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American Air, Pilots Union to Meet With Mediators as Talks Stall

Nov. 29 (Bloomberg) -- American Airlines and leaders of its pilots union will meet with federal mediators on Dec. 6 to provide an update on contract talks that stalled two weeks ago.

The two sides have not set a date to resume negotiations since Allied Pilots Association leaders declined to send a Nov. 14 contract offer to union members for a vote, saying it “clearly” would be rejected. Talks began more than five years ago.

The National Mediation Board began overseeing negotiations in May 2008, although a mediator has not regularly joined sessions for some time because of a lack of progress. American is trying to secure a contract that will boost efficiency and reduce operating costs while the union is trying to regain some concessions made in 2003 to keep parent AMR Corp. out of bankruptcy.

“We’re not meeting with the company for scheduled negotiations, but are meeting with the NMB on Dec. 6,” Howie Schack, a union spokesman, said yesterday.

A spokesman for American confirmed the regularly scheduled status update with the board.

Under federal law governing airline labor relations, a union can’t strike until it goes through a series of steps, including being released from further talks by the NMB. Once the board declares an impasse, there are several additional steps before a walkout can legally occur.

Annual Losses

The carrier had sought to reach an agreement prior to its Nov. 16 board meeting, the last such scheduled session this year. AMR is headed for a fourth straight annual loss and has the industry’s highest labor expenses as a percentage of revenue.

Both sides have said they want to resume talks.

AMR shares have plunged 79 percent this year and analysts including Philip Baggaley of Standard & Poor’s have warned the company could face a cash crisis over the next 12 months without new labor agreements.

The airline also is in contract talks with unions for flight attendants and mechanics, and its baggage handlers and other airport ground workers are voting on a tentative agreement. American had $4.3 billion in cash and short-term investments as of Sept. 30.

To contact the reporter on this story: Mary Schlangenstein in Dallas at

To contact the editor responsible for this story: Ed Dufner at

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