American Airlines, pilot union to improve tentative contract – union memo

By Rajesh Kumar Singh

CHICAGO (Reuters) -American Airlines and its pilot union have begun negotiations to improve the tentative contract agreement after the company’s CEO spoke with the union’s chief on Tuesday, according to a union memo seen by Reuters.

The Texas-based carrier’s pilots are due to start voting Monday on a new four-year deal that provides for a pay increase of about 42% and other benefits. But the Allied Pilots Association (APA), which represents American pilots, warned that the ratification of the deal was in “jeopardy” after United Airlines raised the benchmark with its own deal.

“Our respective bargaining teams have committed to working around the clock beginning tonight for the next few days to address crucial improvements to the TA (tentative agreement),” APA’s head Ed Sicher told the pilots in a memo on Tuesday.

In the memo, Sicher said American Airlines (NASDAQ:) CEO Robert Isom has “acknowledged that significant improvements must be made” to the agreement.

A union spokesperson said the talks began on Tuesday and will continue on Wednesday.

American Airlines declined to comment. On Tuesday, the company said it would work with the union to make sure its pilots were taken care of.

American’s union has said United’s contract will lead to at least a 2% pay gap between United and American pilots.

United’s back pay provisions are also better than what American has provided in its pilot deal, it said. Its contract offers more days off for junior pilots and sick time than American’s.

“Is management serious about doing what’s required? Do they understand the need for a genuinely competitive pilot contract?” Sicher wrote in the memo. “Time will tell, and it won’t take long.”

U.S. union employees are piling pressure on their employers for better contracts amid growing frustration with stagnant pay, high healthcare costs, scanty sick time and uncertain scheduling.

Airline unions negotiate their contracts in a pattern bargaining process where a deal at one carrier acts as a benchmark for other companies.

With an industry-wide pilot shortage and a booming travel demand, the unions are enjoying enhanced bargaining power.