Bloomberg News

American Airlines Pilots Oppose Company Request to Void Contract

May 12, 2012

The union representing pilots of AMR Corp. (AAMRQ:US)’s American Airlines objected to the carrier’s request to throw out a collective bargaining agreement as part of its reorganization.

The Allied Pilots Association, which represents about 10,000 American Airlines pilots, said in a filing yesterday in U.S. Bankruptcy Court in Manhattan that AMR’s restructuring plan “seeks unprecedented, unnecessary profit margins on the backs of labor.”

“The issue in this case is not whether American needs some contract modifications and some reductions in labor costs to be more competitive and emerge from bankruptcy,” the union said. “The real issue before this court is the particular set of contract modifications demanded by the company.”

The union said the $370 million in annual concessions that American seeks from its pilots to restructure is more than seven times the $50 million the airline said it needed in concessions before it filed for court protection.

American, which filed for bankruptcy in November, is seeking $1.25 billion in annual labor savings as part of its restructuring. It seeks court permission to void labor contracts with unions for pilots, flight attendants and the Transport Workers Union, which includes mechanics and baggage handlers.

Bruce Hicks, a spokesman for Fort Worth, Texas-based AMR, said in a telephone interview that the airline seeks to reach consensual agreements with all its unions. The pilots’ arguments will be discussed at a hearing May 14 in bankruptcy court, Hicks said.

The case is In re AMR Corp., 11-15463, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Edvard Pettersson in Los Angeles at epettersson@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.


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