AMR, American Airlines’ parent company, succeeded in its second effort to void its contract with the Allied Pilots Association Tuesday afternoon, when, in a ruling in U.S. bankruptcy court in New York, Judge Sean Lane rejected the union’s contention that American Airlines’ financial condition had improved enough since its Chapter 11 filing last November to avoid the measure.
Orders for hundreds of Boeing and Airbus narrowbodies stand subject to revision following AMR Corporation’s Chapter 11 filing last week. However, both manufacturers remained sanguine about the extent to which the reorganization of the company and its American Airlines subsidiary might affect their respective contracts.
AMR Corporation and its two U.S. airline subsidiaries, American Airlines and American Eagle, filed for Chapter 11 bankruptcy today after failing to agree to cost-cutting measures with its pilots.
American Eagle president and CEO Peter Bowler has given AMR notice of his retirement after a 26-year career with American Airlines and its regional subsidiary.
AMR has begun planning the divestiture of its American Eagle regional subsidiary amid calls for asset sales by shareholders disenchanted with the company’s recent stock market performance. Although AMR doesn’t attribute the decision directly to pressure from investors, the November 28 announcement immediately preceded a 6.9-percent jump in share price.
A federal arbitrator’s ruling to award the Allied Pilots Association $23.2 million for American Airlines’ scope-clause violations appears to have achieved its desired effect.
Under the current ATC funding mechanism, business aviation “gets a free ride, or almost free ride,” according to American Airlines chairman and CEO Gerard Arpey. Speaking last week at an Executives’ Club of Chicago luncheon, Arpey said airlines “use two-thirds of the ATC system’s services but pay more than 90 percent of the cost.