American Airlines and Allied Pilots Association (APA) enter 30-day cooling-off period while AA parent company AMR Corp. reports record profits of more than $1 billion.

ARLINGTON, Texas--(BUSINESS WIRE)--Jan. 15, 1997--The National Mediation Board (NMB) today declared contract negotiations between American Airlines and the Allied Pilots Association to be at an impasse, formally releasing the two parties from negotiations and beginning a 30-day cooling-off period.

At the end of the 30 days, American's pilots are free to strike. A strike could occur as early as 0001 Eastern Standard Time on February 15, 1997.

In a letter to the NMB dated Jan. 15, 1997, American's vice president for employee relations, Jane Allen, said in part, "...American withdraws its conditional acceptance and rejects the proffer" (binding arbitration). Allen went on to say, "...the tentative agreements reached by the parties did not become effective, and thus all issues between the parties in this negotiation are open."

Allied Pilots Association President Captain James G. Sovich said, "Management's announcement that it now considers `...all issues between the parties in this negotiation...' to be open to dispute is a provocative move that will not help us resolve our differences.

"It is bitter irony that management has put us on this collision course on the same day that AMR Corp. announced net earnings in excess of one billion dollars, an all-time record," said Sovich. "Frankly, we are deeply disappointed that AMR Management failed to acknowledge our reasonable settlement offer."

In addition to cost-of-living increases, Sovich said that the pilots are equally concerned about job security. "Our pilots are very concerned over the prospect of AMR Corp. acquiring regional jets for its commuter operations, given management's track record over the past few years of replacing our flying with commuter flying. For our pilots, it's a basic issue of trust."

According to Sovich, "American's pilots are offering substantial increases in productivity. In exchange, we seek the elimination of the two-tier wage scale for our junior pilots by the end of this contract, negotiated pay rates for all new jet equipment, and modest annual cost-of-living adjustments. Our pilot pay scales have been frozen for the past three and one-half years and have been seriously eroded by inflation."

AMR and the Allied Pilots Association have been in negotiations for a new contract since June 1994. "Throughout this long, arduous process, we have remained committed to keeping American Airlines profitable and competitive," said Sovich. "All we want is a fair contract. If that is not possible, our pilots are prepared to strike the airline.

"We sincerely hope that management does not force a strike," he said. "However, that choice is theirs."

As the collective bargaining agent for American Airlines pilots, APA represents approximately 9,300 pilots. Founded in 1963, the Association is headquartered in Arlington, Texas, near Dallas/Fort Worth International Airport.

CONTACT: Allied Pilots Association, Arlington

Gregg Overman, 214/988-3188 ext. 280