AMR-Eagle Pilots Reach Impasse on Divestiture Deal

 - October 10, 2011, 12:33 PM
American Eagle's current air services agreement allows for removal of 40 regional jets from the fleet each year starting in January 2014.

Talks between the pilots of American Eagle and the management of AMR over the terms of a proposed divestiture of the regional airline reached an impasse over this weekend. The vice chairman of ALPA’s American Eagle unit, Dave Ryter, told AIN that the Eagle master executive council (MEC) chose not to issue a counterproposal to management’s latest offer, which, he said, “sought to change one of the staples of the agreement by adding the ability for management to change the enhanced air services agreement without ALPA’s consent.

“In the opinion of the MEC, management’s proposed solution was unworkable and was therefore placed back in management’s hands to decide whether this request was a ‘show stopper’ or whether they could address the issue differently,” said Ryter.

The so-called enhanced services agreement would have guaranteed Eagle more aircraft for a longer period of time than the current air services agreement (ASA) between the regional airline and American Airlines now specifies. The current ASA, which the union considers “substandard,” allows American to continue to remove ATR turboprops from the Eagle fleet without replacement and gives American the right to begin removing 40 jets per year from the Eagle fleet starting in January 2014.

“If this issue can be resolved, the remainder of the proposal stands to provide the newly independent Eagle with tremendous stability in a volatile market and cost controls that provide the company with sufficient operating cash, while allowing the pilots to share in the company’s success,” added Ryter.

Along with the enhanced services agreement, the union’s proposal would provide for a so-called financial bridge, including options for either a “make whole” loan or a cash grant from the company, that would allow Eagle pilots to transition to other mainline carriers, including American Airlines, with “minimal,” if any, loss in take-home pay. 
The proposal also includes pilot profit sharing in the divested company, work rule improvements to the contract due to become amendable under the Railway Labor Act in 2013 and a complicated new wage scale designed to reduce a pilot’s motivation to train on different equipment to secure a raise, thereby reducing the company’s training costs.
Other changes include an eight-year contract duration with two amendment rounds and modification to the industry average index (IAI) pay formula to more accurately reflect industry wage trends.

“In my ten years of union work, I have yet to see such an innovative and collaborative way of dealing with issues facing both the company and the pilots,” said Ryter. “It will be truly unfortunate if we are unable to produce a product on which the pilots can vote.”