American Says Union Talk Time Running Out

March 4, 2012

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American Airlines said time is running out for its unions to reach negotiated deals on cost savings targets and hinted it could ask the bankruptcy court to impose contracts on its union workers in order to win the savings the airline says it needs to exit Chapter 11.

"Every day that passes without new agreements introduces more risk to our situation," American's parent company, AMR, said in a negotiations update.

"Time is running out for union leaders to be a collaborative part of the solution," the airline said.

Earlier this week the standoff between the bankrupt carrier and its pilots' union grew increasingly tense, with the union saying the airline had little interest in reaching consensual deals with workers.

The carrier has said, however, that it prefers consensual deals to having terms imposed on workers by the court, as often happens in bankruptcy proceedings if the sides reach an impasse.

AMR repeated that position on Friday, saying company negotiators were prepared to meet at any time and that it would continue to be responsive to all union requests related to term sheets, savings targets, proposal valuations and the business plan.

But at least one union remained doubtful.

"It takes two to tango. We're not seeing a willingness to negotiate on management's side of the table," said Gregg Overman, spokesman for the Allied Pilots Association.

Representatives for the Association of Professional Flight Attendants and the Transport Workers Union, which represents several groups of ground workers, were not available to comment.

Last week, the airline said it needed concessions from its labour groups in a matter of weeks, not months, in order to emerge from Chapter 11 in the near term.

AMR filed for Chapter 11 protection on November 29, citing uncompetitive labour costs after years of fruitless talks with its unions.

The carrier says it must cut 13,000 jobs as part of a plan to trim costs by USD$2 billion. American has almost 74,000 full and part-time employees and its regional carrier American Eagle has about 14,000 full- and part-time employees.

The carrier said it expects to trim about 4,600 mechanics and related jobs, about 4,200 fleet service workers, about 2,300 flight attendants, about 1,400 management and support staff and about 400 pilots.

Unlike its rivals United Airlines and Delta Air Lines, AMR did not restructure in bankruptcy in the last 10 years, instead winning voluntary concessions from workers.

Those carriers are now profitable, while AMR is not.