AMR Pilot Union Board Considers Whether to Send Offer for Vote

American Airlines (AAMRQ) and its pilots failed to agree in talks on furloughs and other concessions sought by the carrier as it seeks to reorganize in bankruptcy.

American made a final contract offer that pilot negotiators will take back to the union’s board, the Allied Pilots Association said today in an update on its website. American made “clear improvements” from its earlier position on some items during the talks, and the board will review the proposal and decide whether to send the plan to members for a vote, the union said.

“We’re pleased that APA negotiators are taking the proposal to their board of directors,” Bruce Hicks, an American spokesman, said in an e-mailed statement. The airline declined to discuss details of the offer, he said.

The most recent round of talks began June 13. The two sides met at the request of U.S. Bankruptcy Court Judge Sean Lane, who plans to rule by June 22 on whether to throw out existing labor agreements.

The pilots joined American’s flight attendants and mechanics in failing to reach agreements during talks overseen by a second bankruptcy judge. American wants to cut annual labor costs by $1.25 billion as part of its restructuring.

American sought court permission to void its labor agreements after failing to negotiate concessions from its three main unions following the airline’s Nov. 29 bankruptcy filing. Those efforts echoed the results of contract talks going back as far as 2006.

Reduce Spending

Lane allotted three days for talks between each union and American in hopes that agreements could be reached before he rules on allowing the airline to void contracts. The pilots extended their initial three-day session to the last half of this week.

American is seeking to reduce spending in each work group by 20 percent a year, or $370 million for pilots as part of the $1.25 billion. The Fort Worth, Texas-based airline’s original proposal included laying off 400 pilots and loosening restrictions on flights made by regional partners and on the use of flight marketing agreements with other U.S. airlines.

The APA, the Transport Workers Union and the Association of Professional Flight Attendants have reached contract terms with US Airways Group Inc. (LCC), conditioned on a merger of the two airlines. Tempe, Arizona-based US Airways, which hasn’t made a formal bid for American, has said it is meeting with the carrier’s bankruptcy creditors to build support for a combination.

Members of five work groups represented by the TWU at American approved the company’s last contract offer on May 15, meaning they aren’t included in the continued efforts to toss existing agreements. Those groups included baggage handlers and other airport ramp workers.

To contact the reporter on this story: Mary Schlangenstein in Dallas at maryc.s@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net