American Is Expected To Update, Re-File The Motion

United States Bankruptcy Judge Sean Lane issued a ruling late Wednesday denying AMR management’s motion to reject its collective bargaining agreements with the Allied Pilots Association and other labor unions. In his ruling, Judge Lane cited management’s stated intention of furloughing 450 pilots and the sweeping scope changes they proposed as areas where they did not make a sufficiently compelling case.

Reuters reports that AMR plans to make changes in the motion and re-submit it to the court by Friday. The airline said in prepared statement that it would ask Judge Lane to "consider our request expeditiously."

The union rank-and-file last week rejected the latest contract offer from American, which cost Capt. David Bates his leadership role with APA. In a letter to the union membership posted on the APA website, new union president Capt. Keith Wilson said "Your APA leadership is committed to securing a consensual, industry-standard contract that respects your sacrifices and recognizes your true worth as professionals. If AMR management one day secures the ability to impose arbitrary terms and conditions, they too will have to live with the consequences of their actions. One of those consequences will be to reinforce for all the fact that AMR’s bankruptcy isn’t just financial. Instead, what we’re seeing is a management devoid of constructive solutions to our airline’s problems, which should alarm everyone with a stake in the outcome of American Airlines’ restructuring.

Had Judge Lane ruled in favor of AMR, it would not have necessarily stopped the labor negotiations. And he did say that AMR was under no obligation to consider a merger with US Airways, which the union supports. But the bottom line is that, in Lane's opinion, the term sheet prepared by AMR would have given the airline "unfettered discretion" in furloughing its pilots to improve the bottom line.

FMI: www.alliedpilots.org, www.aa.com/i18n/amrcorp/corporateInformation/facts/amr.jsp