Ten-Year Contract Will Freeze Pay, Increase Health Insurance Premiums, Guarantee New Airplanes

A tentative contract has been reached between American Eagle's pilots union and the regional carrier that will freeze the pilots pay scale and boost what they pay for health insurance, but also guarantees new Embraer 175 (pictured) airplanes for the carrier.

American Eagle’s president Pedro Fabregas sent an electronic letter to employees last Friday night informing them of the agreement.

"If ratified, this agreement will form the foundations of a very bright future for not only our company, but also for our pilots by providing them new, large and modern aircraft to fly and a faster path to growing their careers at American Airlines," the letter states.
 
"The agreement will allow American Eagle Airlines to upgrade its fleet with a guarantee of 60 new Embraer 175 (E175) regional jets beginning in the first quarter of 2015. Additionally, American Eagle Airlines will operate up to 90 additional E175 jets should American Airlines exercise the options on those aircraft. The E175 is a top-tier regional product that offers a First Class cabin, Main Cabin Extra and in-flight Wi-Fi – important elements of an improved flying experience for our passengers. As one of the most fuel-efficient modern aircraft, the E175 will lower operating costs for our flying business when they begin replacing some of our smaller, less efficient 50-seat regional aircraft scheduled for retirement.
 
"For our pilots specifically, this agreement dramatically improves their ability to further their careers at American Airlines by enhancing the company’s industry-leading Eagle-to-mainline flow through rights for current and new hire Eagle pilots. The time it takes for many of our pilots to qualify and be given priority over external candidates for pilot positions at American with this enhanced flow through will be nearly cut in half, allowing our current pilots to quickly advance and grow their careers at both Eagle and American. It will also help us attract the best new talent because we will be able to offer a clear career path to a mainline carrier and a positive career expectation no other regional carrier can currently offer."

ALPA's Master Executive Council also issued a memo to members announcing the deal, somewhat less effusively. "We encourage all pilots to read this document thoroughly," said MEC Chairman Bill Sprague in his letter.
 
"The ALPA officers and leadership are preparing further communications for the pilot group in order to ensure that everyone has a complete understanding of all the facets of this AIP.  The purpose of this AIP is to allow the process of moving toward changes in our pilot contract.  Before the changes actually become effective, ALPA will conduct an educational campaign and appearance events allowing all pilots to give feedback, ask questions and gain a thorough understanding.  During this process, ALPA and the company must reach agreement on the contractual language.  At that point, the MEC will reconvene to review and approve the language.  Upon MEC approval, the language will then be made available to the pilots prior to a ratification vote.
 
"This AIP will have varying levels of impact upon different pilots in the group and will take time to sufficiently grasp.  Your leadership is committed to the education of the pilot group.  Please contact your status reps with questions, concerns or feedback and we will do everything possible to respond.
 
"The company chose to put us in this onerous position, however we will work through this together.  This agreement will live or die on its merits alone.  Even though there will be differing opinions, I am committed to maintaining an unbiased, objective perspective throughout the remainder of the process."  

Under the agreement posted by the Dallas Morning News, beginning 1/1/2018, pilots will receive 1% annual increases unless they have declined flow through.  However, Captains at longevity step 18 as of the date of signing of this agreement who decline flow through will receive the 1% annual pay rate increases beginning in 2018. However, the employee contribution for health insurance will increase one percent to 31% in 2015, then to 33% in 2016 and 35% in 2017.

FMI: www.aa.com