Market Commentary and Intraday News

Judge bars American from dropping pilots' contract

278 days ago

By DAVID KOENIG
AP Airlines Writer

(AP:DALLAS) A federal bankruptcy judge is blocking American Airlines from temporarily setting pay and contract rules for its pilots, but American plans to try again.

The judge ruled Wednesday that American could not reject a contract it negotiated in 2003 and impose its own terms on pilots. American wanted to cancel the contract to cut costs as it rebuilds in bankruptcy protection.

Judge Sean Lane ruled in New York that American failed to prove it needed furloughs and more outsourcing of flying, two key parts of its restructuring plan.

American Airlines spokesman Bruce Hicks said the company would "adjust" those provisions, make another offer to the pilots' union and by Friday file a new bid to cancel the union's contract.

Union lawyers withheld comment while they studied the 106-page decision. Allied Pilots Association spokesman Gregg Overman said the fact that American asked the court to cancel the pilots' contract was "an admission of failure" to reach a deal with a key employee group and even to avoid bankruptcy in the first place.

The judge delayed a ruling on the fate of a contract with flight attendants, who are voting through Sunday on American's last offer to their union. Mechanics and other ground workers voted to accept offers from American, the nation's third-largest airline.

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