(Updates with closing share price in eighth paragraph.)
Oct. 17 (Bloomberg) -- American Airlines said it recessed negotiations with its pilots union today after making “significant progress” toward a contract that would end more than five years of talks.
The sides will reconvene later this week after Allied Pilots Association negotiators brief the union’s board, Missy Cousino, a spokeswoman for the Fort Worth, Texas-based carrier, said in an e-mail.
Negotiations were stepped up last week as AMR Corp.’s American, the third-largest U.S. airline, sought waivers of contract provisions that would help it cover staffing shortages caused by pilot retirements. The situation provided a “window of opportunity” to conclude talks, the union said.
“While some work remains, we are optimistic and believe there is a path to an agreement,” Cousino said. Progress was made on areas such as work rules and benefits, she said.
The Allied Pilots Association declined to comment on the substance of the talks before hearing from its negotiators tomorrow, said Sam Mayer, a union spokesman.
“It’s a little premature to comment on progress or no progress,” he said in an interview. A date for resuming talks “is going to be the topic of discussion between the board” and union negotiators.
The latest round of talks ran from Oct. 11 through earlier today at an undisclosed location near the Texas-Oklahoma state line. It was the third time in the past six weeks that negotiators had met at a location away from the airline’s headquarters in an effort to reach a contract.
AMR shares fell as much as 11 percent earlier today before triggering a so-called automatic circuit breaker that halted trading briefly. The circuit breaker is designed to stop a rapid decline in one stock from spreading to other shares. AMR slid 6.1 percent to $2.76 at 4:02 p.m. in New York.
The shares on Oct. 3 tumbled 33 percent, the most since 2003, and triggered circuit breakers seven times in less than one hour. That drop was triggered by concern that a slowing economy and possible decline in travel demand could force AMR into bankruptcy.
“The stock is going to continue to swing wildly up and down until it’s either in bankruptcy or it’s out of the woods,” James Corridore, a Standard & Poor’s equity analyst, said in an interview. “There is a lot of speculation in the stock on both sides of the coin.”
AMR is scheduled to release third-quarter results Oct. 19, and analysts estimate the company will post its 14th loss in the past 16 quarters.
‘Not Our Goal’
“While we generally don’t comment on AMR’s share price performance, there is no company-driven news that caused the volatility in AMR shares today,” Sean Collins, an American spokesman, said in an e-mail. A bankruptcy filing “is certainly not our goal or our preference,” he said.
AMR said on Oct. 13 that unusually large numbers of pilot retirements in September and this month left staffing levels “critically short.” American is cutting seating capacity 3 percent this quarter and shutting a San Francisco crew base that the union said has more than 300 pilots, including those on leave. The carrier also is planning to retire as many as 11 jets next year because of the staffing shortfall.
--Editors: John Lear, Cecile Daurat
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