business

The Air Line Pilots Association (ALPA) has sued Champion Air in U.S. District Court in Minneapolis, claiming that the company violated federal labor law by unilaterally creating incentive and retention payments.

The Bloomington-based charter carrier, which transports professional sports teams and leisure travelers, initiated the payment plan on Dec. 10. Pilots who remain with Champion until late in 2008 would each receive $10,000. In addition, pilots who fly extra hours would be paid overtime at 1½ times their normal pay rate.

Champion and the pilots union have been negotiating since January 2005 but have been unable to reach a multiyear agreement.

Matt Marsh, chairman of the Champion pilots union, said Monday that the union filed the lawsuit Friday because the airline has tried to "circumvent" the union by merely notifying pilots of the new payments after failing to negotiate a deal.

"The union is very concerned over the company's unwillingness to negotiate permanent improvements to our contract," Marsh said. "The pilots of Champion Air are not interested in accepting bribes to alleviate the company's 'crisis of the month.'"

Under the current contract, a Champion pilot who flies 65 hours a month earns $25,000 to $78,000 a year, Marsh said. Since January, about 40 percent of Champion's pilots have resigned, he said. New hires have not replaced all of them, so the overtime pay established by the company is designed as an incentive for pilots to fly more hours.

Champion is facing an uncertain future. In an October letter to federal mediators, Champion CEO Lee Steele said that the carrier expects to lose two major customers during 2008 and needs to find new investors and replace its aging Boeing 727 fleet.

He said that MLT Vacations plans to phase out its flying with Champion and that the National Basketball Association does not intend to renew its contract with Champion.

Jon Austin, a Champion spokesman, declined Monday to comment on the pilots' lawsuit. Earlier this month he said the company was looking to replenish its client roster and to fuel growth opportunities.

Liz Fedor • 612-673-7709