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American Airlines, mechanics union reach tentative $4.2 billion contract deal

Stock MarketsJan 30, 2020 09:57PM ET
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© Reuters. An American Airlines airplane sits on the tarmac at LAX in Los Angeles

By Tracy Rucinski

CHICAGO (Reuters) - American Airlines Holdings Inc (O:AAL) and its mechanics union announced tentative joint collective bargaining agreements on Thursday covering five maintenance and fleet service groups after more than four years of often bitter negotiations.

The agreements are worth $4.2 billion and offer more than 30,000 employees industry-leading wages, benefits, work rules, job security and retirement income, the union, the TWU-IAM Association, said on its website. They are still subject to ratification by union members.

American's chief executive, Doug Parker, said in a statement that the maintenance and fleet service employees "deserve contracts that include meaningful improvements in pay, quality of life and job protections."

"The tentative agreements deliver on all of these — and more," Parker said.

Parker has been under pressure to reach contract deals with the airline's pilots, flight attendants and mechanics. The talks with mechanics were acrimonious at times, with the airline filing a lawsuit against the union in May accusing it of staging illegal slowdowns after stalled contract negotiations before a federal mediator.

The union denied the accusations in court, and the parties returned to federal mediation in September.

One major sticking point had been a push by American to outsource future maintenance work, something the union said will be protected under the new agreements.

With the mechanics' deal under way, American can now turn its full attention to negotiations with its pilots and flight attendants. Talks with those two groups began at the start of 2019.

Hundreds of members of the Allied Pilots Association (APA), which represents 15,000 American Airlines pilots, picketed at the Dallas Fort Worth International Airport on Wednesday, expressing their frustration at the lack of a new contract.

In an escalation of tension, the pilots union filed a lawsuit against American on Thursday, demanding that the airline stop flights to China as health officials declare a global emergency over the rapidly spreading coronavirus.

American on Wednesday said it would suspend flights from Los Angeles to Beijing and Shanghai from Feb. 9 to March 27, but it is still flying to China from Dallas.

American Airlines, mechanics union reach tentative $4.2 billion contract deal
 

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