American and Southwest will give each employee a $1,000
bonus as a result of the corporate income tax rate reduction that was part of
the recently enacted tax reform bill.
American said the bonuses, which will be distributed to all
non-officers of the company during the first quarter, will add up to $130
Southwest plans to distribute its bonuses on Jan. 8 at a
cost of $70 million to the company. Southwest also said it would donate $5
million to charity.
Under the tax reform, the corporate income tax rate has
dropped from 35% to 21%. American doesn't currently pay income taxes due to
losses carried forward from previous years. But CEO Doug Parker said that
rewarding employees is a move that will benefit all stakeholders in the
airline, including investors.
"In short, it doesn't feel right to receive the
positive impacts of this historic tax reform without making sure, in the clearest
most direct way possible, that those benefits are shared with the very people
who matter the most to our customers and shareholders," he said.
"We are excited about the savings and additional
capital, which we intend to put to work in several forms -- to reward our
hard-working employees, to reinvest in our business, to reward our
shareholders, and to keep our costs and fares low for our customers," CEO
Gary Kelly said.