Union, American Eagle Reach Deal to Fly E175s

 - February 1, 2014, 3:45 AM

Air Line Pilots Association union leaders and American Eagle management reached an agreement in principle last month that would guarantee the 60 Embraer E175s ordered by American Airlines go to the wholly owned regional carrier. In return, Eagle pilots would have to forego any pay raises until 2018 and accept increases to their contribution to their health insurance premiums starting next year. The pilots would, however, gain greater access to mainline jobs through a new “flow through” agreement that lifts the current limit on hiring of Eagle pilots at American to no more than 30 per month. The new 10-year contract would also ensure that 90 airplanes on which American holds options would go to Eagle in the event the mainline chooses to exercise them.

“For our pilots specifically, this agreement dramatically improves their ability to further their careers at American Airlines by enhancing the company’s industry-leading Eagle-to-mainline flow-through rights for current and new-hire Eagle pilots,” said American Eagle CEO Pedro Fabregas in a letter to employees. “The time it takes for many of our pilots to qualify and be given priority over external candidates for pilot positions at American with this enhanced flow-through will be nearly cut in half, allowing our current pilots to advance quickly at both Eagle and American. It will also help us attract the best new talent because we will be able to offer a clear career path to a mainline carrier and a positive career expectation no other regional carrier can currently offer.”

In a January 10 “Newsblast” to union members, American Eagle Master Executive Council (MEC) chairman Bill Sprague noted that the new contract’s effect on individual pilots would differ, however. ALPA planned to conduct a campaign in the weeks following the January 10 announcement to educate members on the potential consequences of the new contract language, then reconvene with American management to negotiate any modifications. Once the sides agree on a final deal, said Sprague, union leaders will then make the information available to the pilots ahead of a ratification vote.

Unlike the previous offer, which Eagle’s MEC categorically rejected, this proposal does not contain a so-called “B” pay scale for new hires. Rather, the contract contains a pay-grade cap for all captains at 12 years and at four years for first officers, except for those who have already exceeded those salary levels. The Eagle MEC justified earlier rejections of management offers on the proposal for a “B” scale similar to that accepted by the pilots of American regional affiliate PSA Airlines in return for rights to fly 30 Bombardier CRJ900s.

Apart from the promise of the 30 new jets, the PSA pilots received their own “enhancement” to the guarantees for interviews at the mainline stipulated in the old contract.

“This [PSA] deal in some ways mimics what was negotiated by Endeavor Air (formerly Pinnacle Airlines), a wholly owned subsidiary of Delta Air Lines, during [its] effort to avoid liquidation in bankruptcy,” said the Eagle MEC in a Newsblast it sent to members last year following the PSA ratification. “One significant difference is that the Endeavor pilots were compensated for many of the concessions they provided. The only potential gain for the PSA pilots in this deal is the possibility of new aircraft.