A judge today denied a request by American Airlines to terminate an existing contract with the Allied Pilots Association and impose tough new terms, ruling that two portions of its request are too aggressive.
However, the 111-page ruling by U.S. Bankruptcy Judge Sean Lane may only be a temporary roadblock to American's effort to implement a Chapter 11 reorganization plan.Lane ruled that American showed to his satisfaction that it needs relief from the compensation and work rules of all its existing labor agreements, but that its proposals regarding authority to furlough pilots and change code share agreements went too far.Lane said American could alter its Section 1113 request to address those concerns and resubmit a motion to the court for review by the end of this weekAmerican spokesman Bruce Hicks said the airline would do that quickly."The judge supported American's business plan throughout his ruling and agreed with the company's position that changes to the collective bargaining agreement were necessary," Hicks said.Keith Wilson, the new president of the pilots union, which recently rejected the company's last contract offer, called Lane's decision "a rare Chapter 11 victory for labor.""In voting down the tentative agreement, our membership asked the toughest question a labor union could ask in Chapter 11 restructuring: "What is behind that '1113 door'?" Wilson wrote in a note to members. "We now have a near-term answer -- a significant setback for management, another set of 1113 court hearings and another round of bargaining."American will review the ruling where the judge said its proposal was "too aggressive," Hicks said."We will adjust those elements, resubmit the term sheet to APA and, as the Court suggested, renew our 1113 motion for our pilots by Friday. We will ask Judge Lane to consider our request expeditiously."Bob Cox, 817-390-7723Twitter: @bobcoxict
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