Tags: amr | airline | bankrupt

American Airlines Seeks to Void Labor Contracts

Tuesday, 27 Mar 2012 03:28 PM

The parent of American Airlines will seek bankruptcy court approval to throw out labor contracts, a move that puts new pressure on pilots, flight attendants and other unionized workers to quickly agree to concessions.

Chief Executive Tom Horton said in a letter to employees that the "best outcome" remains negotiated settlements, and promised to continue working with unions toward that end.

All contracts will remain in effect while the New York bankruptcy court considers the company's request.

"With losses mounting and oil prices rising, there is growing urgency to move more quickly. The bankruptcy law provides a process for the court to address such a situation as has been done in virtually all prior successful airline restructurings," Horton said.

AMR also sought permission to seal from the public all or part of its forthcoming motion to terminate contracts.

"The confidential material contains sensitive and confidential information that should not be publicly disclosed, and the disclosure of which could harm," the company said in its filing.

American wants to slash overall costs by $2 billion annually. More than half of the savings would come from labor, including a plan to shed 13,000 jobs.

American has negotiated for years with most of its labor groups on new contracts since unions agreed to hefty concessions to keep the airline out of bankruptcy in 2003. Since bankruptcy, those talks have taken on a more urgent tone and pace. But agreements remain elusive.

© 2017 Thomson/Reuters. All rights reserved.

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2012-28-27
 

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