Louisiana residents may be interested to know that airline giant American Airlines has agreed to pursue further negotiations with the company’s pilots union over a combined labor agreement in lieu of arbitration. Both sides have indicated that they hope the negotiations will be concluded by the end of the year.

The negotiations seemed to have hit an impasse when American Airlines insisted that the Allied Pilots Association accept the offer it outlined as a basis for continuing the contract negotiations. If the offer had been accepted, the pilots association would have had to agree to drop its counter proposal.

Although the proposal by American Airlines did include larger raises than what the company’s pilots would receive if the negotations failed, the APA was dissatisfied with American Airlines offer. The APA contended that since the pilots are not allowed to profit-share they should be offered a larger pay increase.

Complicating matters is the fact that this isn’t a typical airline-labor dispute. The APA had already agreed to a six-year labor accord when the former parent company AMR Corp. filed for bankruptcy. US Airways then agreed to merge with AMR to help the company restructure after filing for Chapter 11 bankruptcy. At the time, US Airways agreed to go over the terms of the pilot’s labor accord and improve it, provided that the AMR pilots back the merger.

Currently, this final negotiation is needed to align both AMR and US Airways pilot’s labor agreements so they can have a true joint labor agreement. If negotiations fall through, then an arbitration panel will have to draw up new co-mingled rules that ensure that the airlines labor costs do not rise above $87 million a year.

Source: The Wall Street Journal, “American Pilots, Management Agree to Keep Talking on a New Labor Deal,” Susan Carey, November 23, 2014