American seeks to cancel 9 union contracts

March 28, 2012 at 3:43 PM
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NEW YORK, March 28 (UPI) -- U.S. carrier American Airlines has asked permission to tear up nine contracts with various unions, a motion filed in a New York bankruptcy court says.

"First, American Airlines will not survive if it does not restructure. Second, while American has been staggering with billions in losses and a crushing debt load, its longtime competitors have reorganized in Chapter 11 and have thrived: Delta, United, and US Airways were all profitable in 2011," the filing says.

"Third, although American's financial peril has multiple sources, the greatest single challenge is its labor agreements," the document says.

The Fort Worth (Texas) Star-Telegram said the motion puts in jeopardy nine contracts that took years to negotiate.

In addition, the filing comes on the heels of the airline asking workers to accept $1.25 billion in cost cuts.

If granted, the motion would negate the carrier's contracts with its pilots, ground crews and flight crews, among others, the newspaper said.

Allied Pilots Association President David Bates said in a letter to pilots the company remains "convinced that a consensual agreement is in the best interest of all our airline's stakeholders."

However, Bates said, "it's becoming apparent that management does not share this view."

The airline had already submitted a restructuring plan that would have terminated 13,000 jobs and revisited the airline's commitment to the workers' pension benefits.

Both the unions and Chief Executive Officer Tom Horton have said the motion filed in court does not end contract negotiations.

l "The best outcome for the company is consensually negotiated new contracts," Horton said in a letter to employees.

"This will remain the ultimate objective of all parties as we proceed, and we will continue to work with our union negotiating committees to reach agreement."

Transport Workers Union International President Jim Little said the motion "does not change the fact that our negotiators are still at the table in Dallas trying to work out an agreement with AMR."

"If we are unable to reach an agreement, we are fully prepared to vigorously represent our members in court and explore all options," Little said.

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