The first big US carriers earnings are in, and the early reporters, American and Continental, did well enough for the year just closed to give profit-sharing to their people. Although American lost money for the fourth quarter, it posted full-year earnings, and Continental made money for both periods. But there the similarities end. At American, where the profit-sharing works out to $800 a person, the Allied Pilots Association (APA) has told its members to take their cheques without comment. The union’s hotline, which calls the “token” payments a smokescreen “to divert attention from the huge payouts management has been receiving,” advises its members: “When you visit your chief pilot's office to collect your token $800 bonus check, we recommend that you refrain from engaging in conversation…. If your chief persists in attempting to engage you in conversation, remind him that APA speaks for you.”
Down in Houston, where Continental is, airline officials are not yet sure of exactly how much they made for the quarter or the year because they’re still calculating changes to their pensions scheme now that the pilot retirement age has gone up five years to 65 years. They are, however, certain that their pre-tax income of $566 million will yield $158 million in profit-sharing.
Our friend Terry Maxon, who blogs for the Dallas Morning News, notes that the two carriers have very different profit-sharing formulas, and the Continental people could be getting about $4,000 each. Terry, whose cleverly named 'Airline Biz' blog is worth a look if you’re interested in the Texas trio of American, Continental or Southwest, calculated that American’s plan would set aside just $75 million for profit sharing if the airline’s pre-tax profits are $1 billion, while Continental would give out $237.5 million if the earnings hit $1 billion. Wait a moment, here, folks! When an airline’s earnings hit the billion-dollar mark, air-traffic controllers will have to start worrying because that’s when pigs will have wings and start to fly.