American Airlines and the Transport Workers Union have reached a tentative agreement covering mechanics and related groups.
The unions had been seeking to replace concessions made during the 2003 restructuring that kept the airline out of bankruptcy.
AA has not revealed specifics of the deal, but did say the following in a statement released Wednesday afternoon:
This tentative agreement provides our mechanics with market-based compensation, including structural increases, and enhancements to other contract items such as vacation, holidays and sick leave. It also provides American additional flexibility in its maintenance operation.
Both parties worked hard and put a significant amount of time and effort into this negotiating process to reach a tentative agreement that recognizes the interests of our TWU-represented employees and the company.
It is our understanding the TWU is recommending the ratification of the tentative agreement and will provide details regarding its terms and the ratification process to their members in the coming days.
Next, the contract must be ratified by the more than 11,000 members of the mechanics and related group. That process could take weeks or even months to complete.
The mechanics are one of several groups of ground workers at American that are represented by the Transport Workers Union. A union spokesman, Jamie Horwitz, said the company's report was "premature."
American has been in long-running contract talks with pilots, flight attendants and ground workers.
Last month, the National Mediation Board scheduled more talks between AA, the TWU and the Association of Professional Flight Attendants after the unions had asked to be released from mediation.
American Eagle, which is treated independently of AA, reached tentative agreements with three of the four TWU unions earlier this year. Those contracts are currently out for ratification. The fourth group is still in negotiations.
Last month, Gerard Arpey, CEO of American parent AMR Corp. said his airline has "a pretty significant labor-cost disadvantage" compared to the other network carriers -- Delta, United, Continental and US Airways -- because it didn't cut labor costs through bankruptcy.
Arpey stopped short of saying American can reduce labor costs. But he predicted that his company's costs will come in line with other carriers over the term of the union contracts American is now negotiating, which will run for several years.