American, pilots union reach 'agreement in principle'
FORT WORTH, Nov 10, 2012 (Menafn - Fort Worth Star-Telegram - McClatchy-Tribune Information Services via COMTEX) --After weeks of negotiations over issues of pay and work rules, American Airlines and its pilots union said Friday they have reached an "agreement in principle" on a new contract.
Details of the new agreement have not been released although the deal likely includes pay raises in exchange for productivity improvements and possibly the expanded use of regional jets.
In a hotline message sent to pilots, the Allied Pilots Association said its board of directors voted to present American with a counter-proposal on Friday afternoon. The Fort Worth-based carrier responded by agreeing to the proposal.
"The proposal we prepared was comprehensive and will level the playing field for American Airlines to compete successfully against United and Delta airlines and also recognizes the value that the profession brings to the corporation," said APA President Keith Wilson at a press conference on Friday. The board voted 13 in favor, two against and one absent to send the counter offer.
The APA board will vote next Friday whether or not to send the agreement-in-principle to its members for a ratification vote, Wilson said. He said the process could be completed within the first two weeks of December.
American spokesman Bruce Hicks said the carrier was pleased to reach the agreement.
"We worked hard with the APA's negotiating committee to structure an agreement that addresses the priorities identified as most important to our pilots, while staying within the economic framework supported by the Unsecured Creditors' Committee to ensure American's successful restructuring," Hicks said.
A deal with the pilots would help American conclude a major part of its restructuring effort. The pilots are the airline's only union that has not agreed to a new cost-cutting contract, while mechanics, flight attendants and other work groups signed off on deals.
In August, the pilots rejected an offer that included pay raises and a 13.5 percent equity stake in the airline in exchange for higher employee contributions for healthcare and expanded codesharing. Members voted it down with 61 percent against and the head of the union stepped down.
Subsequently, U.S. Bankruptcy Judge Sean Lane ruled that American could reject its pilots contract and impose work-rule changes that the carrier deemed necessary to restructure. In the following weeks, the carrier experienced substantial operational problems, with thousand of flights delayed or canceled partly due to pilots increasingly reporting minor maintenance issues, although the union denied coordinating a work slowdown. The two sides eventually returned to the bargaining table and American deferred some of the work-rule changes while the parties negotiated.
On Friday, the APA board also received a briefing from the Unsecured Creditors Committee lead counsel, Jack Butler, but Wilson declined to elaborate on the meeting, saying Butler briefed the board on procedures.
Despite reaching an agreement-in-principle with American, Wilson reiterated that the APA board continues to support a potential merger with US Airways. The Tempe-based carrier has signed a non-disclosure agreement with American to discuss a possible merger. The carrier just this week received a one-month extension to its exclusive period to file a reorganization plan.
Earlier in the week, the APA said it did not agree with the proposed use of 79-seat regional jets and a potential cap on wide-body-aircraft pay increases in the middle of the six-year contract. American wants to expand the use of third-party carriers to fly regional jets while the union wants to limit their use.
Andrea Ahles, 817-390-7631
Twitter: @Sky_Talk
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