Judge denies American Airlines request to cancel pilots contract



Bio | Email | Follow: @jasonwhitely


Posted on August 15, 2012 at 5:12 PM

Updated Monday, Nov 11 at 3:45 PM

DALLAS - In an unprecedented and historic move, U.S. Bankruptcy Judge Sean Lane denied American Airlines' request Wednesday to cancel its long-standing labor contract with the Allied Pilots Association.

"This is a huge victory for the pilot group," said Scott Shankland, Secretary-Treasurer, Allied Pilots Association.

The judge said American's proposal to code share, or outsource some of its flying, was overreaching. In addition, Judge Lane expressed concern with American's plan to furlough an unlimited number of pilots.

This is the first time a pilots union has let a judge decide the fate of its contract. Unions from other airlines have always accepted 11th-hour deals from their companies to avoid the possibility of having a judge cancel years of collective bargaining.

"There's not an airline pilot group that has seen this kind of victory in a courtroom ever," said Tom Hoban, Allied Pilots Association.

Wednesday was also the first time a labor union has won such a ruling. Traditionally, courts rule in favor of businesses during this phase of bankruptcy, known as an 1113 Motion.

"We are truly in uncharted territory," Shankland added.

Last week, pilots rejected American's final contract offer, which essentially left their future up to Judge Lane.

Just after lunch on Wednesday, Lane shared his ruling in a conference call with the Allied Pilots Association and American Airlines, but ordered them not to reveal it for hours.

Still, Lane's 111-page ruling is only a limited victory for pilots.

"We hope they understand what this ruling says and doesn't say, and don't anticipate that this means there's another bite at the apple," said Bruce Hicks, American Airlines spokesman. "Because that is not what this says at all."

American said it would make the adjustments Judge Lane noted and refile its motion in court -- confident it will eventually get permission to cancel the APA's contract.

"That's right," Hicks said. "This is just one small step in the process. This is not a setback or anything like this."

It may not be a setback for American. But it is a victory for pilots.

Though, it's uncertain just how long they'll be able to enjoy it.

American said it would likely resubmit that term sheet for pilots by Friday and ask for an expedited ruling, meaning the Allied Pilots Association will likely face this same situation again within weeks.

E-mail jwhitely@wfaa.com