American Airlines, Pilots Union Reach 'Agreement-in-Principle' on Tentative Pact

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By Susanne Pagano

HOUSTON--American Airlines has reached an “agreement-in-principle” with the Allied Pilots Association on a tentative labor agreement, the bankrupt airline and union announced Nov. 9.

The union's board of directors is expected to vote within the next week on whether or not to send the agreement to the membership as a tentative agreement for a ratification vote.

After more than a month of intense negotiations, the pilots union agreed to present American's parent, Fort Worth-headquartered AMR Corp., with a comprehensive counterproposal, and management responded by agreeing to the proposal, union spokesman Gregg Overman said in a Nov. 9 online message to pilots.

“APA designed our comprehensive counter-proposal to provide our pilots with an industry-standard contract while enabling American Airlines to complete a successful restructuring and compete on a level playing field with its network-carrier peers,” Overman said.

The parties did not provide details of the new agreement.

American Airlines spokesman Bruce Hicks said the carrier “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.”

The union represents about 8,000 pilots at American Airlines and is the last work group to reach a cost-cutting labor agreement since the carrier filed for Chapter 11 protection in November 2011 (23 BBLR 1476, 12/1/11).

Members of APA overwhelmingly rejected what American called its final contract offer in August. The tentative six-year deal included pay raises, some furlough protections, and a 13.5 percent equity stake in the company after the airline emerges from bankruptcy protection (24 BBLR 1069, 8/16/12).

Judge Sean Lane of the U.S. Bankruptcy Court for the Southern District of New York then granted the airline's motion authorizing the carrier to abrogate the pilots' current collective bargaining agreement as part of the reorganization plan to cut labor costs and emerge from bankruptcy (24 BBLR 1175, 9/13/12).

By Susanne Pagano

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