American to implement new pilots contract

Washington DC
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American Airlines received approval from the bankruptcy court to reject its pilots contract and implement a new term sheet today.

US Bankruptcy Court for the Southern District of New York judge Sean Lane approved the Fort Worth-based carrier's revised section 1113 motion to void its pilots contract despite concerns raised by the Allied Pilots Association (APA), which represents the employees, following a hearing in New York.

"Judge Lane's ruling is very important because it will allow us to implement the changes that are necessary for our successful restructuring," says American.

The airline filed the revised term sheet on 17 August following judge Lane's rejection of its original request citing concerns over the proposed codeshare and furlough language on 15 August.

Under the new term sheet, American can enter into unlimited domestic codeshares with Alaska Airlines, Hawaiian Airlines and other carriers with a few exceptions. Routes between Hawaii and Chicago O'Hare, Dallas-Fort Worth, Los Angeles and San Diego would be excluded from a partnership with Alaska, and the Hawaiian agreement would only cover intra-island flights.

New domestic codeshare agreements also cannot exceed more than 50% of American's domestic available seat miles during any 12-month period.

Furlough language from the now rejected contract was kept in the new term sheet. American can furlough up to 2,000 pilots and has a force majeure clause allowing for additional furloughs in the case of unexpected events.

American says that it will share implementation plans with the APA during the next few days.

The APA did not comment by press time.

The union approved a strike vote, which will begin when the new term sheet is implemented, on 22 August.