American Air’s pilots vote no-confidence in CEO, executives

Bloomberg

The leaders of American Airlines’ pilot union voted no-confidence in Chief Executive Officer Doug Parker, citing pay and scheduling problems, delays in implementing their full contract and a “toxic” company culture.
“The straw that broke the camel’s back was Parker skipping last week’s meeting with President Trump and other airline industry executives at the White House,” the Allied Pilots Association said. American has said that Parker chose instead to address a previously scheduled gathering of 1,600 of the airline’s managers.
The vote widened a gap between the pilots and management, who have been at odds over Parker’s refusal last year to consider a pay raise after aviators at Delta Air Lines Inc. and United Continental Holdings Inc. moved ahead in compensation. American’s union supported Parker as he pushed to merge US Airways, where he was CEO, with a bankrupt American Airlines in 2013.
“The relationship has broken down over a period of years, and this is just more evidence of that,” said Robert Mann, president of aviation consultant R.W. Mann & Co. While no-confidence votes often are largely symbolic, “it does show there is no longer just an undercurrent, but an overt disaffection with the direction of the company.”
The union board vote followed Delta’s distribution of more than $1 billion in profit sharing to employees. American will share $314 million with its workers this year, the first such payout since 2000.
American Airlines Group Inc. and the union share a goal that workers have the opportunity for “a prosperous and inspired career with lifetime employment for those who desire,” the carrier said in a statement.
“We have a solid foundation in place upon which to build and are pleased with the progress thus far,” the airline said. “Therefore, further public dialogue serves no purpose.”
American fell 1.7 percent to $46.59 at 2:27 p.m. in New York, as most other U.S. carriers also declined. The stock rose 25 percent in the 12 months through Monday, compared with a 32 percent increase in the Bloomberg U.S. Airlines Index.
The union has complained that parts of its 2015 contract still haven’t been implemented, that some pilot checks are incorrect by thousands of dollars and that the airline hasn’t responded to a growing number of grievances. The resolution, which was approved Monday, also cited the airline’s debt, eroding employee morale and declining customer satisfaction.
“We’ve watched Mr. Parker and his team being out-managed by our competitors’ executives and have lost trust in their ability to lead and protect the interests of American Airlines employees and shareholders,” union President Dan Carey said in a statement.
Unions representing more than two-thirds of Southwest Airlines Co.’s workforce last year called on Chief Executive Officer Gary Kelly and Chief Operating Officer Mike Van de Ven to step down, for focusing too much on cost controls and for using cash to buy back shares instead of speeding updates to aging computer systems.
American’s flight attendants are set to picket at four of the airline’s hub airports Tuesday over a compensation dispute and new uniforms that some workers say have caused allergic reactions.
The pilots’ union vote was reported earlier by Street.com.