American Airlines reaches contract agreement with pilots of Envoy Air

MarketsAssociated Press

American Airlines Group Inc. and the pilots of Envoy Air have reached a contract agreement after a year-long dispute.

The airline and the pilots union said Tuesday that the new 10-year agreement includes an up-front cash payment for current Envoy pilots, a commitment for new aircraft, and an arrangement that would allow Envoy pilots to be hired at American Airlines. The agreement takes effect immediately.

Continue Reading Below

American has been shrinking Envoy since March, when union pilots rejected a company contract offer that they said included a pay freeze and cuts in benefits. American is trying to limit the cost of its regional service, called American Eagle, partly by outsourcing some of the flying. Envoy is one of the airlines that flies American Eagle flights.

"While this deal represents a process that none of our pilots wanted and none would have voluntarily chosen, we endorsed it as the better alternative to the continuous dismemberment and outsourcing of our flying," Sam Pool, chairman of the Envoy pilot group, said in a statement.

Envoy Air Inc. CEO and President Pedro Fabregas said that the company is pleased the pilots approved the agreement and says it lays the foundation for Envoy to become a stronger, more successful company.