American Airlines' pay hikes spark industry stock plunge

New York

AMERICAN Airlines Group Inc sent industry stocks reeling after unexpectedly granting pay rises to pilots and flight attendants - a move that weakened the case that carriers are poised to generate steady profits.

The pay bumps will add US$930 million in costs through 2019, American said. Chief executive officer Doug Parker reversed his earlier opposition to such mid-contract increases after months of pressure from employees who argued they were falling behind counterparts at rival carriers.