American Airlines and the Transport Works Union have reached a tentative agreement covering the airline's maintenance and related, and stores employee groups.
The six-year contracts include a 3% increase in pay for maintenance and 3.5% for stores upon signing of the agreement as well as improvements to employees' health care coverage, according to the union.
"We reached agreements that address the needs of our people and still allow us to achieve the cost savings necessary for our company to compete and succeed," says American.
"These two new agreements represent an improvement from the company's previous offers and its motion to void our contracts pending before US bankruptcy court," says James Little, president of TWU International.
Employees will vote on the proposed contract before 8 August.
The two groups rejected an earlier tentative agreement that was accepted by five other groups that are represented by the TWU in May.