NEW YORK — Pan American World Airways has agreed to a new contract with its pilots that gives them a major stake in the company in return for $55 million in concessions, a published report said Wednesday.
Under terms of the four-year contract, the pilots agreed to $30 million in wage concessions and $25 million in the form of more flexible work rules, The New York Times reported. The pilots in return would receive a "substantial" amount of stock.
After forging the agreement with the pilots, Pan Am's board decided Tuesday to take no action on a takeover offer by Braniff Inc., the paper said.
A union coalition had persuaded the Pritzker family, which owns Braniff, to make an offer for Pan American World Airways, a unit of the New York-based Pan American Corp.
The deal with the pilots could undermine an attempt by some of the airline's other unions to find a buyer for the carrier and replace its management, headed by C. Edward Acker, Pan Am's chairman and chief executive.
Some sources speculated that the pilots agreed to the concessions because many were worried that Braniff might try to impose its contract on Pan Am pilots, The Times reported. Braniff's pilots are paid far less than Pan Am pilots and work longer hours, the paper said.
The union coalition, which included the pilots, had agreed in a letter to the Pritzkers to some $200 million in concessions a year if the family were successful in gaining control of the troubled carrier. Individual unions would still have had to ratify the concessions, however.
A spokeswoman for both the Independent Union of Flight Attendants and the four-union coalition told The Times it was unlikely the other unions would make concessions to Pan Am management similar to those agreed upon by the pilots.