Members of the Transport Workers Union have rejected a contract proposed by American Airlines, based in Dallas.

The union represents mechanics and ground employees at the airline. Both sides said Saturday that members turned down the contract late Friday, The Dallas Morning News reported.

American management said its comprehensive proposal was an effort to balance what its employees want and need with the company's financial future.

American Airlines, along with the entire airline industry, is facing unprecedented challenges. In addition, American's labor costs are the highest in the industry, the company said in a statement.

The contract included no pay increases, although employees would have received two lump sum payments.

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