American Airlines and Envoy Finally Reach Tentative Contract Deal

After enduring a discussed divestiture, bankruptcy and a hostile takeover, pilots at American Airlines subsidiary Envoy Air finally reached a tentative deal for a new contract with their parent company. TheStreet airlines reporter Ted Reed breaks down the terms of the agreement, which includes a signing bonus for captains and first officers and the delay of an increase in health care costs. Reed says the contract negotiations were indicative of a pilot pay problem at regional airlines in the United States. He says that regional airlines have become entirely a cost business, competing for contracts with the major carriers on the basis of cost, which puts pressure on pilots' pay.