Coverage of the merger between American Airlines and US Airways

AA Unions Appointed to Key Committee

Committee will represent unsecured creditors

By Scott Gordon
|  Tuesday, Dec 6, 2011  |  Updated 12:40 AM CDT
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Flying on American Airlines the day of its parent company's bankruptcy filing was just like any other day.

Scott Gordon, NBC 5 News

Flying on American Airlines the day of its parent company's bankruptcy filing was just like any other day.

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As American Airlines' bankruptcy flies into uncharted territory, the carrier’s three largest unions have been appointed to a key creditors committee, giving employees a voice in deciding who ends up winners and losers as the company rebuilds itself.

The Allied Pilots Association, the Association of Professional Flight Attendants and the Transport Workers Union were appointed to the creditors committee by the U.S. Trustee – part of the Justice Department which monitors bankruptcies. The committee represents unsecured creditors, those who stand to lose the most because their debts are not backed up by collateral.

"There hasn't been a bankruptcy yet where the employees haven't taken the brunt of the concessions that end up coming out of the backside,” said First Officer Scott Shankland, secretary-treasurer of the Allied Pilots Association. “So this step of us getting on the creditors committee is a great first step in ensuring that we're going to be able to look out for the interests of our pilots."

Dallas bankruptcy attorney Mark Ralston said employees will certainly “take a hit” in the bankruptcy process -- with everything from pensions to contract and even flight benefits up in the air.

And for others owed money, there are no guarantees, Ralston said.

"I've seen in other airline cases where the unsecured creditors don't get paid in any cash,” he said. “They get, basically, stock in the new airline. So there's going to be a reorganized American Airlines out there, and all the unsecured creditors might get paid in shares."

Other members of the committee include aircraft-maker Boeing and banks which represent unsecured creditors.

Various creditors and employee groups share many things in common, but could also clash because of competing interests, analysts said.

Shankland said pilots were pleased to have a seat at the table to help guide the process.

"Our job is to defend the interests of the pilots to the greatest extent possible,” he said. “But we also want to return the airline to profitability. We want this airline to emerge from bankruptcy as the great carrier that it once was."

American Airlines Bankruptcy:
Find complete coverage of the American Airlines bankruptcy proceedings, expert analysis and impact to customers and the local economy in our special section. Click here for more.

American Airlines Merger:
Complete coverage of the merger between American Airlines and US Airways into the newly-formed Fort Worth-based company, American Airlines Group (AAL). Click here for more.

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