DALLAS (AP) — American Airlines is going back to court to throw out its contract with union pilots after making changes to satisfy the bankruptcy judge.
If it wins in court, American could cut annual spending on pilots by more than $300 million and do more revenue-sharing deals with other airlines.
American parent AMR Corp. filed a motion in U.S. bankruptcy court in New York on Friday, two days after a judge denied American's first attempt to cancel the pilots' contract. The judge rejected the company's demand for unlimited power to furlough pilots and make so-called code-sharing deals.
AMR now proposes to limit possible furloughs to about 1,750 or less than one-fourth of its pilots, a ceiling set in the pilots' current contract. It seeks to greatly expand code-sharing but not on all routes. Pilots view code-sharing as potential outsourcing of their jobs.
A hearing on AMR's new proposal is scheduled for Sept. 4.
Meanwhile flight attendants are scheduled to complete voting Sunday on their last contract offer from American. If they reject the offer, American will ask the court to throw out that contract too.
Under federal bankruptcy law, companies can nullify union contracts if they convince a judge that the move is necessary for a successful turnaround. American claims that its labor costs are higher than competitors, and it is seeking to impose cost-cutting measures that pilots rejected in a vote last week.
AMR spokesman Bruce Hicks said the company believed that Friday's motion addressed the judge's concerns and will allow it to continue moving through the bankruptcy-restructuring process. Continued...