The pilots of U.S. regional airline American Eagle and the management of American Airlines merger partner US Airways have apparently reached an impasse in negotiations over a new contract, potentially delaying further an expected new regional jet order by the “new” American. Management has said if Eagle’s pilots do not accept its introduction of the “B Scale” compensation formula stipulated in its last offer, it would seek to place the batch of 76-seat regional jets with another affiliate.
“The concept of a B Scale is unacceptable and thus this document is unacceptable and shall NOT be sent for pilot ratification,” wrote Tony Gutierrez, chairman of the American Eagle pilots’ Air Line Pilots Association bargaining unit, in a “Newsblast” to members. “Further, the [Master Executive Council] hereby declines any further negotiations with a reference to a B Scale.”
Some nine months after Eagle pilots ratified a concessionary deal to help American Airlines emerge from bankruptcy, management demanded that the pilots accept new cost-cutting measures that “trend toward” the cost structure recently introduced at wholly owned Delta Air Lines subsidiary Pinnacle Airlines. That contract, recognized as one of the cheapest in the U.S. regional airline industry, serves as a benchmark toward which all Delta Connection partners must lower their own costs by 2017.
Consequently, Delta regional affiliates Republic, SkyWest, ASA and ExpressJet have told their pilots that any new contract agreement must result in cost reductions.
Describing the state of the regional airline industry as one of “disarray,” Gutierrez nevertheless urged members to recognize the need for union leaders to “engage” with management to look for a solution.
Gutierrez warned of the possibility of Eagle shrinking its flight operation into “non-existence” by following the pattern established last year with the closure of Delta subsidiary Comair. By the time Comair liquidated in September, its fleet had shrunk to some 70 airplanes—too few, said Delta management, to maintain the economies of scale needed to justify its existence. Gutierrez also reminded members the retirement/return schedule for the Embraer regional jets at Eagle will continue to result in year-over-year capacity cuts unless the airline wins a fresh allocation of new jets.
However, US Airways management apparently went too far by later demanding a two-tier, or B Scale system, by imposing pay and benefits on all new hires that would essentially match those of Pinnacle’s pilots.
“Eagle pilots know far too well that a guaranteed job at the mainline carrier can quickly be delayed by a decade or more, and further degradation of our segment of the industry not only fails to address cyclical stagnation but also severely damages pattern bargaining for our sister carriers,” said Gutierrez.
“US Airways has indicated that if the Eagle pilots do not enter into this agreement with management, then it will source these deliveries elsewhere. The burden now falls on our brothers and sisters at other carriers to take their own stand and stop further degradation of the industry by making concession after concession for the promise of new metal. We will continue to support them in this cause.”