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American Pilots Seek to Suspend Contract Rejection

Pilots for AMR Corp.’s American Airlines asked a U.S. bankruptcy judge to suspend his order allowing the carrier to throw out their labor contract and impose cost cuts while their appeal is considered.

The decision by U.S. Bankruptcy Judge Sean Lane in Manhattan allowing AMR to reject the contract will cause “irreparable harm” to pilots, the Allied Pilots Association said in a court filing yesterday.

American won Lane’s approval on Sept. 4 to impose work rule and other changes as it restructures after pilots rejected a final contract offer. The union has appealed the decision to U.S. District Court in Manhattan and is asking Lane to stay his order while the appeal is considered.

American “will implement an array of dramatic changes to pilots’ terms and conditions of employment that may evade effective redress, even if APA prevails on its appeals,” the union said in court papers.

American is clashing with pilots over the contract as it seeks to cut labor costs following its November bankruptcy filing. It was able to reach consensual deals on concessions with flights attendants and work groups represented by the Transport Workers Union, including mechanics.

Bruce Hicks, a spokesman for Fort Worth, Texas-based American, said granting the union’s request would delay savings the airline needs.

‘Cost Savings’

“We don’t believe a stay is necessary or appropriate,” he said in an e-mailed statement. “If granted, it would undermine the implementation of the cost savings the judge has already determined is necessary for this company to successfully restructure.”

The pilots rejected a final cost-cutting contract offer in in August and won a temporary victory when Lane denied American’s request to impose contract terms. After the airline revised the proposal, Lane approved the rejection.

The bankruptcy case is In re AMR Corp., 11-15463, U.S. Bankruptcy Court, Southern District of New York (Manhattan). The appeal is Allied Pilots Association v. AMR Corp., 12-04376, U.S. District Court, Southern District of New York (Manhattan).

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