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Pilot's Union Fined $45M

A federal judge has fined the American Airlines' pilots union more than $45 million -- nearly all of its assets -- for an illegal sickout that led to the cancellation of more than 6,700 flights earlier this year, stranding hundreds of thousands of passengers.

U.S. District Court Judge Joe Kendall had previously held the Allied Pilot's Association (APA) in contempt after it initially refused his back-to-work order.

Hearings were held this week to determine compensatory damages for the 10-day sickout, during which American Airlines claimed it lost $50 million. The union had disputed the claim, saying the sickout cost the air carrier less than $5 million.

Kendall sided with American fining the union $45.51 million. It's ruling could devastate the APA, which has about $48 million in the bank.

APA president Rich Lavoy said, "We're obviously disappointed by the judge's award. We think we're a long way from this being fully adjudicated. We're very disappointed the judge would come up with this number. If we're going to go forward, this is not the way to resolve the problems."

American Airlines said it took no "particular pleasure" in the verdict. "They're victims of this as are we," said airline spokeswoman Andrea Rader. "We went to court to get the sickout to stop. We want to close this chapter and get on with labor peace."

Kendall said the union and its top two officials, Lavoy and vice president Brian Mayhew, were liable for the fine. He scheduled a hearing Monday to discuss how the payments should be made.

The union had previously placed $10 million, or one-quarter of its assets, with the court in preparation for paying a fine. LaVoy placed $10,000 with the court and vice president Brian Mayhew remitted $5,000 for their roles in the job action.

The ruling makes "me sick to my stomach, because I know what's going to happen is some very fine men and women pilots are going to be hurt badly," Kendall said.

He criticized the APA, however, for its tactics. "The flying public in this instance had zero notice and that's why it wreaked such havoc," Kendall said.

At least one union member said the ruling was justified. "I think the judge was right," said Captain Carmen Villani, who flies out of Washington D.C. "I personally was very embarrassed what I experienced in the courtroom over the last two days."

A total of about 2,500 pilots called in sick during the job action. They were angered over the integration of recently purchased Reno Air, which has resulted in disparities in pay.

Kendall held the APA in contempt on Feb. 12 for failing to encourage its members to return to their cockpits.

An executive for American testified during a hearing before Kendall Thursday that the airline could have resumed normal operations more quickly and would not have canceled 2,279 more flights had pilots returned to the cockpits soon after a judge ordered them back to work.

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