American Airlines Group Inc. agreed to restore about $81 million in pay raises lost by flight attendants when they rejected a proposed contract last month.
The accord was reached in a meeting today between American executives including Chief Executive Officer Doug Parker and leaders of the Association of Professional Flight Attendants. The wage increase originally was part of a five-year contract defeated last month by 16 votes out of 16,000 ballots cast.
Parker’s move may be intended to help build confidence with American’s unions, which had a contentious relationship with executives at the carrier before its 2011 bankruptcy filing. Parker and his top lieutenants at American held the same positions at US Airways before the two combined a year ago.
“I think he hopes it buys a lot of trust,” said Bob Mann, head of aviation consultant R.W. Mann & Co. in Port Washington, New York. “Perhaps it’s because the defeat was by such a slim margin and obviously seemed to be a disappointment. This will end up buying a lot in a working relationship.”
“Today’s announcement is the beginning of a new chapter,” the union said in the note to members. The APFA represents 24,000 flight attendants.
American said in a statement that “with this action behind us, we can look forward to the year ahead and beyond as one team, and with great momentum as we continue our integration plans.”
The attendants’ new contract, imposed by a panel of arbitrators earlier this month, included $112 million in annual improvements instead of the $193 million in the rejected proposal. A prior agreement that capped contract value meant arbitrators had to trim $81 million from the defeated accord, achieved by reducing planned pay increases.
The new pay scales, effective Jan. 1, include a top hourly rate increase to $53.52 from $50.17, the union said in a message to members.
The added pay gives American’s attendants “the highest hourly rates among our network peers,” the company said in its statement.
The carrier, based in Fort Worth, Texas, also is evaluating a contract counterproposal offered yesterday by the Allied Pilots Association, and could move those talks into arbitration if an agreement is not reached soon.
American last month dropped part of a contract proposal to the APA, saying pilots don’t yet fully trust the airline’s management, a perception it hoped to change.
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