have any health insurance. We also have to rely on food stamps just to be able to eat.”

In a company statement lauding American’s profits, Horton said: “I want to thank the American team, 73,000 strong around the world, whose hard work and dedication made this possible. Thanks to them, the new American is taking flight.”

Marina Fang is an intern for ThinkProgress.