Pilots dispute crash payout

American says union misinterpreting clause in benefits guide

10/02/2001

By KATIE FAIRBANK / The Dallas Morning News

The pilots union at American Airlines Inc. said Monday that it plans to file a grievance with the airline over the amount of insurance being paid to beneficiaries of pilots killed in the terrorist hijackings.

Union leaders assert that the Fort Worth-based air carrier owes a total of $1 million to beneficiaries of each of the four pilots. But American's parent company, AMR Corp., said the payout is half that amount.

Both the Allied Pilots Association and the company agree that the basic insurance policy is for $500,000. But the dispute lies in whether an additional $500,000 should be paid in the case of terrorist attacks.

The union said a clause in the company's benefit guide, under "Terrorism & Hostile Action Accident," notes that $500,000 is "payable in addition to any other insurance you may have."

The airline said that the information in the benefits guide is just a duplication of insurance coverage provided in the APA contract.

"If that logic held together, there would also be two medical policies, two dental policies," said American spokeswoman Karen Watson.

She said American has processed the claims for the beneficiaries but has not yet sent the checks.

An arbitrator may decide whether $500,000 is the final amount, the APA told its local members in a telephone message.

"We do have a difference of opinion, but we're continuing to look into the facts of the situation," said union president John Darrah.

United Airlines Inc. has declined to say how much insurance will be paid to beneficiaries of its pilots killed in the attacks.

"We can't comment on that until we've communicated with all of our labor groups and have it all satisfactorily completed," said spokesman Chris Brathwaite.