American, Pilots Give New Contract Tentative OK

American Airlines and its pilots union said they reached tentative agreement on a new contract Wednesday that, if approved, would remove the threat of a strike that’s been hanging over the U.S. travel system for months.

The agreement between American and the Allied Pilots Assn. came nearly five weeks after earlier talks broke down and American’s 9,300 pilots did walk out--but only for a few minutes, when they were ordered back to work by President Clinton.

The president also set up an emergency panel to evaluate the dispute, and the board’s mediation helped lead to the tentative agreement reached Wednesday, said Michael Cronin, the APA’s chief of legislative affairs.

Terms of the proposed deal were not immediately disclosed, pending review of the deal by the APA’s full board at a meeting Friday in Washington, Cronin said. The deal was struck only hours after the emergency board sent its recommendations to the White House.

The pact is also subject to approval by the pilots--who now earn an average $120,000 a year plus benefits--and they have already proved that tentative settlements are just that. In January, the pilots voted down a contract with American that had the blessing of their union’s directors, setting the stage for their brief strike last month.

“Whether the [new] proposal will be accepted by the board and whether it will be accepted by the membership are open questions,” Cronin said.

American, the primary unit of AMR Corp. and based at Dallas/Fort Worth Airport, confirmed that an agreement in principle was reached. “We are pleased to have a deal,” American President Donald Carty said in a statement.

If the two sides don’t end their feud by April 28, the pilots are free to strike again, although Congress could then get involved and in effect legislate a new contract.

For now, the tentative settlement is the first major breakthrough in the dispute in weeks and should provide some hope among passengers and travel agents that the stalemate is ending, analysts said.

“A settlement would be beneficial to everybody,” said Michael Boyd, president of Aviation Systems Research Corp., an independent firm that has helped the pilots union compile industry research.

“There’s no question that any reticence [among consumers] to book on American would be gone,” he said.

Shortly before the APA’s announcement, Clinton said he hoped that the emergency board’s nonbinding recommendations would help end the impasse.

“The best resolution is a negotiated settlement acceptable to both sides of this dispute,” Clinton said.

As the nation’s second-largest airline behind United, American and its 640-plane fleet carry roughly 220,000 people daily to more than 150 cities worldwide. It employs 90,000 workers.

When the pilots prepared to strike Feb. 15, American prepared to ground its fleet, which threatened to send the travel system into chaos. By that time, hundreds of thousands of travelers had already made alternate plans in anticipation of a strike.

There are two main issues in the dispute: the size of a wage hike, and whether APA pilots should be the only ones flying new commuter jets that American wants to add to its regional airline, American Eagle.

American had offered a 5% pay raise and stock options over the four years of the contract, while the union wanted an 11% increase and the options.

As for the small jets, the APA’s members want to fly them, because they see the planes and their lower-paid crews as a threat to their jobs if the planes eventually replace American’s bigger aircraft on certain routes. American Eagle pilots earn about $35,000 on average and have a different union.

But American claims it can’t stay competitive with other airlines and match their fares if its small planes are being flown by its higher-paid APA pilots.

The tentative accord came after a day of talks in Washington and weekend negotiations near Seattle that were overseen by Robert Harris, chairman of the emergency board created by Clinton.

In its report to the president, the board tried to split the difference between both sides. It recommended a 6.5% pay hike and stock options for the pilots over four years, but also said American’s “B” scale--a lower pay scale for newly hired pilots--should be gradually eliminated.

The board also said American Eagle regional planes should not be flown by APA pilots, but it recommended that American place additional restrictions on its use of the smaller planes “to enhance the job security of American’s pilots.”

Before the tentative settlement was announced, AMR’s stock closed at $84.625 a share, down $1.625, in trading on the New York Stock Exchange.

Times wire services contributed to this report.