CactUS4Ever
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- Jul 29, 2009
- 183
- 78
Is it possible that the Pilots and FA at AA are Overpaid and this is why AA is bankrupt. Maybe Uas Air is paying the correct wages so they don't go CH 7 like AA will if they don't get there costs inline.Read my post again. Nowhere did I say that "all of the US people" would get huge raises. Since it's common knowledge (even among non-employees) that the US pilots and FAs are severely underpaid compared to the rest of the industry, I figured that the employees would realize that.
Estimates of the raises necessary to bring the US pilots up to the AA levels vary, but it could easily be $40k per pilot (or more). Plus the extra 4% 401(k) contribution on what they already earn (AA is 14% v 10% at US) plus 14% of the raise. With benefits, each US pilot could become $50k more costly on average. With 5,000 pilots, that's $250 million. Add to that the contract improvements that Parker offered to the APA of $87 million per year, or another $10k per pilot, on average. So add another $50 million to the US pilot tally. Now they're $300 million more expensive each year.
Parker offered the FAs $40 million per year (which they rejected) and that would not have brought them up to AA's payscale. To bring them up to AA's payscale plus the anticipated contract improvements that APFA will get could end up costing $75 million or more per year across the 6,800 US FAs. FAs make a lot less than the social security cap (unlike pilots), so raises increase their costs by the additional FICA their employer must pay.
Even if US fleet, agents and maintenance already make as much as AA, the pilots and FAs could be in line for raises that increases their cost by $300 million to $400 million per year. That soaks up the annual profits at US, and then some.
How is it that Parker has reported some profits since the merger? Pilots and FAs who are willing to work for regional airline pay.