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American, pilots resume talks
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February 9, 1999: 7:41 p.m. ET
Airline cancels 730 flights as sick-out, overtime refusal reaches fifth day
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NEW YORK (CNNfn) - American Airlines canceled another 730 flights Tuesday, including many departures from New York's busy Kennedy and LaGuardia airports, as the carrier resumed talks to end a labor dispute with pilots.
Airline officials met with representatives of the Allied Pilots Association in Fort Worth, Texas, for the first time since Friday. American termed the talks "helpful" and said airline officials would meet again with union representatives on Wednesday.
The pilots, protesting that lower salaries of pilots at newly acquired Reno Air could lead to a two-tier pay structure, have been refusing overtime and calling in sick in large numbers since last Friday.
This has resulted in a steadily increasing number of cancellations each day -- a total of more than 1,500.
Travel plans have been disrupted for thousands of fliers. The cost to the airline -- the nation's second largest -- has reached between $5 million and $10 million, according to Wall Street analysts.
Nearly 90 percent of American's Tuesday morning flights out of Kennedy were canceled, according to Richard Lanigan, who works at American's information center.
Nearly half of the 75 flights out of LaGuardia for the entire day also were canceled, including all departures to Miami until noon Tuesday.
American operates 2,250 flights, all either starting from or finishing at a domestic airport, on an average day.
Pilots at Reno Air, acquired by American's parent firm AMR (AMR) about a month ago, are paid half what American pilots earn. American's 9,200 pilots make an average $150,000 per year.
The APA, concerned that a two-tiered pilot pay scale could ultimately lead to the phasing out of the higher-paid pilots, wants the airline to eliminate the discrepancy but has offered to negotiate a transition period to integrate the Reno pilots into the system.
"Our agreement basically says that if they want to buy Reno Airlines, and if they want to operate it, that they bring the pilots under the American Airlines seniority list, and pay them benefits," said American pilot Mike Oliver.
"Outsourcing is a very big concern to the pilots of American Airlines. We don't want to see the company try and outsource the jobs to the lowest bidder," Oliver said.
The company contends it would cost $40-$50 million a year to raise the Reno salaries. It purchased the airline for $124 million.
"Rather than signing a transition agreement with APA that would allow both completion of Reno's integration, as well as compliance with our basic contract, AMR has so far stonewalled APA's negotiators on this important issue," said Rich LaVoy, president of the Allied Pilots Association.
The airline said it would raise Reno Air pilots' pay to the level of American Air pilots "as soon as the integration is complete." The company said the integration of the two airlines could take 12 to 18 months.
"We have even offered significant pay raises to Reno pilots during the integration period," the airline said in a prepared statement.
The dispute is rooted in 1992 cutbacks by the airline in which 610 American Airlines pilots, most of them serving the same Western U.S. routes now served by Reno, were laid off, a union spokesman said. Reno was formed at around the same time and American is still suffering pilot shortages.
American pilots are barred by federal law from striking over the issue of pay for Reno pilots. They are, however, allowed to refuse overtime and to declare themselves "unfit to fly." That's pilot lingo for a "sick out."
Donald Carty, AMR's chief executive, said Monday the airline may seek a court injunction to halt the pilots' job action.
Shares of AMR dropped 1-1/2 to 55-1/2 Tuesday. 
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