Dow Jones Business News
American Airlines'' Pilots Union Extends Voting Deadline
Monday April 14, 3:23 pm ET
By Scott McCartney, Staff Reporter of The Wall Street Journal
DALLAS -- The Allied Pilots Association has decided to extend voting on a cost-cutting contract agreement with AMR Corp.''s American Airlines until 9 a.m. CDT Tuesday from its previous deadline of 4 p.m. CDT Monday.
The union, which represents 13,500 pilots at American, said the extension was requested by the American Arbitration Association, which is handling the balloting for all three unions at American.
The Fort Worth, Texas airline has told its unions that if the tentative agreements, which will lead to $1.8 billion in annual labor savings, aren''t approved by 11 a.m. CDT Tuesday, American will file for Chapter 11 bankruptcy protection. The pilots union said results would be announced at 10 a.m. CDT Tuesday.
Both the Transport Workers Unions and the Association of Professional Flight Attendants earlier set Tuesday morning deadlines for voting.
FORT WORTH - A federal judge in Fort Worth has denied a request by several American Airlines pilots for a restraining order to halt voting on a proposed concessions package.
If it had been approved, the restraining order would have resulted in a bankruptcy filing, American executives have said. The carrier wants an decision on concessions from unionized employees by Tuesday, according to airline officials.
The petition to stop the vote was filed Monday morning by three pilots who argued that the board of the Allied Pilots Association, which represents 13,000 American pilots, neglected its own bylaws when it gave tentative approval to a concessions agreement earlier this month.
The board voted even though the complete language of the new contract hadn''t been drafted, the pilots argued. They were concerned that union members might not realize what they''re voting on because the wording hadn''t been finalized.
But a restraining order was not needed in this case, U.S. District Judge Terry Means ruled. In his order, he said that the petition failed to prove that the vote could cause irreparable harm to union members, and he noted that the board had waived the normal procedures because of the financial emergency at American.
He also pointed out that stopping the vote could, in fact, be damaging to the general public because of the danger of an American Airlines bankruptcy.
"A bankruptcy filing by American Airlines will have a devastating effect on the local and national economy," he wrote, "and (would) further disrupt the already crippled air transportation system."
Pilots and ground workers are scheduled to complete their voting at 9 a.m. Tuesday. Flight attendants will finish voting 10 a.m.
American executives say the concessions are vital to the airline''s survival.
The Fort Worth-based carrier has lost $5.2 billion in the past two years, and is expected to lose $800 million during the first three months of 2003 as it struggles with a steep downturn in business travel and fierce competition from discount airlines such as Southwest Airlines and AirTran Airways.