Coverage of the merger between American Airlines and US Airways

AA Creditors Side With Airline, Favor Ending Union Contracts

TWU to submit new offer to members for a vote

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    NEWSLETTERS

    American Airlines' biggest creditors are supporting the airline in its request throw out its union contracts, which could weaken the possibility of a merger with US Airways. American also made some headway in negotiations with one of its major unions.

    American Airlines asked a bankruptcy judge in New York City to toss out its union contracts Monday while protesters picketed outside the federal courthouse as well as at Dallas-Fort Worth International Airport.

    NBC 5's Scott Gordon reported from New York that the creditors committee is siding with the company and favors ripping up union contracts. The three unions each have a seat on the committee but were unable to convince the other six members to support their position.

    The other members of the creditors committee include investment banks, Boeing and Hewlett Packard.

    Protests Outside AMR Bankruptcy Hearing in New York

    [DFW] Protests Outside AMR Bankruptcy Hearing in New York
    Officials with American Airlines will try to convince a bankruptcy judge that labor agreements must be broken for the carrier to survive. The airline's unions say company leaders are unfairly blaming workers instead of doing something to make American grow and bring in more revenue.

    "We are not seeking a win over our unions or our employees ... We recognize we are on the same team ... no one wins unless everyone wins," said Jack Gallagher, attorney for American Airlines.

    In a letter to employees, American Airlines CEO Tom Horton addressed the 1113c process and said he remains hopeful that the airline can come to terms with the three unions before throwing out the collective bargaining agreements altogether.

    American Airlines Workers Picket DFW Airport

    [DFW] American Airlines Workers Picket DFW Airport
    American Airlines' union workers hit the picket lines outside Dallas/Fort Worth International Airport Monday in what's being called the company's largest protest, as AMR leaders try to convince a bankruptcy judge that labor agreements must be broken for the carrier to survive.

    The airline may be one-third of the way there, after striking an agreement with the leaders of the Transport Workers Union on Monday. The TWU will submit the company's latest offer to members for a vote without a recommendation on whether or not they should approve it.

    "There are alternatives that don't require those draconian cuts ... every analyst says consolidation is what has to occur," said Edgar James, attorney for the Allied Pilots Association.

    Hundreds of flight attendants marched outside airports across the country, including at least 100 who demonstrated outside Terminal D at DFW Airport.

    The flight attendants said they were marching against American Airlines' plan to cut thousands of jobs and in favor of a merger with US Airways.

    "My husband and I both work for AA, so this is our livelihood," said Liz Geiss, a union rep for APFA. "We have to support [the] option that will return this company to [the] viable competitive airline it once was."

    Dallas County Judge Clay Jenkins joined the flight attendants, saying a merger would affect all of North Texas.

    "We've got an opportunity with this merger to save jobs ... to build the largest airline in the world based right here in DFW," he said.

    In his letter to employees, Horton also addressed the agreements made last week between American's unions and US Airways, saying the agreements change nothing for American Airlines and do not alter the plan to proceed with the 1113c process in court on Monday. Additionally, the actions agreed upon by the unions and US Airways are in no way binding to American Airlines.

    "First and foremost, everyone should understand that what’s best for our company, our people and our financial stakeholders will be determined by the facts in a disciplined manner and process. And this includes whether American will choose to pursue any combination down the road. This is the charge of the board of directors and the leadership team to be done in close collaboration with the creditors committee," Horton said in the letter. Read the entire letter here.

    The flight attendants said they’ve halted negotiations for now. The Allied Pilots Association plans to continue talks after this week.

    Meanwhile, the TWU, which represents ground workers and mechanics, said it is close to reaching a tentative agreement with the company. Union leaders expect to send members either the offer for a vote as early as next week.

    “In my opinion right now, it's not a big difference, but it’s a difference” said Darrin Pierce, president of Local 513 and a member of the union’s negotiating committee. “The most important thing is the job loss, so we’ve really worked very hard to get that piece of it addressed."

    American wants to cut about 9,000 TWU jobs. The union hopes to save thousands, but still achieve the 20 percent cost reduction the company wants but specifics on the deal were not made available.

    AA will continue to make their case this week before taking a two week break before the unions present their case. AA will then be given time for a rebuttal before the judge makes the final decision. That decision may take upward of a month to be rendered.

    NBC 5's Scott Gordon, Kendra Lyn, Ray Villeda and Kevin Cokely contributed to this report.

    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.