American Airlines failed to agree on cost-cutting measures with its flight attendants' union, setting the stage for a judge to rule on voiding the contract for the bankrupt carrier, a subsidiary of AMR Corp, the union said in a statement late on Friday.
The Fort Worth, Texas-based airline filed for Chapter 11 bankruptcy protection in November, citing a need to cut labor costs, while its flight attendant and pilot unions have pushed for a merger with rival carrier US Airways Corp to reduce expenses.
Talks between American Airlines and the Association of Professional Flight Attendants ended without reaching a deal after two days of meetings, union spokeswoman Leslie Mayo said in the statement.
"Today, mediated talks between AA and APFA broke off in New York without a deal. APFA is disappointed, but not surprised," Mayo said.
The pilots union will meet with the airline in another round of mediated sessions beginning on Monday, Mayo said.
A U.S. bankruptcy judge can rule as early as June 22 on whether the airline can void the contracts with the unions, Mayo said.
An American Airlines spokesperson did not respond to a request for comment on Saturday.
The airline has said it needs $1.25 billion in annual labor concessions.
The lead negotiator for AMR Corp's pilot union last month testified that a merger between American and US Airways could save $130 million per year in cuts to the airline pilots' union. "I firmly believe a merger is the right move for this company," APFA President Laura Glading said in Friday's statement. "Our airline needs a network that can grow and compete with United and Delta. A strong company will provide more job security than even the best agreement American can offer as a standalone."
(Reporting by Michael Hirtzer in Chicago; Editing by Sandra Maler)