American Airlines renews push to void pilot contracts

Fri Aug 17, 2012 6:21pm EDT
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By Jonathan Stempel

(Reuters) - The parent of American Airlines on Friday renewed its push to void its collective bargaining agreement with its pilots' union, two days after a federal bankruptcy judge rejected an earlier effort.

U.S. Bankruptcy Judge Sean Lane in Manhattan, who oversees the Chapter 11 proceedings of American Airlines' parent AMR Corp (AAMRQ.PK: Quote), had objected to what he called the carrier's proposed "unfettered discretion" under its earlier proposal to temporarily lay off pilots and engage in code-sharing.

AMR said its revised plan addresses these concerns by retaining current contractual limits on furloughs and setting restrictions on the ability of the third-largest U.S. airline to enter code-sharing relationships.

"We believe both of those changes properly address the court's concern," and will help AMR "keep moving forward to achieve the savings and flexibility needed for our successful restructuring," AMR spokesman Bruce Hicks said in a statement.

Tom Hoban, a union spokesman, said he hopes AMR will return to the bargaining table before Lane has a chance to rule.

"The company is a little tone-deaf in taking into account the 8,000 pilots' state of mind," he said in an interview. "It is embarking on a scorched-earth policy, when the goal should be a consensual agreement that recognizes the sacrifices the pilots have made and reflects the competitive landscape. To rush this process doesn't behoove either party."

A hearing on the revised plan is scheduled for September 4.

Lane's decision on Wednesday was unexpected and set back Fort Worth, Texas-based AMR in its effort to save more than $1 billion a year in labor costs, including $315 million from the pilots union.   Continued...

American Airlines aircraft stand on the tarmac at Los Angeles International Airport in Los Angeles April 20, 2012. REUTERS/Lucas Jackson