UPDATE 1-American Airlines pilots fire back at company in labor dispute

Tue Feb 28, 2012 11:16pm EST

* Pilots union: AMR does not intend to reach consensual deal

* AMR plans to cut labor costs by $1.25 billion

* Pilots union files lawsuit to clarify legal gray area

By Kyle Peterson

Feb 28 (Reuters) - A standoff between American Airlines and its pilots union grew increasingly tense on Tuesday, with the union saying the bankrupt carrier has little interest in a consensual deal as it strives to cut labour costs by $1.25 billion.

AMR Corp, the parent of American Airlines, said last week it needs concessions in a matter of weeks and did not have the "luxury of time" if it was to emerge from Chapter 11 in the near term.

"To say that I am disappointed would be an understatement. Management can choose how they handle bankruptcy restructuring," Allied Pilots Association President Dave Bates said in a letter to members.

The union, which represents some 10,000 pilots, also filed a lawsuit with a bankruptcy court asking it to clarify how two different pieces of law -- the Railway Labor Act and part of the Bankruptcy Code interrelate, saying that the Railway Labor Act offered a better path to a consensual agreement.

The Railway Labor Act would give the union more time, allowing for a 30-day "cooling-off" period if a national mediation board declared an impasse in negotiations.

The union said it was worried that the White House, to prevent disruptions to interstate commerce, could appoint a Presidential Emergency Board before the end of the "cooling-off" period, which would then issue a settlement recommendation.

Bates also said some AMR pilots plan to resign and fly instead for Chinese carriers.

AMR filed for Chapter 11 protection on Nov. 29, citing uncompetitive labor costs after years of fruitless talks with its unions. It said on Friday it hopes to reach a consensual deal, rather than have terms imposed on workers by the court, adding that talks would resume this week.

The carrier says it must cut 13,000 jobs as part of a plan to trim costs by $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.

United and Delta, however, emerged stronger from bankruptcy and later found merger partners. Those airlines are profitable while AMR posted a net loss of $1.1 billion for the fourth quarter.

American has said it lost $10 billion over the past decade, a period marked mainly by industry downturns triggered by the 2001 hijack attacks, recession, and skyrocketing fuel prices.