American Airlines announces wage hikes for flight attendants and pilots

The plunge in oil prices is cutting costs for airlines because of cheaper fuel.

On Tuesday American Airlines announced plans of raising the amount it will pay flight attendants by an additional 4% points – in addition to regular raise.

Chief Executive Officer Doug Parker sent a letter to American Airlines employees, in which he highlighted the “very strong” results of 2014 which is helping the carrier’s plan on increasing wages for flight attendants.

Unions have said that Parker should make employee compensation level with the company’s performance.

However, Parker refused the idea of profit-sharing, which Delta, Southwest Airlines, and United Airlines have adopted.

Parker said:

“There are many ways to share success, but when it comes to compensation, we believe it is best to reward (workers) with industry leading wage rates – not lower wages supplemented by compensation that varies with airline profitability.”

The letter states that the hourly rates for its flight attendants will be 7% more than the rates at Delta or United. The hourly rate for first-year flight attendants will be $24.18.

The company also said that it’s negotiations with pilots has ended. Pilots will now have the choice to either have a final offer or arbitration as early as February 2015. Pilots’ pay is proposed to increase by 23% upon signing and then 3% for the next two years. Arbitration is a non-judicial (not in the courts) process for the settlement of disputes.

The Allied Pilots Association, which represents American’s pilots, said that it will meet on January 2 and 3 and decide a course of action.