American Airlines, the second-biggest US carrier, reached a tentative contract agreement with the union that represents 10,600 baggage handlers and other airport ground workers.

The organization is the third major employee group in the Transport Workers Union to reach an accord with the carrier this month. The accord, confirmed by American in an e-mail, must be voted on by union members before it takes effect. The two sides started talks in November 2007.

American has focused on negotiating productivity improvements and has offered 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 union has sought to regain pay and benefits given up in 2003 to save the airline from bankruptcy.

“Members will have to carefully look at the state of the economy, look at what they gave up in 2003 and think about what this contract delivers before voting in July,” Tim Gillespie, international representative for the TWU’s air transport division, said in a statement.

During meetings with federal mediators overseeing the talks, “it became clear” the union would not be freed from further negotiations unless its members were allowed to vote on the company’s proposal, Gillespie said. The National Mediation Board last month ordered the TWU and American to resume talks instead of agreeing with the union that the two sides were deadlocked. The board must declare talks at an impasse before the union can move toward a possible strike.

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. The union represents bag handlers and workers who clean and fuel planes and move freight. (Bloomberg)