American Airlines rejects pilot contract

Dallas -- American Airlines has rejected the contract proposal from its pilots' union, saying it was far too costly.

The carrier, which has its headquarters in Dallas, said the package would increase its pilots' costs by more than $1.4 billion a year and couldn't be sustained.

American's pilot cost per hour would be more than that of competitors Delta Air Lines and Continental Airlines combined, the company told the Allied Pilots Association Thursday.

The union proposed raises that it said would return American's pilots to 1992 pay rates, adjusted 2.68 percent annually for inflation, The Dallas Morning News said. That would have increased the pilots' pay rates more than 50 percent from 2007 to 2008, with 6 percent raises and cost-of-living adjustments annually after that.

Meanwhile, contract negotiations get under way between American and the Transport Workers Union for mechanics and other ground workers.

Employees were forced to accept deep cuts in pay and benefits in 2003 to help keep American out of bankruptcy.

© 2007 United Press International.