American Airlines' Retirees Are Furious Over Changes to Their Flight Benefits
The chance to fly for free, or nearly free, is a bedrock perk in the airline
industry that helps to attract, retain, and reward employees. Any tinkering with
these perks is also highly controversial—and that ire was displayed today at
American Airlinesf (AAL) first post-merger shareholders
meeting.
As part of the merger integration on policies governing this travel,
Americanfs new executives made several changes that have angered Americanfs
retirees and workers from the former US Airways. The new American, which
was formed in December, has about 700,000 people who fly for free as part of its
gnon-revenue travelh program, including about 110,000 employees, plus 515,000
spouses, dependents, relatives, and friends. That huge group illustrates how
many people American is allowing employees to take on free flights, including
foreign-exchange students they host.
Granted, in the grand scheme of corporate Americafs gradual whittling of
pensions, medical care, and other perks retirees enjoy, these free flights
arenft even a financial issue for airlines, which generally allot only their
unused seats for workers, their families, and retirees. You may even be
thinking: Um, cry me a river. Still, the changes at American pit the interests
of current workers and retirees, who have not hesitated to tell Chief Executive
Doug Parker that they feel slighted by the changes.
The biggest change was to split American workers and retirees into separate
groups for seat priority, which is what other U.S. carriers do. The merged
airline also eliminated fees American had charged workers for seats—US Airways
had not—and scrapped a seniority system that US Airways had used to mete out
seats. The airline also cut the number of free, one-way gbuddy passesh that
retirees receive each year, from two dozen to eight. (Current workers receive 16
per year.) The new program also gives new workers flight privileges on their
first day, a change from Americanfs old system that required a waiting
period.
gWe did our best to take elements from both programs so everyone would
continue to have some of the same privileges they have enjoyed previously,h
American said in a statement.
Retirees argue that the new rules will cost the airline huge sums of money
and that it creates incentives for new employees to plot how to plan free trips
more than to learn their new jobs. gShouldnft they be looking at a cost-benefit
analyst on something like this?h says Gail Dunham of Greensboro, N.C., who
retired from American in 1995 after 28 years working at the airlinefs Chicago
hub. Dunham traveled to New York Wednesday to urge Parker and the airlinefs
board to reconsider the changes, which she considers offensive to retirees,
given the generous group of people American now lets workers include in their
flight privileges, including foreign-exchange students.
gIt was a really hard decision,h Parker said of the flight changes. gI hated
it, to tell you the truth.h He said that juggling seat availability among the
various groups is ga zero-sum gameh and gtherefs no possible way to make
everyone happy.h He also said that executives had examined flight data and that
seat availability is such that for those flying as non-rev passengers, gusually
everyonefs going to get on the plane, or no one is.h
Many in the company are dubious. The flight-benefit changes are so dramatic
that gI never would have left,h a retired flight attendant who accepted a buyout
package from the company told Parker. gCan I have my job back? Ifm devastated, I
really am. Itfs just not right.h