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October 26, 2012

American hopes to have a tentative agreement with the pilots by November 1

American Airlines hopes to have a tentative agreement with its pilots union by November 1, the carrier said on Friday evening.

In a letter sent to pilots, American senior vice president of people Denise Lynn said talks were progressing between the two parties.

"I believe good progress has been made and we are approaching a deal that we hope the APA Board of Directors will soon agree to put out for a ratification vote," Lynn wrote.

She added that American is proposing a 14 percent defined contribution to a retirement plan in the new contract. Since there is no agreement yet, the carrier plans to provide an 11 percent contribution to a plan, similar to a 401(k), after pilot pension plans are frozen on November 1.

The Allied Pilots Association said on Friday evening that its board will convene for a special meeting at its union headquarters starting on Wednesday. The union also said it will conduct informational picketing at Dallas/Fort Worth Airport at Terminal D on Wednesday morning.

The carrier is also delaying the implementation of some contract changes including the elimination of night pay and limits to international premium pay, that were supposed to go into effect on Nov. 1. American said it is deferring these items as negotiations continue with the pilots.

Keep reading for the full letter from Lynn.

-Andrea Ahles

Dear American Pilots,

As you are aware, the company and APA have been in intense negotiations for the past three weeks. I believe good progress has been made and we are approaching a deal that we hope the APA Board of Directors will soon agree to put out for a ratification vote. As part of these negotiations, we are proposing a 14 percent defined contribution (DC) retirement benefit under the $uper $aver Plan. This would be effective for pay earned after the freeze of the A Plan and the B Plan, starting on Nov. 1, 2012.

While we hope that by Nov. 1 the APA Board will approve a tentative agreement, we will still have to wait for a ratification vote and Bankruptcy Court approval of any new agreement before we can begin to implement. In the meantime, we recognize that a new agreement will not be in place by Nov. 1 and the uncertainty surrounding retirement contributions is on many of your minds. To attempt to assuage those concerns, and to ensure there is no gap in retirement benefits for pilots when the current retirement plans freeze, in the interim the company will continue to provide an 11% contribution to your $uper $aver account and will be based on the pay you earn for work performed after the plans are frozen on Nov. 1 (subject to any applicable IRS limits). These discretionary contributions will be applied against contributions to be made under the replacement retirement plan anticipated as a part of a new collective bargaining agreement.

On a related note, you should receive a letter in the mail in the next few days discussing the way we will administer the freeze of the A Plan and B Plan. It explains that your November pay, earned for flying in October prior to the freeze, will be counted towards your A Plan Final Average Compensation, and will be the basis of your final B Plan contribution - which will be made in November. A copy of that letter is accessible here for your reference. This means that the first company contribution to the $uper $aver Plan will be made in December (based on pay earned for flying completed in November).

More detailed information about the $uper $aver Plan will be provided separately. If you have questions about this transition, please contact your Flight Administration office.

Sincerely,

Denise Lynn

 

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