Exclusive-American Airlines pilot deal in ‘jeopardy’ after United’s contract agreement -union memo

By Rajesh Kumar Singh

CHICAGO (Reuters) -American Airlines’ pilot union has warned that the ratification of the company’s new contract deal is in “jeopardy” as United Airlines has raised the benchmark with its own deal, according to a union memo seen by Reuters.

American pilots are due to start voting next week 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 over 15,000 American pilots, said the proposed pay rates as well as some quality-of-life items in the agreement pale in comparison with those in United’s preliminary deal.

“Management is fully aware that the proposed UAL (United) deal has now put the ratification of our TA (tentative agreement) in jeopardy,” the union said in the memo sent out to American pilots on July 16.

It asked the company to further improve the contract to “meet the new industry standards” if it wants to have a deal that can be ratified by the pilots.

“Surely AA (American Airlines (NASDAQ:)) management cannot expect our pilots to accept an agreement that puts us behind our contemporaries at other airlines for at least the next four years,” the union said.

A spokesperson for American Airlines said the company will work with the union to make sure its pilots are taken care of.

United’s four-year pilot deal offers cumulative pay raises of 34.5% to about 40%. It also includes provisions such as increased sick time, more days off and restrictions on involuntary and some standby assignments as the company seeks to encourage pilots to become junior captains.

Dennis Tajer, a spokesman for American’s pilots union, 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, he said.

United’s contract offers more days off for junior pilots and sick time than American’s, Tajer said.

“Reality of the marketplace has changed,” he said, adding the contract deal in its current shape “will not encourage new pilots to come to American.”

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