October 17, 2011 / 8:14 PM / 7 years ago

AMR and pilots continue talks, shares fall

(Reuters) - American Airlines and its pilots made “significant progress” in contract talks that recessed on Monday, but investors were disappointed they did not reach a deal over the weekend and hammered shares of the carrier’s parent, AMR Corp AMR.N.

An American Airlines jet touches down at the airport in Port-au-Prince February 19, 2010. REUTERS/U.S. Navy/Oscar Sosa/Handout

The Allied Pilots Association and the No 3 airline left their remote, North Texas negotiating site in the early afternoon to return to Dallas/Fort Worth to strategize for the next round of bargaining.

The two sides were expected to resume talks mid-week, the airline said.

Both sides said negotiators made significant progress over the past several days.

“While some work remains, we are optimistic and believe there is a path to an agreement. The company and the APA will continue to build on the momentum of this progress,” American said in a statement.

Sam Mayer, a spokesman for the pilots, said the sides narrowed gaps in numerous areas. Wages, work rules, and terms on outsourcing remain unresolved.

“They are not completely nailed down,” Mayer said.

Union negotiators planned to huddle with their board on Tuesday to “go over their open items and refine our position prior to the resumption of negotiations,” Mayer said.

The airline and the union, which represents 10,000 pilots, have stepped up the pace of negotiations in recent weeks. Talks kicked into high gear over the weekend with American hoping for a deal by Monday.

AMR shares ended 6.1 percent lower at $2.76 on the New York Stock Exchange, after dropping as much as 11 percent earlier in the day.

Ray Neidl, an analyst with Maxim Group, said he believed investors were disappointed that the pilots had not reached a labor deal over the weekend.

“Maybe the stock was a bit overvalued on hopes of the talks,” Neidl said. He said large moves on a percentage basis are common for stocks trading as low as AMR shares.

Pressure has been mounting for an agreement as American has fallen further behind rivals, the biggest of which have gained strength through mergers.

Analysts estimate that AMR on Wednesday will report a loss for the third quarter, usually the industry’s strongest period due to busy summer travel.

Other big U.S. airlines are expected to report profits.

“As we have discussed, we believe the company needs competitive wage rates and a pilot agreement that enables it to adjust capacity for today’s slow growth environment,” Helane Becker, a Dahlman Rose & Co director said in a note to clients on Monday.

“It appears as though the airline has been on hold as its labor leaders and management team negotiate new contracts. We will see what happens over the next few days, especially as we hear the two sides may be closer to an agreement than at any point in the last few years,” Becker wrote.

Reporting by John Crawley and Kyle Peterson; Editing by Steve Orlofsky

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below