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American Airlines reaches tentative contract agreement with pilots union

Union members will vote on labor cuts in coming weeks

The tension between American Airlines (AA) and its pilots union has momentarily calmed.

Yesterday, the Allied Pilots Association reached a tentative contract agreement with the country’s third-largest airline, which wants to make major cuts in labor spending as it is still reeling from its November 2011 bankruptcy filing. The union board voted 9-7 to allow AA’s 8,000 pilots to vote on the company’s proposal—which seeks to cut $315 million in annual labor costs—beginning in mid-July.

The agreement came just two days before U.S. Bankruptcy Judge Sean Lane was set to decide whether to impose AA’s original proposed changes, which would have cut $1.25 billion in labor spending.

If the union ratifies the new deal, pilots will receive furlough protections, 14.8 percent pay raises over six years and 13.5 percent stake in the company as it emerges from bankruptcy.

Read Bloomberg and Reuters for more about the tentative agreement.


For more InsideCounsel stories about American Airlines, read:

American Airlines’ union election temporarily blocked

American defends its lawsuit against union action

Pilots’ union sues American

American Airlines files for Chapter 11 bankruptcy


Ashley Post

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