American fined $23M for violating scope clause

 - March 23, 2007, 12:31 PM

A federal arbitrator has ordered American Airlines to pay the Allied Pilots Association $23.2 million for scope-clause violations related to its American Connection agreements with Chautauqua and Trans States Airlines. When the APA filed the grievance in late 2001, its scope clause required that American freeze any regional jet growth at affiliate carriers while mainline pilots were on furlough. In an effort to circumvent the contract, American changed the American Connection code to AX and began awarding those airlines Embraer RJ flying out of St. Louis.

The arbitrator, Stephen Goldberg, also ruled that American improperly inflated the number of American Eagle’s flights after 9/11 because it knew that its planned furloughs in October would trigger a freeze on ASM growth at its regional subsidiary. The APA hasn’t yet decided whether it would collect the award in cash or use it as leverage in its next round of contract bargaining. The total equates to more than $2,000 per member.

The use of the AX code by American triggered a similar grievance by the pilots of American Eagle in 2002. Their claim centered on the premise that American did not conduct sufficient due diligence to establish whether Eagle controlled enough resources to assume all the feeder responsibility in St. Louis after AMR bought TWA.
The arbitrator ruled against the pilots in that case. However, the Eagle ALPA MEC has filed another grievance over American’s lease to Trans States of 10 Embraer ERJ-145s that previously flew with the wholly owned subsidiary. The company executed that move in a further effort to sidestep the APA restriction on Eagle flying.

Still flying 21 Bombardier CRJ700s, the Eagle pilots will know on May 1 whether a deal signed by the mainline pilots in return for post-9/11 pay concessions will result in the transfer of the 70-seat jets to American. The agreement, signed in March last year, gave the APA one year to convince mainline mechanics and flight attendants to accept pay cuts to meet stipulations that the move remain “revenue neutral.” The APA gained a two-month deadline extension, but appears to have made little progress in convincing the other groups to accept the plan.