AP News

Union says American doesn't need deepest cost cuts

FORT WORTH, Texas (AP) — Union officials say American Airlines should give pilots the terms of a rejected final contract offer even if the company wins the right to make deeper cost-cutting changes.

They say that anything less generous than the offer that the pilots rejected would be punitive because the airline is already starting to make money.

"Are they going to drive us down just because they have the right to?" union secretary-treasurer Scott Shankland said Thursday.

The Allied Pilots Association and the airline will be in federal bankruptcy court in New York on Tuesday for a hearing to decide whether American can impose deep cost-cutting measures.

Union flight attendants and ground workers have approved concessionary contracts. But pilots voted this month to reject American's last offer of pay raises and a 13.5 percent stake in the company after it emerges from bankruptcy protection.

After the vote, American parent AMR Corp. asked the judge to throw out the pilots' current contract and impose tougher terms. The judge said American showed that it needed major changes in the contract to be successful, but he denied the request on narrow grounds. AMR tweaked its proposal ahead of Tuesday's hearing.

Shankland and the union's acting president, Keith Wilson, said that American doesn't need to impose severe concessions on pilots because it is financially stronger than it was when it demanded big sacrifices from union employees this spring.

AMR said this week that it earned $135 million in July, its second straight profitable month. And it would have earned $95 million in the April-to-June quarter if not for bankruptcy-related costs.

The pilots' union has vowed to hold a strike-authorization vote if American imposes severe concessions. Wilson repeated earlier promises that there would be no strike unless it is permitted by federal labor-relations officials. He said pilots want a negotiated settlement with AMR that raises their pay and makes it comparable to salaries at United and Delta.

"We maintain that the changes outlined in our term sheet are necessary for our successful restructuring, and will help us reach our goal toward emerging as a stronger company," American Airlines spokesman Brice Hicks said in a statement. "If the Court approves the rejection of the contract, we will begin to implement the terms from the term sheet that will enable us to achieve our necessary cost savings and continue moving forward toward a successful restructuring."

AMR filed for bankruptcy protection in November after losing more than $10 billion since 2001.

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