American, Union Secure Interim Pay Deal for 30,000 Workers

  • Agreement covers mechanics, baggage handlers, ground workers
  • Accord includes pay increase, interim lump sum payment

American Airlines reached an interim agreement with the union for at least 30,000 mechanics, baggage handlers and other workers to provide average pay increases of 22 percent and retirement improvements while talks on a full contract continue.

The accord, which covers almost one-third of the carrier’s employees, will increase wages above those at rival carriers, according to a statement from the union Friday. It will raise pretax operating costs by $75 million this quarter and $120 million in the fourth quarter, American said in a U.S. regulatory filing.

The contract is the first for the work group that covers employees from American and US Airways, which merged in 2013. The merger, and the creation of the new union, extended the time needed to negotiate a full agreement. The interim pact means workers don’t have to wait for raises while talks continue.

“With 12 diverse work groups represented by the association, reaching a single agreement for this specific set of co-workers is taking longer than any of us anticipated,” Robert Isom, American’s chief operating officer, said in a statement. “Today’s interim agreement is unique.”

A lump-sum payment will be made to workers now to cover the period until the pay increases are implemented in November. Average pay increases will range from 15 percent to 36 percent for maintenance and related employees, 24 percent for fleet-service workers, 31 percent for tower planners and 55 percent for weight and balance planners, American said.

The union covers 35,000 workers, according to American Airlines Group Inc., while the joint association set the number at 30,000.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE