Feb. 12 (Bloomberg) -- Pilot union leaders at American Airlines Group Inc.’s regional unit rejected a proposed contract requiring labor concessions and said they would begin helping members find jobs at other carriers.
American sought givebacks to cut operating costs at American Eagle in exchange for adding more large regional jets, the Air Line Pilots Association told members in a message today. Eagle pilots had agreed to concessions while former American parent AMR Corp. reorganized in bankruptcy before the December merger with US Airways Group Inc.
Union chiefs’ rejection means members won’t vote on the offer. AMR’s contract with American pilots limited most of Eagle’s flying to jets with 50 or fewer seats, which are costly to operate at current fuel prices and disliked by passengers. Plans to divest Eagle were disrupted when Fort Worth, Texas- based AMR sought court protection in 2011.
“Our pilots decided they were not willing to work for less than the company is already paying our peers,” union Chairman William Sprague said in the message. “We will now begin the process of assisting our pilots in identifying alternative career options within the industry.”
American didn’t immediately comment on the union’s move. In exchange for the concessions, American had agreed that Eagle would get 60 new, 76-seat regional jets from Embraer SA, larger than anything now flown by the commuter carrier.
American has “made it clear” that it wouldn’t negotiate further if the contract was rejected and that it would shrink Eagle “until it is small enough to liquidate,” the union said. Other commuter carriers also fly regional routes for American under the Eagle name.
--Editors: Ed Dufner, Stephen West