AMR sues retired workers over health benefits

Associated Press Modified: July 6, 2012 at 7:00 pm •  Published: July 6, 2012

DALLAS (AP) — American Airlines and its parent company are suing to stop providing health care and life insurance benefits to current retirees.

AMR Corp. and American filed the lawsuit Friday as part of their bankruptcy case in federal court in New York.

The airline wants the bankruptcy judge to rule that it can end the benefits as a way to cut costs in "sound business judgment." American says it never promised benefits to last the retirees' entire lives, and it reserved the right to change the benefits plan.

The company has about 40,000 retirees.

"The restructuring process is difficult for everyone affected, and we understand any changes to these benefits are concerning to our retirees," said Bruce Hicks, an AMR spokesman.

Hicks said the changes were "very similar" to those the company has proposed for active employees when they retire.

The company had already proposed ending paid retiree medical benefits for current employees after they retire. AMR said on a company website that it would "provide access to retiree medical coverage" for future retirees who pay for the insurance themselves.