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American, pilots appear closer to labor agreement

FORT WORTH, Texas (AP) -- American Airlines and its pilots may be close to an agreement on a new contract.

Negotiators for the Allied Pilots Association say they hope to present a deal to the union's board of directors this week.

"Over the past four days, we have finalized contract language to the point that there are only a handful of open paragraphs still being worked," the negotiators said Sunday in a message to union members.

The two sides still haven't agreed on final language on pay raises, furlough protection and limits on American's ability to use smaller planes typically operated by regional airlines such as American Eagle and SkyWest, the message said.

American and parent AMR Corp. have been operating under bankruptcy protection since November 2011.

American's eight other union labor groups have approved cost-cutting contracts. The pilots voted down a company offer in August. An agreement with the pilots is considered a key step before American emerges from bankruptcy protection, because it would provide more certainty about American's labor costs for the next few years.

American has insisted that high labor costs were one reason for its financial problems. The company and pilots' union have unsuccessfully negotiated over a new contract since 2006.

Tension between the company and pilots escalated in September, when the company won bankruptcy-court permission to impose lower pay and benefits. There was a sharp increase in pilots filing maintenance requests shortly before takeoff, which in turn led to a spike in canceled and delayed flights. American Airlines executives accused pilots of conducting an illegal work slowdown and threatened to take the union to court.

Canceled flights have declined since September, but American continues to lag key rivals in on-time performance. On Friday, the airline apologized to customers for the problems and offered them double miles for flights taken before the end of the year.

The pilots' union took out a full-page advertisement in Monday's editions of USA Today to make its case for a favorable contract. The ad, signed by a 24-year company pilot and retired Air Force colonel, reprised pilots' longtime anger over 2003 concessions, and it calls the offer that was rejected this year "an attack on our profession."

American did not immediately respond to requests for comment.

US Airways Group Inc. is pushing to merge with American, and the companies have been discussing the possibility for more than two months, but have not commented publicly on the talks.