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Pilots Union, American Airlines Continue Contract Negotiations

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(credit: KTVT/KTXA) Jack Fink
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DALLAS (CBSDFW.COM) – Leaders of the Allied Pilots Association will spend the weekend meeting with American Airlines management to find out more information about the airline’s final contract offer.

The board will vote next week whether to send it to the pilots for a vote, or reject it as it did two days ago.

“This is going to very big for the pilots of American if the board accepts it,” said Howie Schack of the Allied Pilots Association.

If the board rejects American’s offer, a judge will likely cancel the union’s contract.

American Airline spokesman Bruce Hicks says it prefers a deal with the pilots. “We need the consensual agreements.  We want the consensual agreements,” he said. “That’s our goal. We don’t want the judge to have to rule.”

Schack says, “The final offer on the table is better than the previous iffer of the company. It’s better than the original term sheet.  It stilll has significant issues for the pilots.”

American made its final offer weeks after the pilots and other unions reached a deal with U.S. Airways, should that airline take over American after it emerges from bankruptcy.

Under its first offer, American proposed slashing $370 million in compensation to the pilots. But in its final offer, the total cuts to pilots dropped to $315 million.

In comparison, the deal with U.S. Airways would cut pilot compensation by $240 million. American’s last offer includes pay raises, and the pension would be frozen, not terminated.

One key difference in American’s deal is pilots would receive a stake in the new airline that emerges from bankruptcy. U.S.Air’s proposal doesn’t include that provision.

Linda LaRue, a bankruptcy attorney in Dallas says,  “The stakes are very high.”

LaRue says there’s a reason American has improved its offer to pilots.

“American is trying to make a very similar deal with the unions, particularly the pilots so that the pilots union will follow along with American – perhaps so that the U.S. Airways takeover won’t happen,” she said.

Without a deal with the pilots, LaRue believes there’s a greater chance of a takeover by USAir.  “I think that’s absolutely true.”

Here’s a timetable:

The union board votes Wednesday on the contract.

If they approve sending it to their members, they’ll have six weeks for the process.

The judge has agreed to an August 8 deadline.

But if pilots reject American’s contract, then next Friday, June 29, the judge will likely cancel the unions’ contracts with American.

Pilots aren’t the only ones keeping a close eye on their contracts.

The Association of Professional Flight Attendants and two of seven units of the Transport Workers Union are also monitoring developments.

To date, they haven’t reached a deal on a new labor contract with American. Airline management says it’s open to re-starting talks with those groups.

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