* Decision on contract rests with bankruptcy judge
* American seeking $1.25 bln in labor cost cuts
NEW YORK, June 20 Pilot union leaders at
American Airlines have rejected the carrier's final contract
offer, leaving it to a judge to decide whether to grant the
company's request to vacate the labor group's collective
bargaining agreement in bankruptcy court.
The Allied Pilots Association said on Wednesday that its
board of directors voted 11 to 5 against approving management's
"final offer" for a tentative deal and sending it on to the
membership for a vote.
American filed for bankruptcy in November and is seeking
$1.25 billion in annual labor cost savings to compete more
effectively with rivals with lower labor costs. Most of the
savings will come from unionized workers.
The two sides have been close in the past to an agreement.
Key issues are wages, benefits, when pilots work and what planes
The pilots' board cited a lack of specifics "in various
areas" and the need for more time to analyze contract provisions
and related language, the union said in a statement.
New York bankruptcy Judge Sean Lane is expected to rule
Friday on American's motion to abandon the current pilot
contract and impose tentative terms.
Flight attendants have also spurned management's last offer
and will have their case decided by the court as well. Unionized
ground workers have yet to decide whether to accept a final
Other big airlines have won permission to void contracts in
bankruptcy, only to reach voluntary agreements with unions in
American said in a statement it was "very disappointed" with
the pilots' decision.
"Both parties worked hard to reach a compromise on what are
very intricate and complex issues, resulting in a proposal that
provides significant benefits for pilots," said Bruce Hicks, an
The proposal, he said, included pay increases, furlough
protection, an equity stake in the restructured company, and a
proposal to freeze the union's pension plan, rather than
terminate it to save money.
Pilots and other unions at American are pushing the airline
to merge with US Airways, saying a tie-up would sharply
reduce the cost-savings needed from pilots and other labor
American is focused on emerging later this year as a
standalone carrier but has said it would consider all options,