American Airlines, F/As Fail To Agree Cost Cuts

June 3, 2012

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American Airlines failed to agree on cost-cutting measures with its flight attendants' union, setting the stage for a judge to rule on voiding the contract for the carrier, the union said in a statement.

The Fort Worth, Texas-based airline filed for Chapter 11 bankruptcy protection in November, citing a need to cut staff costs, while its flight attendant and pilot unions have pushed for a merger with rival carrier US Airways to reduce expenses.

Talks between American Airlines and the Association of Professional Flight Attendants ended without reaching a deal after two days of meetings, union spokeswoman Leslie Mayo said in the statement.

"Today, mediated talks between AA and APFA broke off in New York without a deal. APFA is disappointed, but not surprised," Mayo said.

The pilots union will meet the airline in another round of mediated sessions beginning on Monday, Mayo said.

A US bankruptcy judge can rule as early as June 22 on whether the airline can void the contracts with the unions, Mayo said.

An American Airlines spokesperson did not respond to a request for comment.

The airline has said it needs USD$1.25 billion in annual concessions.

The lead negotiator for AMR's pilot union last month testified that a merger between American and US Airways could save USD$130 million per year in cuts to the airline pilots' union.

"I firmly believe a merger is the right move for this company," APFA President Laura Glading said in the statement. "Our airline needs a network that can grow and compete with United and Delta. A strong company will provide more job security than even the best agreement American can offer as a standalone."