American Airlines Very Close To Deal With Pilots Union

The New York Times is reporting that AA is very close to a deal with it’s pilots union.  I may be whistling past the graveyard, but I think this is excellent news.

AA and the pilots have been fighting negotiating for virtually 4 years.  The pilots represent one of AA’s biggest expenses and certainly it’s biggest labor expenses.  The bankruptcy judge was due to rule today on whether AA could terminate the contract and impose harsh terms on the union.  In my opinion, the judge was pretty much a lock to favor AA based on bankruptcy law.  AA actually asked the judge to wait until next Friday to rule so that they would have more time to negotiate with the union.   Even though AA could let the judge force terms on the union, it’s very encouraging that they want a deal that everyone agrees to.  If AA has any chance of making it without a merger it’s through labor peace.

It’s being rumored that the new contract would drop AA’s cost for pilots by 17% (less than the 20% they wanted, but still significant).  The pilots would get pay raises and an agreement from AA not to furlough pilots.  It’s also supposed to allow AA to have regional carriers fly larger planes for them.  One of the ways the union has protected jobs in the past was by not allowing subsidiaries or contractors (like American Eagle) to fly larger regional jets on routes instead of narrow-body jets, thus saving the airline a ton of money by flying the right sized plane to a destination.

I’m not sure how they will avoid furloughs AND fly more regional jets, but this is real progress, and a huge step towards AA not being run by Doug Parker, the kooky US Airways CEO.

I, for one, have my fingers crossed.