News / Business
American Airline Pilots Appeal Bankruptcy Judge’s Ruling on Labor Contracts
In a rare move, the pilot’s union filed an appeal, seeking to overturn the bankruptcy judge’s decision to deny American Airlines overhaul of their labor contract. Pilots wanted to come to a consensual agreement.
The Allied Pilots Association, representing the airlines 10,000 pilots, wants to overturn the judge’s August 15th ruling which they initially called a “rare Chapter 11 victory for labor.” But now they want to appeal the ruling after Judge Lane said that AMR would have to adjust labor contracts in order to emerge from bankruptcy.
Judge Lane pointed out two flaws in the labor proposal the company’s bankruptcy attorneys submitted and plans to rule on the new proposal in a trial next Tuesday.
APA spokesman Greg Overman said, “One of the items we will be addressing is the company’s substantially improved financial performance calling into question whether they genuinely need the concessions.”
“We think a consensual agreement between the pilots and management is essential. We think it is in the best interest of all stakeholders,” Overman said.
The airline has reached labor concessions with other non-pilot unions. American initially sought to reduce labor costs by 17 percent, but later asserted that those costs needed to be reduced by 20 percent.
Employees and creditors must make concessions whenever a business seeks a structured reorganization.Some legislators have introduced legislation meant to put labor ahead of other creditors under Chapter 11.
