American Airlines parent AMR Corp. failed to reach a labor agreement with its pilots over the weekend, pushing down its stock price and briefly triggering a halt in trading Monday.
AMR shares fell 21 cents, or 7 percent, to $2.73 in midday trading. They dropped as much as 11 percent to $3.04 earlier in the day.
The company and the Allied Pilots Association said Friday they would meet through the weekend, raising expectations for a deal. By Sunday night, however, those hopes were dashed.
American has fallen behind as other airlines benefited from a recovery in air travel and higher fares.
AMR, which hasn't earned a full-year profit since 2007, has blamed its problems largely on high labor costs, and it wants pilots to accept contract terms that will boost productivity and cover a shortage of pilots caused by a wave of recent retirements.
"Negotiations with the APA continued over the last week. Our goal was to have an agreement established by the end of the weekend and we made significant progress in our discussions on scope, work rules, benefits and other outstanding items," said Missy Cousino, American Airlines spokesperson. "While some work remains, we are optimistic and believe there is a path to an agreement. Achieving a competitive cost structure and a profitable future that creates job security and career opportunities for all employees is the company’s priority, and we will continue to work toward that end goal."
Cousino said the company and APA will meet again mid-week after the APA has an opportunity to brief their board on Tuesday.
Pilots want pay increases to make up for concessions they granted in 2003.
Union spokesman Sam Mayer said pilots were willing to help the company deal with temporary crew shortages. But, he added, "Unless you see some pretty significant pay raises, whatever (the union sends) to the membership has zero chance of ratification."
Ray Neidl, an airline analyst with Maxim Group LLC, said AMR shares appeared to be falling because of the lack of a deal with pilots.