[Via Bloomberg] American Airlines, the second-biggest U.S. carrier, reached a tentative contract agreement with the union that represents 10,600 baggage handlers and other aircraft service workers.
The organization is the third major employee group in the Transport Workers Union to reach an accord with the carrier this month. The agreement, confirmed by American in an e-mailed statement today, must be voted on by members of the union before it takes effect. The two sides started talks in November 2007.

American has focused on negotiating productivity improvements in exchange for lump-sum payments and smaller pay- scale increases as it tries to control what the carrier has called the highest labor costs in the industry. The Fort Worth, Texas-based airline has a $600 million labor expense disadvantage compared with competitors, Chief Executive Officer Gerard Arpey told shareholders on May 19.

“The tentative agreement addresses the interests of both our TWU-represented employees and the company,” Missy Latham, an American spokeswoman, said in the statement. Details of the agreement, which was reached early today after an all-night negotiating session, weren’t included in the statement.

Tim McAninley, a spokesman for the union, said he couldn’t immediately comment.

The accord leaves American, a unit of AMR Corp., in ongoing talks with two smaller TWU groups and the unions for its pilots and flight attendants. The airline on May 25 began asking some of its managers to volunteer for training as replacement flight attendants in the event of a strike.

American reached a tentative contract covering 11,500 mechanics on May 5, followed by agreements May 7 with 1,200 stock clerks and crew chiefs and May 8 with 90 technical specialists.