U.S. airline asks judge to throw out pilot contract

FORT WORTH, Texas -- Lawyers for American Airlines filed new documents Friday asking a federal bankruptcy judge to review their revised term sheet and reconsider throwing out the company's existing labour contract with its pilots' union.

The court scheduled a hearing on the motion for Sept. 4.

The new and amended motion submitted to U.S. Bankruptcy Judge Sean Lane was revised specifically to address two points the judge raised in his Wednesday ruling that denied American's first request to abrogate the contract with the Allied Pilots Association.

In his ruling, Lane said "American has established that significant changes are necessary to the APA's collective bargaining agreement for reorganization" and "labour costs for pilots are among the highest of its network competitors," adding to the airline's continuing losses.

But the judge said American needed to revise its proposals, contained in the Section 1113 proposal, that would have given the airline's management "unrestricted use of furlough and code-sharing where such unfettered discretion has not been justified as necessary."

American Airlines spokesman Bruce Hicks said the new motion specifically addresses those two issues.

"On code-sharing, we revised our proposal to include what the APA leadership had agreed to in the tentative agreement," Hicks said, referring to a proposed contract voted down overwhelmingly by American pilots last week.

"For pilot furloughs, we will keep the current contract limits," Hicks said. "We believe both of those changes properly address the court's concern and will allow the 1113 to move forward quickly."

American Airlines officials have said the revised proposal would allow significant code-sharing with Alaska Airlines, with Hawaiian Airlines on inter-island flights, and with some other airlines on domestic flights.

Code-sharing is viewed by the unions as a way for the airline to boost revenue-generating flights without providing any additional jobs for union members.

Meanwhile, American Airlines' flight attendants have until Sunday morning to cast their votes on the company's final contract proposal to the Association of Professional Flight Attendants.

In recent days, the union leadership has strongly warned its members they will be significantly better off under the terms of the tentative agreement than if they reject the contract and American imposes its term sheet.

The company's proposed six-year contract provides for a $1,500 signing bonus, an initial three per cent pay raise and a 5.5 per cent matching 401(k) contribution. The APFA would also receive a 3 per cent equity stake in the reorganized company, which could be monetized and distributed to union members.

The unsecured creditors committee has endorsed contract agreements reached with ground workers, the one being voted on by the flight attendants and the one rejected by the pilots.

The committee released a statement Thursday saying it "agreed to reluctantly support the equity stakes negotiated by" the unions.

-- Fort Worth Star-Telegram

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