American Airlines pilots ask bankruptcy judge to keep contracts intact

American Airlines' pilots union pressed its case Monday before the U.S. Bankruptcy Court, asking the judge not to abrogate its contract with the carrier and laying out its offers to cut costs that American had rebuffed leading up to the court hearing.
By Maria Recio Published: May 15, 2012
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American Airlines' pilots union pressed its case Monday before the U.S. Bankruptcy Court, asking the judge not to abrogate its contract with the carrier and laying out its offers to cut costs that American had rebuffed leading up to the court hearing.

At issue is the future of Fort Worth, Texas-based American Airlines: Will it prevail with a business plan that leaves it a stand-alone carrier, or will it merge with US Airways, as its unions want it to do?

American announced Friday that it would consider the merger, but the court proceeding continued Monday under the so-called 1113 process. The process, created by the Railway Labor Act, applies to airlines as well and is meant to keep management and labor negotiating. American has the exclusive right to file a reorganization plan under court rules through the end of September.

The union contracts are central to the issue of American's viability. The carrier, which lost $1 billion last year, says its highest-in-the-industry labor costs must be cut.

The Allied Pilots Association argued that it had offered substantial savings as recently as February to management, which did not respond — setting up the 1113 hearing giving the judge the power to abrogate the contracts.

American management made its case before the court two weeks ago for Judge Sean Lane to terminate contracts with pilots, flight attendants and transport workers. He will rule by June 6.

The Transport Workers Union will tell the judge Tuesday morning the results of a membership vote on a contract offer from American.

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