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Dow Jones Business News
AMR Sets Morning Deadline to Wrap Up Contract Talks
Monday March 31, 9:37 am ET
By Scott McCartney
DALLAS -- AMR Corp.''s American Airlines has imposed a deadline of 11 a.m. EST Monday to conclude talks with labor unions to avert a bankruptcy filing, according to people familiar with the situation.
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Talks continued this morning, and no major breakthroughs were reported. The world''s largest airline has told its unions that it will seek bankruptcy-court protection, perhaps as early as this afternoon, if they don''t agree to $1.8 billion worth of contract concessions.
Still, many people close to the situation believe that in the end, unions will agree to the company''s plan and put the concessions out for a vote by rank-and- file members. The alternative -- bankruptcy -- means contracts would be completely voided and rewritten, risking pension benefits and deeper cuts than American has proposed.
Late Sunday night, the company gave its pilots union a document outlining what AMR would ask for in a Section 1113 proceeding in bankruptcy court. Several pilots characterized it as worse for them, or at least the same as, the tentative agreement UAL Corp.''s (UAL) United Airlines has negotiated with its pilots while in bankruptcy. While some pilots saw the move by management as an escalation of company demands, others said AMR management seemed to be trying to pressure them to take the company''s offer, rather than the more painful bankruptcy routing.
A spokesman for American said the company had not increased its demand of $660 million in concessions from the pilots.
American has asked its mechanics and ground workers for $620 million in concessions. Seven of the eight divisions of that union have agreed, though the mechanics, who number 16,200, have yet to sign a tentative agreement. Flight attendants, who have been asked to give up $340 million in permanent, annual payroll costs, also have not concluded a deal.
-Scott McCartney, The Wall Street Journal
AMR Sets Morning Deadline to Wrap Up Contract Talks
Monday March 31, 9:37 am ET
By Scott McCartney
DALLAS -- AMR Corp.''s American Airlines has imposed a deadline of 11 a.m. EST Monday to conclude talks with labor unions to avert a bankruptcy filing, according to people familiar with the situation.
ADVERTISEMENT
Talks continued this morning, and no major breakthroughs were reported. The world''s largest airline has told its unions that it will seek bankruptcy-court protection, perhaps as early as this afternoon, if they don''t agree to $1.8 billion worth of contract concessions.
Still, many people close to the situation believe that in the end, unions will agree to the company''s plan and put the concessions out for a vote by rank-and- file members. The alternative -- bankruptcy -- means contracts would be completely voided and rewritten, risking pension benefits and deeper cuts than American has proposed.
Late Sunday night, the company gave its pilots union a document outlining what AMR would ask for in a Section 1113 proceeding in bankruptcy court. Several pilots characterized it as worse for them, or at least the same as, the tentative agreement UAL Corp.''s (UAL) United Airlines has negotiated with its pilots while in bankruptcy. While some pilots saw the move by management as an escalation of company demands, others said AMR management seemed to be trying to pressure them to take the company''s offer, rather than the more painful bankruptcy routing.
A spokesman for American said the company had not increased its demand of $660 million in concessions from the pilots.
American has asked its mechanics and ground workers for $620 million in concessions. Seven of the eight divisions of that union have agreed, though the mechanics, who number 16,200, have yet to sign a tentative agreement. Flight attendants, who have been asked to give up $340 million in permanent, annual payroll costs, also have not concluded a deal.
-Scott McCartney, The Wall Street Journal
