American fined $23M for violating scope clause

A federal arbitrator has ordered American Airlines to pay the Allied Pilots Association $23.2 million for scope-clause violations related to its American C

By Gregory Polek • Senior Editor

March 23, 2007

A federal arbitrator has ordered American Airlines to pay the Allied Pilots Association $23.2 million for scope-clause violations related to its American Connection agreements with Chautauqua and Trans States Airlines. When the APA filed the grievance in late 2001, its scope clause required that American freeze any regional jet growth at affiliate carriers while mainline pilots were on furlough. In an effort to circumvent the contract, American changed the American Connection code to AX and began awarding those airlines Embraer RJ flying out of St. Louis.

The arbitrator, Stephen Goldberg, also ruled that American improperly inflated the number of American Eagle’s flights after 9/11 because it knew that its planned furloughs in October would trigger a freeze on ASM growth at its regional subsidiary. The APA hasn’t yet decided whether it would collect the award in cash or use it as leverage in its next round of contract bargaining. The total equates to more than $2,000 per member.

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