2023-07-19 07:56:38 ET
American Airlines Group ( NASDAQ: AAL ) is on watch after the Allied Pilots Association union warned on Wednesday that the ratification of the company's new contract deal is in jeopardy due to United Airlines ( UAL ) raising some of the labor benchmarks with its own deal.
American pilots are due to vote from July 24 to August 7. The proposed contract is effective for four years and will be amendable on August 1, 2027. The new contract calls for pilots to receive backpay, based on eligible earnings, 4% from 2020, 4% from 2021, 14% from 2022, and about 21% for 2023 in the three months preceding the date of signing.
In a memo spotted by Reuters, the union is now asking the company to further improve the contract to meet the new industry standards if it wants to have a deal that can be ratified by the pilots. "Surely AA (American Airlines) management cannot expect our pilots to accept an agreement that puts us behind our contemporaries at other airlines for at least the next four years," read part of the memo.
Shares of American Airlines Group ( AAL ) fell 0.43% in premarket trading to $18.76 vs the 52-week trading range of $11.65 to $19.08.
What to watch: United Airlines ( UAL ) will report earnings after the closing bell on Wednesday and hold an earnings conference call on Thursday. UAL management may provide an update on the terms of the company's labor deal with pilots. Read the full earnings preview .
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American Airlines may have to go back to the negotiating table with pilot union