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American Airlines Absorbs Reno

August 31, 1999

FORT WORTH, Texas (AP) _ American Airlines absorbed Reno Air Inc. today with little effect on the schedule of the nation’s second-largest carrier despite the airline’s inability to reach agreement about the deal with its pilots.

As part of the transition, white Reno jets sported American decals and airport signs were changed over in the middle of the night.

``There are no vestiges one would see of Reno,″ said American spokesman John Hotard. ``The integration has proceeded very smoothly since midnight. Operationally the airline is doing very well.″

The purchase of tiny Reno has been a sore point between American’s parent company, AMR Corp., and its pilots.

The dispute reached a boiling point in February when about one-quarter of the 9,500 union pilots called in sick to show their dissatisfaction with the company’s dealings.

The sickout stranded hundreds of thousands of passengers around the globe and cost the company $225 million. It was halted by a federal judge who oversaw the institution of a permanent injunction and fined the Allied Pilots Association $45 million for ignoring his order to return to work.

The Reno issue has been stressful for pilots concerned with their job security. To address those concerns, APA has been in mediation with the company over the merger for months.

Talks continued today even though the integration had begun. That’s so APA can continue to weigh in on American’s purchase of tiny Reno, a union spokesman said.

``The thing is we’re going to have to look at how they go about it without an agreement,″ said Drew Engelke, a pilot with American and a union spokesman. ``If they pick and choose the things out of the agreement that benefit only them, that would be problematic. If they comply with the contract right down the line that would be new and exciting.″

The pilots can’t strike, or engage in a work slowdown or another sickout over the Reno issue because the injunction remains in effect.

Still, APA does have some legal avenues it could pursue. The union could file grievances or ask a judge to intervene if contract infractions occur, Engelke said.

Some insiders say the mediated talks are continuing in part to satisfy U.S. District Judge Joe Kendall, who has set a hearing on Nov. 15 to determine whether certain individuals should be held liable for the sickout.

The judge has already fined the union president and vice president $15,000 in connection to the sickout and is expected to consider whether 23 other union officers should also be liable.

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