Could American Airlines Workers Get Boeing 737 MAX Compensation?

American Airlines staff could emerge from the Boeing 737 MAX scandal as unexpected winners. Reports suggest that American Airlines will be splitting part of the compensation received from Boeing among its employees.

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American Airlines has a total of 24 Boeing 737 MAX (737 MAX not pictured). Photo: Tomás Del Coro via Flickr

The Boeing 737 MAX scandal has been bad news for pretty much everyone, besides Airbus.

Airlines have lost hundreds of millions after their Boeing 737 MAX fleets were grounded, and Boeing is in the process of negotiating compensation packages which are equally as large.

But last week, American Airlines revealed that the airline’s staff could end up better off as a result of the groundings.

As reported by The Points Guy, American Airlines spokesman Ross Feinstein revealed that the compensation American Airlines is set to receive from Boeing will likely be split between staff as part of the airline’s yearly profit sharing. Talking to CNBC last Thursday, Feinstein said,

“We expect American will be compensated for the lost earnings that the MAX grounding has caused… We anticipate that part of any compensation American receives will be eligible for profit sharing for our team.”

How much is American Airlines set to receive from Boeing?

The precise compensation American Airlines is set to receive from Boeing is not yet clear. American Airlines provided Simple Flying with a comment on its current negotiations with Boeing, saying,

“We are currently in talks with Boeing as to what that compensation looks like… and we’ll share more details as soon as they are resolved,” an American Airlines spokesperson said.

American Airlines is still in discussions with Boeing over 737 MAX compensation. Photo: Eric Salard via Flickr

On 24 October, American Airlines estimated that the Boeing 737 MAX groundings would cost it $540 million over the course of the year. The announcement caused its shares to fall by around 2% on the day.

Taking this cost estimate into account, the Boeing compensation package may well be a couple of hundred million dollars in total.

Good news for airline staff

American Airlines staff will be pleased to hear the recent news regarding a profit share. But they’re not the only group of airline staff who are set to receive a share of Boeing compensation payments.

On 12 December Simple Flying reported that Southwest Airlines had reached an agreement for its own 737 MAX compensation package with Boeing.

Although the precise compensation figures agreed between Southwest and Boeing are confidential, the airline confirmed that part of the compensation will be shared among its staff.

In total, Southwest Airlines revealed that $125 million received from Boeing would be distributed among its employees as part of the yearly profit share.

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Southwest Airlines will split some of its 737 MAX compensation among its employees. Photo: Tomás Del Coro via Flickr

In a statement, Southwest Airlines’ CEO and Chairman of the Board, Gary C. Kelly, praised the airline’s employees:

“Our People have done an incredible job managing through the MAX groundings while providing the highest levels of Customer Service and one of the best operational performances in our history.”

Last year the airline split a total of $544 million among its employees. Although profit share methodologies vary significantly between different businesses, Southwest Airlines listed a total of 58,803 employees in its 2018 annual results.

With these figures, Southwest Airlines’ 2018 profit share equates to an average of 9,251 per employee. We’ll have to wait and see if this year’s payout is as big.