AA unions rally outside bankruptcy court

April 23, 2012 at 2:40 PM
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NEW YORK, April 23 (UPI) -- Union workers rallying outside a bankruptcy courthouse in New York said American Airlines was using them as a scapegoat for its financial troubles.

About 300 union workers gathered for a show of strength on the opening day of arguments that could end with the court's permission for the airline to tear up the union contracts, the Forth Worth (Texas) Star-Telegram reported Monday.

"AA got bailed out, we got sold out," union workers chanted.

"It's the blame game. They want to blame labor," Transportation Workers Union International President Jim Little said.

The hearing is expected to last more than a week with experts going through the airline's financial details to show its labor costs are out of line.

After that, the unions will have their turn to convince the judge their labor costs are justified.

But even the Allied Pilots Association concedes the union's argument is just about a lost cause.

In the past 33 bankruptcy cases that involved asking permission to cancel union contracts, management has prevailed every time, the APA said.

The reason is partly that judges tend to maintain focus on one specific goal, which is to keep the company from going under.

"I think the momentum of the situation inherently favors the debtor because most judges will err on the side of preserving the company. If they were really wrong, then the union can make it up in the next round of bargaining," said Mark Ellenberg, an attorney with Cadwalader, Wickersham & Taft who has worked on airline bankruptcy cases.

"It gets deeply into the economics of the airline and the collective bargaining agreements and what is truly necessary," he said.

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