Hearings got underway Monday in a US bankruptcy court in New York to determine whether American Airlines (AA) will be able to terminate its labor contracts as part of the Chapter 11 restructuring process.
AA has told the court that its "greatest single challenge" to successfully emerging from bankruptcy is labor agreements that are unfavorable compared with those of its competitors. The hearings are expected to last throughout the week as AA management makes its case; a decision is not expected from the court until June.
AA is arguing that it has offered reasonable terms to its workers, insisting that slashing about 13,000 jobs and adopting new work rules are the only way to save the remaining 65,000-plus jobs at the company and enable the carrier to profitably compete against rivals.
AA’s three largest unions, however, are arguing that workers are not responsible for the airline’s poor finances, which union leaders say have primarily resulted from AA management mistakes. In an uncommon step, the unions last week struck a deal with US Airways (US) to support an AA-US merger, even negotiating the parameters of labor terms should the combination happen.
AA said in a statement that “prolonged delay and distractions are not only counterproductive, but risk jobs and livelihoods of thousands of employees.” It argued that Chapter 11 “is the tried and proven, court-supervised process that is specifically designed to guide fair and equitable changes to the collective bargaining agreements that are necessary for a successful reorganization.”
The court process also does not preclude a negotiated settlement, AA noted, saying it is “ready to meet at any time to consider proposals from the unions that achieve the necessary labor savings and help American successfully emerge from Chapter 11 stronger and more competitive.”
Article Source : ATW Daily News
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