June 20 (Bloomberg) -- American Airlines pilots won’t vote on a final concessionary offer from the bankrupt carrier, leaving the future of their contract in the hands of a judge.
The Allied Pilots Association board decided 11 to 5 not to send the company’s offer to members for a vote, Gregg Overman, a union spokesman, said today in an e-mail. The decision comes ahead of a June 22 deadline for a bankruptcy judge to decide whether the carrier can throw out existing contracts and impose new terms to help cut $1.25 billion in annual labor costs.
The carrier’s offer was “too sketchy and ambiguous” to send to members for a vote, Tom Hoban, another spokesman for the pilots group, said in an interview. The union will ask American to seek more time to fully analyze some proposals, Hoban said. Pilot scheduling is the main unresolved issue, he said.
American sought court permission to void its labor agreements after failing to negotiate concessions in an earlier round of talks that followed the airline’s Nov. 29 bankruptcy filing. Those efforts echoed the results of contract talks going back as far as 2006. Fort Worth, Texas-based American in part blamed what it said are industry-leading labor costs for its Chapter 11 filing.
American made its last offer on June 15 after a final round of talks failed to produce an agreement. The APA board has been evaluating the offer and debating the membership vote since June 18.
Bruce Hicks, a spokesman for American, said in an e-mailed statement that the airline was “very disappointed” the union didn’t give pilots “the opportunity to vote on our last, best and final offer.” The proposal includes “pay increases, a mid-term adjustment to industry pay rates, furlough protection, profit sharing, seeking a freeze of the pension instead of termination, and an equity stake in the new American.”
American’s flight attendants and mechanics also failed to reach agreements during talks urged by U.S. Bankruptcy Judge Sean Lane. He had encouraged the negotiations, overseen by a second bankruptcy judge, in the hope that accords could be reached before his June 22 deadline to rule on voiding existing contracts.
American is seeking to cut spending in each work group by 20 percent a year, or $370 million for pilots, as part of the $1.25 billion. Its original proposal included laying off 400 pilots and loosening restrictions on flights made by regional partners and on use of flight marketing accords with other U.S. airlines. Details of the current offer haven’t been disclosed.
The APA, the Transport Workers Union and the Association of Professional Flight Attendants have reached contract terms with US Airways Group Inc., conditioned on a merger of the two airlines. Tempe, Arizona-based US Airways, which hasn’t made a formal bid for American, has said it’s meeting with the carrier’s creditors to build support for a combination.
Members of five work groups represented by the TWU at American approved the company’s last contract offer on May 15, meaning they aren’t included in the continued efforts to toss out existing agreements. Those groups included baggage handlers and other airport ramp workers.
The case is In re AMR Corp., 11-15463, U.S. Bankruptcy Court, Southern District of New York (Manhattan)
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