American Air, Union in Tentative Pact

FORT WORTH — AMR Corp.’s American Airlines on Sunday reached a tentative labor agreement with the union representing about 15,000 of its mechanics and related workers.

The three-year proposal includes immediate pay raises of 8% to 22%, the airline and the Transport Workers Union said in a statement. The workers would get 3% raises in the second and third years.

The proposed pay increase comes as AMR, which also owns Trans World Airlines, is losing money. The company, based in Fort Worth, said last week it expects a second-quarter loss of more than $100 million and may post a loss for the full year if business traffic remains slow and high fuel prices persist.

American and the union began negotiating the contract last October and reached agreement without intervention from federal mediators. The contract, which became amendable March 1, also covers benefits, retirement and work rules.

The airline also is working with the union on contracts covering fleet service clerks, dispatchers and other ground services workers, AMR Chief Executive Donald Carty said in the statement.

American plans to resume talks with the union representing its 23,000 flight attendants Thursday. The two sides failed to reach a labor accord last week after three days of federally mediated talks, keeping the carrier under threat of a possible strike before the busy Fourth of July holiday.

The Assn. of Professional Flight Attendants said it was not optimistic about chances for a resolution before the strike deadline to the nearly 3-year-long dispute.

AMR shares fell 59 cents to close at $34.36 Friday on the New York Stock Exchange. They have fallen 12% this year.