Efforts to resolve a contract dispute between American Airlines and its pilots union over the integration of pilots from newly acquired Reno Air Inc. appeared to have collapsed yesterday, raising the possibility the union could go to court to block the merger unless a new labor deal is reached before the end of the month.
A tentative agreement between the union and the company broke down over the weekend when the 18-member executive board of the Allied Pilots Association insisted on several "amendments" to the contract proposal that had been worked out over seven months of negotiations. American said the amendments represented major changes and would add approximately $50 million to the $124 million cost of acquiring Reno Air.
Company officials agreed yesterday to meet with private mediator George Nicolau before taking any action to unilaterally integrate the Reno operations. The merger is scheduled to be completed Aug. 31.
Nicolau, who had been hired by the two sides seven months ago, was the architect of the agreement that failed. The key issue was how much money Reno pilots would receive and when they would be integrated into the APA seniority. The APA had wanted the Reno pilots to get full pay retroactive to last Dec. 23, the date of the merger announcement. Nicolau had proposed bringing the Reno pilots into the APA pay scales at the end of this month.
The pilots' union must now decide whether it wants to return to mediation and try to negotiate an agreement, seek arbitration or request an injunction to block the merger on grounds that American is in violation of its labor agreement with the union.
APA officials were unavailable for comment yesterday.
"I don't know what we're going to do," an American spokesman said yesterday. He said the company could not integrate the Reno pilots into the APA contract without an agreement with the union, but he insisted American planned to go ahead with the Aug. 31 integration of Reno.
Neither the company nor the union would give details of the amendments proposed by the pilots. But at least one change being sought by the union would bar American from shifting routes to any low-cost carriers acquired by American.
The development represents the latest twist in a long-standing feud between between American and its pilots union over Reno Air, a small, low-cost carrier that has had a marketing agreement with American since 1994. American furloughed several hundred pilots after pulling out of a number of West Coast routes, which were then flown by Reno.
The dispute between American and the APA escalated dramatically in February when the union staged an illegal sickout, causing chaos throughout the American route system.
American won a back-to-work court order from a federal judge. But the pilots ignored the order and the union was fined $45.5 million. The fine is being appealed.