AMR Faces Pilots’ Appeal Over Contract Rejection Ruling

Allied Pilots Association filed a notice it will appeal the bankruptcy judge’s ruling that allowed AMR Corp. (AAMRQ)’s American Airlines to throw out its labor agreement with pilots.

U.S. Bankruptcy Judge Sean Lane in Manhattan on Sept. 4 granted American’s request to reject the pilots’ contract, saying proposed changes to the agreement are necessary for the airline’s restructuring.

The pilot’s group will ask a federal appeals court in New York to consider whether Lane’s reasoning was in error because the company made no effort to show that it coudldn’t reorganize with lesser earnings and concessions sought exceeded those needed for competitive pilot labor costs, according to a filing yesterday.

The “company demanded concessions on numerous specific terms that are wholly unnecessary to reorganization in light of the company’s own business plan and the APA’s counterproposals,” Joshua Taylor, a lawyer for the pilot’s association, said in the filing.

The case is In re AMR Corp., 11-15463, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Karen Gullo in San Francisco at kgullo@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net