Tentative Deal Gives Pilots 4% Raise In 2005

American Eagle pilots will get a 4 percent raise next January if the Air Line Pilots Association's(ALPA) master executive council for the carrier approves the tentative accord.

While American Eagle, a unit of AMR Inc. [AMR], and the pilots union have a 16-year master contract that expires in 2012, it is amendable this year. The union sought the certainty of a fixed raise rather than one linked to average pay scales at peer airlines. Nearly every year since the industry average index was adopted in 1997 there has been a grievance challenging the calculation, said John Magee, an ALPA spokesman.

In the second year, the raise will be the index plus 1 percent, he said. In the final two years, the raises will default to the index.

The new agreement also increases the company contribution to the pilot's 401(k) accounts.

"We believe it is cost-competitive with the industry," said Eagle spokeswoman Lisa Bailey.

In 2000, the wage amendments were reached only after binding arbitration. The two sides had reached a tentative pact but it was rejected by the membership. Magee said the members this year do not get to vote on the amendments.

Early in the talks, ALPA tried to change the scope clause which limited American Eagle's use of 50-seat regional jets (RJs). Current contract language splits the flying of the RJs between American Eagle and regional airlines flying as American Connection (CRAN, April 19). Magee said the union failed to convince the company to change the clause.