Just in time for some of the year’s busiest holiday travel, American Airlines finally managed to get a labor agreement with pilots approved by a court, while also scoring a win that it says will help it recover from bankruptcy. The two sides had been wrangling for months, causing the airline to accuse pilots of delaying or canceling hundreds of flights.
AMR Corp., American’s parent company, won court approval today of a deal that both cuts labor costs and helps the airline try to get out of bankruptcy, reports the Dallas Morning News.
The first matter of business involved the judge allowing American to ditch the lump-sum payments of retirement benefits some pilots wanted. American had argued that keeping that option in place would trigger a high rate of retirements among pilots.
If that lump-sum option had been kept in place, the company says it would’ve been harder for American Airlines to secure the financing it says it needs to lift itself out of bankruptcy as a standalone airline.
The judge also signed off on the collective bargaining agreement that the Allied Pilots Association ratified on Dec. 7. The deal was opposed by two small groups of pilots, including some who had worked for TWA, who said they were losing important protections that had been negotiated when American Airlines bought the airline.
But the judge said that was just how it goes.
“Bankruptcy brings with it many hardships. The sacrifices of the pilots here along with the sacrifices of the other employees are one of those hardships,” the judge said as he approved AMR’s various requests.
He also added that the agreement with the Allied Pilots Association is a boon for the company and helps achieve “long-term viability” for the airline.
“There is no doubt pilots represented by the APA are vitally important to the debtor’s business enterprise and thus crucial to any successful reorganization,” the judge said.
What with stories in the news like passengers feeling misled into paying extra fees, typhoid scares and seats coming loose in mid-flight tarnishing American Airlines’ image, the company is probably happy to have one less thing to worry about.
Bankruptcy judge dumps American Airlines pilots’ lump-sum option on pensions, approves new contract with Allied Pilots Association [Dallas Morning News]
American Airlines Judge Approves New Contract With Pilots [Bloomberg News]