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Airline workers could see pay bump with 737 MAX settlements

Jan. 03, 2020
2 min read
American Airlines 737 MAX stored in Tulsa C10A1001
Airline workers could see pay bump with 737 MAX settlements
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Airline workers could see a bump in compensation as carriers with Boeing 737 MAX in their fleets agree to settlements with the beleaguered jetmaker.

American Airlines is still negotiating its settlement with Boeing over the troubled jet, which has cost airlines hundreds of millions of dollars as the aircraft's grounding nears its 11th month. Once terms are reached, however, the carrier expects to share some of that amount with workers.

“As we’ve said before, we expect American will be compensated for the lost earnings that the MAX grounding has caused,” American Airlines spokesman Ross Feinstein said to CNBC on Thursday. “We anticipate that part of any compensation American receives will be eligible for profit sharing for our team.”

That would put American in line with Southwest, which has already reached a deal with Boeing for compensation related to the grounding of the MAX.

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Terms were confidential, but the carrier said it anticipated distributing about $125 million from the settlement to workers through its profit-sharing program.

“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,” Southwest CEO Gary Kelly said in a statement when the deal was announced in December. “On behalf of the Southwest Board of Directors, we are grateful to our Employees for their extraordinary efforts throughout the year and are pleased to share proceeds from our recent agreement with Boeing."

The move by carriers to share some of the compensation with employees comes after work groups have said issues with the MAX have hurt them financially.

Southwest pilots, for example, say reduced schedules at that carrier has given them fewer flights to work, costing the group a collective $100 million, according to The Wall Street Journal.