Fri Oct 26, 2012 9:20pm EDT
* Carrier hopes for tentative contract soon
* Pilot retirement plans to freeze Nov. 1
Oct 26 (Reuters) - American Airlines, citing "good progress" in contract talks with its pilots union and hope for an agreement soon, said on Friday it would make contributions to a 401(k) plan for pilots as their retirement plans are set to be frozen.
The AMR Corp unit, which filed for Chapter 11 protection last year and is evaluating a potential merger with US Airways Group, is planning to freeze a defined-benefit plan and terminate a separate defined-contribution plan for pilots on Nov. 1.
In negotiations with the Allied Pilots Association union, the carrier has proposed replacing both plans by contributing 14 percent of pay into a new 401(k) plan.
American's Denise Lynn, senior vice president for people, said in a letter to pilots on Friday that while negotiations continue, the carrier would provide an amount equal to 11 percent of pay to a 401(k). That is the amount the pilots receive under their defined-contribution plan which is set to terminate next week.
Lynn said the move was being made in an attempt to ease pilots' uncertainty about retirement contributions when the current plans are frozen.
"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," Lynn's letter said.
In the letter, Lynn also said American hopes the board of the Allied Pilots Association union would approve a tentative agreement by Nov. 1.
Such an agreement would be subject to approval by rank and file pilots and would also have to be approved by the U.S. bankruptcy court, she added.
Pilots union spokesman Dennis Tajer declined to comment on the details of American's letter. "APA continues to focus on securing an industry-standard contract that reflects the value our pilots provide to American Airlines," he said.
American and the pilots union went back to the bargaining table earlier this month after flight cancellations and delays that American blamed on a slowdown campaign by pilots. Pilots had rejected a tentative agreement that offered concessions in August, and their union has denied calling any work slowdown.
The carrier and the union, which has said it wants a contract on par with those of rivals such as Delta Air Lines, have been negotiating on a labor contract since 2006.
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