Pilots reject, mechanics approve contract with American Airlines

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by DAVID KOENIG

Associated Press

Posted on August 8, 2012 at 1:02 PM

Updated Monday, Nov 11 at 3:45 PM

DALLAS (AP) — Pilots for American Airlines expressed their anger with management by overwhelmingly rejecting the company's final contract offer, but mechanics approved a contract by a razor-thin margin.

American said it was disappointed with the pilots' vote. American will ask a federal bankruptcy judge to let it set pay and other working terms for pilots.

The Allied Pilots Association said Wednesday that the vote against the contract was 4,600 to 2,935. American offered the pilots pay raises and a 13.5 percent stake in the new company in exchange for more flexibility to shift flying to partner airlines.

Many pilots hope that American will be forced into a merger with US Airways. Some believed that ratifying the offer from American would have strengthened the position of American's management and made a merger less likely.

The Transport Workers Union said mechanics voted 50.25 percent to 49.75 percent to accept a contract that gives them 3 percent raises. Maintenance stock clerks ratified their contract by 79 percent to 21 percent.

"We are disappointed with the outcome of today's APA voting results, as ratification of the pilot tentative agreement would have been an important step forward in our restructuring," said Bruce Hicks, a spokesman for American parent AMR Corp. He said the company would now wait for a ruling by U.S. Bankruptcy Judge Sean Lane on rejecting the company's current pilots' contract.

The board of the pilots' union had endorsed the contract by a 9-7 vote after first opposing it. On Wednesday, union leaders huddled to plan their next step.

Union spokesman Gregg Overman said pilots were concerned about the long term of the contract — six years — and a potential two-tier pay scale with lower pay for pilots of new Airbus A319 aircraft that the company is expected to add to its fleet.

But the overarching theme of Wednesday's vote was more visceral: "It's a decade's worth of accumulated frustration with management," Overman said.

Anger against AMR management runs deep at American, the nation's third-largest airline. Workers have not forgotten that several years ago, hundreds of management employees got stock-based bonuses — a few high-ranking executives got millions — after the unions had accepted deep pay cuts to keep the company going.

Still, most leaders at the unions for pilots, flight attendants and ground workers favored ratification. They said that the deals, while painful, were better than terms that American would impose with the bankruptcy judge's approval.

"Nobody is happy with a concessionary agreement, and our members are still waiting to see a business plan (from American) that instills confidence," said James C. Little, president of the Transport Workers, whose members approved contract offers. "But this result is a lot better than what our members would have faced with a court-imposed solution."

The bankruptcy judge is expected to rule by Aug. 15 on American's request to throw out any contracts with unions that have not ratified new deals. The judge could delay ruling for a few days until flight attendants finish voting Aug. 19. Five groups of ground workers ratified concessionary contracts in May.

American hopes to cut its annual labor costs by 17 percent, or nearly $1.1 billion, and boost revenue through new partnerships with other airlines that it believes will increase ticket sales.

American said in March that it wanted to eliminate 13,000 union jobs, but it has reduced that number in negotiations to about 7,800, a spokesman said. It also wants to cut 1,200 nonunion jobs.

AMR and American filed for bankruptcy protection in November.

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