Judge delays ruling on American Airlines contracts
Getty Images/Kevork Djansezian
(AP) DALLAS - American Airlines says a federal bankruptcy judge has delayed a ruling scheduled for Friday on whether it can break its contracts with unions and impose cost-cutting steps including layoffs.
Federal Judge Sean Lane in New York postponed a decision until June 29.
The one-week delay gives the company and unions more time to negotiate voluntary cost-cutting agreements that the unions have so far resisted.
The Allied Pilots Association had requested more time after its board voted 11-to-5 late Wednesday to reject American's latest offer. The company said it proposed pay raises, profit-sharing and stock in the airline after it emerges from bankruptcy protection.
Bruce Hicks, a spokesman for American parent AMR Corp., said the company would not sweeten the proposal that was rejected by the pilots' union board but will give the union "more time to better understand our proposal and make a decision that is in the best interests of our pilots."
Negotiations had previously broken down with unions for flight attendants and mechanics. Hicks said American was willing to reopen talks with those groups.
AMR filed for bankruptcy protection in November. It says it must cut labor costs by $1.25 billion per year to succeed, and it proposed to eliminate nearly 12,000 union jobs at American and impose other cuts on workers.
Hovering in the background is US Airways Group Inc. (LCC), which is preparing a takeover bid for AMR. US Airways has won the support of American's three unions by promising fewer layoffs and fewer concessions than American is demanding.
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