Market Commentary and Intraday News
American Eagle seeks to break 3 union contracts
254 days ago
(AP:DALLAS) American Eagle, the regional-flying sister of American Airlines, is seeking to throw out labor contracts with mechanics and other ground workers.
Flight attendants overwhelmingly approved a new contract.
The company asked a federal bankruptcy judge on Friday to let it cancel contracts covering mechanics, dispatchers and ground school instructors.
Company spokesman Bruce Hicks said the move was necessary if Eagle is to compete for American's regional flying. Parent company AMR Corp. wants to sell or spin off Eagle and outsource American's short-haul service, although the plan was put on hold after AMR filed for bankruptcy protection in November.
Hicks said Eagle would continue negotiating for voluntary agreements with the Transport Workers Union, which represents Eagle's ground workers.
Eagle and American are seeking concessions from employees to reduce labor costs. Bankruptcy law lets companies throw out contracts if they show it's necessary for a successful turnaround.
Meanwhile, the Association of Flight Attendants-CWA said Friday that 87 percent of the 1,700 attendants approved a new contract.
The union said that Eagle made "substantial improvements" over the company's original demand for concessions. The union said it won wage increases and preserved work rules.
"No one wanted to vote for this agreement, but our members recognized that doing so was in our best long-term interest," said Robert Barrow, president of the union's Eagle group. He said the union got "the best possible agreement in the worst of circumstances."
AMR has negotiated cost-reducing contracts with American Airlines flight attendants and ground workers and Eagle bag handlers. This week, a federal bankruptcy judge approved the company's request to let it throw out its contract with American Airlines pilots, who voted against the company's last offer. Eagle is still working on deals with pilots and other groups.
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