The negotiations process is now beginning between AMR Corp. and its unions, and 13,000 jobs are at stake.
Both sides discussed protocols with mediators Thursday. The company and the unions went over the financial picture and how a plan for layoffs introduced last week will affect each union.
"At this point in time, the bankruptcy provides additional leverage to management to reconstruct union deals," said attorney Mark Ralston, an independent bankruptcy expert.
The unions want to save jobs and their pensions. AMR has made it clear that it's looking at layoffs, possible outsourcing and an increase in productivity.
Mediators will help both sort it out for a way to emerge from bankruptcy. Creditors are already putting pressure on company to look at possible merger offers.
The Association for Professional Flight Attendants said it just wants a plan for the company to thrive in the future.
Friday, both sides will discuss pensions and benefits. AMR has made it clear that it wants to convert to 401(k) for future employees.
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Next week, unions may present alternatives. Already APFA wants to offer early retirements for 5,000 flight attendants at or near retirement age. The Transportation Workers Union is looking into similar "early-out" plans.
If the process drags out and the groups reach an impasse, the company could stop negotiations and bring it to a bankruptcy judge.
"After a few weeks, this could very well go to bankruptcy court, and AMR can seek to reject union contract," Ralston said.
That would give the company the power to impose its own plan and what it needs to do to be financially fit.
"There may be a benefit for both sides to try reach resolution," Ralston said. "At least you know what your deal will be that you've negotiated."
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