American Airlines argues in Bankruptcy Court to throw out Labor Contracts with Unions

Apr 24, 2012

NEW YORK (AP) — American Airlines is arguing "a restructured job is better than no job at all," as it seeks approval of a federal bankruptcy judge for its restructuring plan.

After losing more than $10 billion in the decade leading up to its declaration of bankruptcy last November, the airline says that its union contracts must be changed to make the company financially stable. It wants to eliminate 13,000 union jobs or about one in every four union workers. It's also looking to freeze or terminate pension plans, curb health benefits, reduce time off, and impose many other cuts.

The unions say American is unfairly blaming workers for the airline's woes. Last week, the unions threw their support behind a potential US Airways bid to take over American's parent company, AMR Corp. US Airways' plan for American would save about 6,200 jobs.

American is expected to take the entire week to make its case. That will be followed by a two-week break for the company and unions to try to negotiate an agreement, otherwise the judge is expected to issue a decision by June.