Flight attendants union: Court ruling 'devastating' for labor

Flight attendants union: Court ruling 'devastating' for labor

Dallas Business Journal by Matt Joyce, Staff Writer

Date: Friday, August 17, 2012, 12:26pm CDT

http://www.bizjournals.com/dallas/news/2012/08/17/apfa-court-ruling-was-...

The flights attendants union said Judge Sean Lane's ruling the American Airlines bankruptcy this week was "devastating" to the company's union workers.

Matt Joyce

Staff Writer- Dallas Business Journal

Email  | Twitter

The union representing American Airlines flight attendants says the U.S. Bankruptcy Court’s ruling on the airline’s motion to reject its pilots’ contract “was devastating for organized labor at American Airlines.”

The Association of Professional Flight Attendants told members in a web hotline that Wednesday’s 111-page ruling from Judge Sean Lane shows he “has no interest in preserving labor contracts at American Airlines.”

APFA members are currently in the final days of a ratification vote on American’s last, best contract offer. If the offer fails in a vote that closes Sunday, American would move to reject its existing APFA contract, as it did with its pilots’ contract.

“We can now say with certainty that a ‘NO’ vote will force us to live under the Company’s term sheet for some period of time,” APFA leadership said, adding that ratification would offer members some protection from “the financial harm and negative impact of the term sheet.”

“With either choice, our ultimate goal remains unchanged. The APFA will continue to push to replace Tom Hortonand his management team and achieve a merger with US Airways so that our Company can once again compete in this industry,” the APFA said.

On Wednesday, Lane denied American Airlines’ section 1113 motion, which would have allowed American to throw out its collective bargaining agreement with the Allied Pilots Association.

American pursued the motion after the APA voted down the airline’s final consensual offer. American is attempting to renegotiate its labor contracts to cut costs as part of its bankruptcy reorganization plan.

Lane disagreed with American’s requests for changes to codesharing and furloughs in the APA term sheet, but he left the door open for American to fix those parts and also approved of the majority of American’s restructuring plan.

American addressed those two issues in a term sheet presented to the APA on Thursday, and planned to renew its 1113 motion with the court on Friday, airline spokesman Bruce Hicks said.

“In the absence of a ratified agreement, it’s critical we proceed with the 1113 process to achieve the relief we need to pursue American’s successful restructuring,” Hicks said.

The Unsecured Creditors Committee, which represents creditors in the case, responded to Lane’s ruling with a statement of support for the consensual deals that American has negotiated with its unions.

So far, the Transport Workers Union has ratified their deals, the pilots have rejected theirs, and the APFA’s vote is pending.

“The committee supports the consensual deals that have been negotiated — including equity stakes for American Airlines' labor organizations and unsecured claims for American Eagle's labor organizations – assuming that consensual deals are ratified promptly,” the committee said. “If such deals cannot be reached, the committee will not support any further economic value being provided to the labor organizations. The committee will also expect that the company will promptly obtain orders abrogating any remaining collective bargaining agreements that have not been consensually resolved and will proceed in an orderly and expeditious manner to implement the terms and conditions outlined in its 1113 term sheets.”