Reuters: Bankruptcy News: UPDATE 2-Judge delays ruling on union contracts at American Airlines

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UPDATE 2-Judge delays ruling on union contracts at American Airlines Jun 22nd 2012, 02:06 Thu Jun 21, 2012 10:06pm EDT * Pilots seek, win extension to further weigh offer * Bankruptcy court gives sides a week to negotiate * Unions could face forced labor terms without deals By Nick Brown and Soyoung Kim June 21 (Reuters) - A judge on Thursday postponed a ruling on whether to throw out contracts covering thousands of unionized workers at bankrupt American Airlines, giving labor and management an extra week try and reach deals to save the company money. Judge Sean Lane of the New York bankruptcy court was set to rule on Friday on the airline's motion to abrogate terms covering pilots, flight attendants, and certain ground workers at the No. 3 carrier. But American said Lane postponed his decision until June 29, averting for now the possibility of management imposing work rules and other terms until long-term deals could be cut. American sought bankruptcy in November, partly blaming high union labor costs for losing its competitive edge versus rivals who restructured in court several years ago and then strengthened themselves further through mergers. American is seeking $1.25 billion in labor savings, mainly from unionized workers, who are pressuring the company to merge with US Airways as the most viable restructuring option. AMR Corp, American's parent, has said it would consider consolidation but is focusing first on emerging as a stand alone entity later this year. In any airline restructuring, the response of pilots can be crucial in convincing other workers that management's proposals are viable. Leadership of the pilots' union at American, the Allied Pilots Association, said on Wednesday it could not send management's last offer to its members for a vote, citing a lack of specifics "in various areas" and the need for more time to analyze contract provisions and related language. Management called it a "good competitive proposal." A document laying out key provisions showed a nearly 15 percent pay increase over five years, no furloughs, and a 17 percent reduction in overall costs. A key sticking point for pilots has been scheduling. American spokesman Bruce Hicks said the extension would not change the company's final offer to its pilots, but would give the union's board more time to "understand our proposal and make a decision" that is in the "best interests" of those workers. Regarding stalled negotiations with other unionized employees, Hicks said the airline was willing to sit down with flight attendants and ground workers to "resume good faith" talks at any time. "It's vital we close this chapter and move toward agreements that support a new American Airlines," Hicks said. Flight attendants stopped negotiating earlier this month and said they would take their chances with Lane. The union representing ground workers has been split. Five of its seven work groups voted last month to accept a deal, while two voted it down and remain in talks. The case is In re AMR Corp et al, U.S. Bankruptcy Court, Southern District of New York, No. 11-15463. Link this Share this Digg this Email Reprints

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