American Turns Down Pilots’ Merger Demands

AMR Corp.’s American Airlines rejected demands from its pilots union to provide pay and pension improvements and job protection as the carrier buys Trans World Airlines Inc. and integrates its workers.

American, in letters from two of its executives to the Allied Pilots Assn., said the union would have to work out on its own a plan to combine the pilot seniority lists for the two airlines. The carrier agreed to protect American pilots from possible furloughs.

The second-largest U.S. airline doesn’t need such an agreement to complete its pending $4.2-billion purchase of TWA. Yet failure to reach such an agreement before AMR’s purchase of Reno Air Inc. led to a 1999 pilots work stoppage, thousands of canceled flights and eventually a $45.5-million court judgment against the union.

“Improvements to pay, work rules and benefits are part of the normal contract negotiation process,” Jeff Brundage, American vice president of employee relations, wrote to the union. “We invited [the union] to discuss transition issues and have tried to address those issues in a satisfactory manner.”

A benefits proposal from the union is “unrelated to the transition and would cost hundreds of millions of dollars,” Brundage said.

Union officials weren’t immediately available to comment on the company’s response.

The union, which represents about 11,000 American pilots, said it wants protections similar to those guaranteed by UAL Corp.’s United Airlines in its pending acquisition of US Airways Group Inc. American and the union failed to agree on a plan in almost a month of talks. The carrier said it hopes to resume negotiations next week, though no dates have been set.

The Allied Pilots Assn. wants to prevent TWA pilots from moving onto their seniority list ahead of American pilots, possibly pushing American pilots to lower-paying jobs. TWA’s 2,400 pilots want to retain their seniority rankings and benefits.

American said it rejected a union request to be protected from lawsuits over the final plan for combining seniority lists.

The airline has proposed a “fence” to keep the pilot ranks separated for a specific period, dates for TWA pilots to come under American work rules and a limit on creation of pilot jobs at TWA.

AMR shares rose $1.21 to close at $36.48 on the New York Stock Exchange.