* 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 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
"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
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
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.