AMR Corp. petitioned the U.S. Bankruptcy Court for the Southern District of New York last week to void its labor contracts with the Allied Pilots Association (APA), the Transport Workers Union of America (TWU) and the Association of Professional Flight Attendants (APFA), laying the groundwork for an effort to cut labor costs among unionized employees at American Airlines by $990 million a year. All told, AMR seeks $1.5 billion in annual employee-related cost savings.
As expected, the motion drew an immediate reaction from all three of the unions.
“While it comes as no surprise, management’s action reaffirms their desire to abrogate sixty years of collective bargaining history,” said APA president Dave Bates. “Although we remain convinced that a consensual agreement is in the best interests of all of our airline’s stakeholders, it’s becoming apparent that management does not share this view.”
The APA plans to file a response to management’s 1113(c) motion on April 10. Schedules then call for management to respond by April 13 and for a five-day court hearing to start on April 17. In the meantime, the APA expects bargaining to continue.
“Nobody’s kidding themselves—least of all me—about the difficulty of our current predicament,” added Bates. “Chapter 11 restructuring is not and likely never will be a labor-friendly process. That’s no secret. Nevertheless, we’re absolutely committed to identifying the best available alternatives to secure a contract that is at the very least comparable to what our network-carrier peers obtained in restructuring.”
For its part, the APFA promised “to lead the way in fighting American’s overreaching in court” after offering a so-called “early out” proposal to American Airlines CEO Tom Horton.
“[We] have suspected for months that AMR would go this way,” said APFA president Laura Glading. “Horton’s outright refusal to consider our early-out proposal, which would have saved money and mitigated layoffs, was a strong indication of his plan…Horton even admitted to ignoring the voices of his employees last week.
“The company can succeed only if it convinces the judge that the contract changes it seeks are necessary, fair and equitable,” continued Glading. “In reality, its draconian demands are none of those things.”
Finally, in a curt statement, TWU International president James Little reminded his constituents that negotiations continue in Dallas, notwithstanding the 1113 motion. “If we are unable to reach an agreement, we are fully prepared to vigorously represent our members in court and explore all options,” said Little.
