This chart shows that the share price for AMR (American Airlines being its principle subsidiary) has recovered from the 9/11 shock and closed above $30 this week. These financials show $1.23 in earnings before interest and taxes on $22.56 billion in sales. While AMR paid no income taxes in 2006 (I presume that had NOLs from previous years), the company had $1 billion in interest expenses. This means shareholders kept $230 million in profits.
Peter Pae wonders about their workers:
When the airline industry went into a deep slump after the 2001 terrorist attacks, American Airlines’ pilots, flight attendants and mechanics agreed to billions of dollars in cuts in wages and benefits to keep the carrier afloat. Now AMR Corp., American’s parent, is back in the black, so much so that 874 top executives will receive more than $150 million in stock bonuses next week. As for the 57,000 rank-and-file employees, they’re seeing red. “We made huge sacrifices,” said Dana Davis, an 18-year American employee and spokeswoman for the Assn. of Professional Flight Attendants. The airline’s 18,000 attendants took an across-the-board 16% pay cut and gave up vacation days. “We’re not getting anything back for it,” Davis said.
The rest of this story talks about the relationship between management and labor, which is getting rather nasty. Kevin Drum comments:
Of course, if American’s workers dare to go on strike later this year, we’ll be besieged by comments from tough-minded free-market conservatives about how unions are ruining the competitiveness of a once-great American industry by making plainly irresponsible wage demands. Don’t these people understand creative destruction? And for those who like to pretend that this is all just posturing because executive compensation isn’t big enough to make a serious difference when it’s spread among all a company’s workers, I’ll do the arithmetic right here. $150 million split among 57,000 workers is … $2,600 each. Chump change for the rock jawed captains of industry running American Airlines, I’m sure, but probably not to the flight attendants.
Shared sacrifice on the downside but apparently no sharing on the upside.