American Airlines union outlines plan to restore pay

Oct. 24--More than a year into contract negotiations, American Airlines Inc. and its pilot union are as far apart on the issues as they've ever been.

The discussions between the Allied Pilots Association and airline have been sporadic, and increasingly bitter, since they began in June 2006.

On Tuesday, the union presented the company a proposal on pay and benefits. It outlined a plan for pay "restoration," which would index pilots' pay to inflation dating back to 1992. The pilots' proposal would raise pay by 2.68 percent compounded each year for each of the past 16 years, or a total of roughly 53 percent.

The pilots decided to go back 15 years because their pay rates then were similar to today's rates.

"The pay rates in 1992 were slightly more than our current pay rates," APA spokesman Karl Schricker said. "We're operating under pay rates essentially identical."

A 12-year captain on the MD-80 made $159.73 an hour in August 1992. A 12-year captain on the same aircraft as of May this year made $158.85 an hour.

"Inflation kills you. I think a lot of people understand that as they watch gas prices go up. If you don't have pay that keeps up, you have pay cuts," Mr. Schricker said.

American spokeswoman Tami McLallen said the company would not address the union proposal during the three days of talks scheduled for this week.

"The items they've proposed would dramatically increase our pilot costs," she said. "I think it's important to understand that any proposals about pay increases need to be closely linked to productivity increases."

American made a contract offer a couple of weeks ago that did not include pay raises but would allow pilots to make more money if they worked more hours.

Ms. McLallen said American can give no timetable for a response, but "any proposal on pay would be linked to productivity."

Pay has been a volatile subject at American. Last month, the pilots' union sent a scathing letter about performance-based stock awards given to executives of the airline's parent company, AMR Corp. The bonuses were valued at around $250 million at the time the shares were issued.

"Enjoy your blood money and your union-busting meetings. We'll see you in court, in the newspapers and on the picket line," said the Sept. 18 letter to Gerard Arpey, chief executive of AMR.

Pilots, whose pay rates were cut 23.5 percent in 2003, contributed savings estimated in 2003 at $660 million a year. The union said in a letter to its members Tuesday that managers continue to get pay benefits, while workers do not.

"I'm sure management would be happy to talk about big numbers. In fact, the CEO's purchasing power has gone up 560 percent since 1992," Mr. Schricker said.

The union's new proposal replaces one submitted May 3 that called for a 30.5 percent increase in pay rates, annual 5 percent pay raises, a signing bonus and other improvements to the union contract.

The union expects to present more proposals during these talks. Five additional days of negotiations are scheduled in November. The contract is amendable in May.

The airline also met this month with the Transport Workers Union, which represents ground workers. The two sides did not reach agreement and will go into traditional bargaining next month. That contract also is amendable in May.

The airline will begin contract talks with flight attendants in March.

Separately, the union and the Air Line Pilots Association, which represents American Eagle pilots, said they've reach tentative agreements with American Airlines and American Eagle on how they'll handle furloughs and recalls at the two airlines.

A previous agreement gave American's pilots the right to seek American Eagle jobs when they were furloughed from American. In exchange, American Eagle pilots had an inside path to pilot jobs at American.

Tuesday's agreement said all furloughed American pilots would be recalled to American Airlines before any American Eagle pilots could take jobs there. In addition, American pilots would have the ability to get American Eagle pilot jobs if the American pilots are furloughed.

The proposed agreement guarantees the right of American Eagle pilots to get jobs at American, once all the furloughed pilots returned to American or declined the offer. The airline currently has 2,570 pilots on furlough, according to APA.

Pilots at American Eagle, the regional partner of American, are paid less and fly smaller airplanes than American's pilots.

Staff writer Terry Maxon contributed to this report.

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