AMR Corp. has dismissed ’ deals with its unions as a tactic employed to influence the company’s bankruptcy judge rather than a legitimate attempt at a takeover.
The airline on April 23 begins a process permitted under Chapter 11 bankruptcy rules that could terminate all nine of its current collective bargaining agreements and impose job cuts, new pension obligations and revised work rules on its organized labor. The unions have an opportunity to counter AMR’s attempt, although recent airline Chapter 11 reorganizations have favored management proposals.
Since AMR invoked the so-called Section 1113 process its unions have increasingly objected to the airline’s plans, and in recent days it was becoming obvious they had decided the best option for them was to seek a third party’s intervention. That came early this morning when US Airways President and CEO Doug Parker telephoned AMR CEO Tom Horton to tell him of an agreement with’ three main union groups—the Allied Pilots Association, the Association of Professional Flight Attendants and the Transport Workers Union—that forms the basis of a takeover bid.
AMR’s reaction was immediately dismissive. “American Airlines is moving steadily through the court supervised restructuring process and the court has granted American the exclusive right to create its plan of reorganization at least until Sept. 28, 2012,” begins a statement from the Fort Worth-based airline.
“We are making substantial progress in our efforts to return American to industry leadership, profitability and growth and maximize its value for all of its stakeholders. Our immediate next step is to pursue vital modifications to our collective bargaining agreements through the 1113 process that begins on Monday, April 23,” AMR adds.
That hearing is the reason AMR’s three unions have signed their deals with US Airways, says AMR. “We believe statements of non-binding support from union leaders for alternative proposals are no coincidence given the timing of the 1113 process,’ the carrier notes in its response.
“These statements do not in any way alter the company’s commitment to pursue our business plan or our focus on moving steadily through the court supervised restructuring process to create a profitable, growing industry leader. For American’s outstanding employees and loyal customers, business continues on track, as we continue to provide the safe, reliable travel experience our customers expect,” AMR adds.