Dispute Could Force American Cancellations

AMR Corp.’s American Airlines, the second-largest U.S. carrier, may be forced to cancel flights if its pilots union orders a work slowdown in response to the purchase of low-fare airline Reno Air Inc. Union leaders, who say the Reno acquisition violates the pilots contract, told members in a recorded message that talks with AMR “have not proceeded at a pace that is to [our] liking.” American’s pilots are concerned they could lose flights and jobs to lower-paid counterparts at Reno. AMR and the union resumed talks Tuesday. AMR, based in Fort Worth, is buying Reno to expand on the West Coast, Reno’s stronghold. In December, AMR completed a $124-million cash tender offer for Reno and received approval from U.S. antitrust officials. Union President Rich LaVoy sent AMR Chairman Donald Carty a letter last weekend saying that if the Reno matter isn’t resolved soon, “it would create a major dispute between us.” LaVoy didn’t immediately return calls seeking further comment. The union represents about 9,200 pilots, who earn an average salary of $150,000. AMR fell $1.94 to close at $58.44 on the New York Stock Exchange; and Reno rose 6 cents to close at $7.72 on Nasdaq.