A federal mediator will determine the next steps for US regional operator Pinnacle Airlines and its pilots now that members of Air Line Pilots Association (ALPA) have rejected a tentative agreement management and negotiators reached in August of this year.

Pinnacle and ALPAhave been in contract negotiationssince February 2005. The National Mediation Board (NBM) began mediating their talks in September 2006, after which ALPA sued the airline in October 2007 over claims that Pinnacle violated the Railway Labour Act. Then the carrier sued the union in January 2008, alleging bad-faith bargaining. A Pinnacle spokesman says both lawsuits are still pending.

The proposed deal included one-time signing bonuses totalling roughly $10 million, Pinnacle vice president and CFO Peter Hunt revealed during an August investors call.He explainedPinnacle's current average wage is as much as 6% below the industry average.

While Pinnacle executives declined to discuss contract specifics, carrier CEO Philip Trenary said last month that first officers would receive a 20% raise under the proposed deal, noting starting pay for that position is in "the low 20s".

"We felt that the improvements in compensation, benefits and work rules agreed upon by the airline and the pilot negotiating committee are industry competitive, so we are very disappointed that the tentative agreement was not approved by the pilots," says Pinnacle president and general manager Clive Seal says in a statement.

ALPA represents some 1,250 Pinnacle pilots.

The union was not immediately available for comment.

Source: Air Transport Intelligence news