NEW YORK — It wasn’t a Broadway show, but American Airlines flight attendants and ground workers put on a performance in New York on Monday as the airline began making its case to a U.S. bankruptcy judge to cancel union contracts.
"American people are sick and tired of hearing about people losing their damn jobs," said Darrin Pierce, Transport Workers Union Local 513. "We’re basically saying we’re fed up with American Airlines’ crappy business plan."
The unions rallied for more than two hours outside U.S. Bankruptcy Court in lower Manhattan on Monday.
At issue inside the court is whether U.S. Bankruptcy Judge Sean H. Lane should cancel the airline’s labor contracts with its pilots, flight attendants and ground workers. Doing so would lead to deep pay cuts for workers and layoffs of 13,000 workers.
"It’s going to be devastating for our work group," said Leslie Mayo of the Association of Professional Flight Attendants. "We already have people getting two or three jobs just to stay afloat right now since 2003 — me included."
In court filings, American Airlines said it already cut $4 billion from its bottom line, but needs to slash even more.
The airline said it needs almost a billion more dollars in cuts from unions so the airline can climb out of bankruptcy and back to profitability.
During opening statements, an attorney for the Unsecured Creditors Committee agreed.
American said it is making across-the-board cuts of 20 percent for all work groups — not just unions.
"The non-union employees — including up to senior management — will also share the pain," said Jack Gallagher, American Airlines’ attorney. "There will be much more suffering and sacrifice if we don’t get this reorganization right."
But all along, unions have said they have already sacrificed enough by giving up $1.6 billion in cuts back in 2003 to keep American out of bankruptcy then.
An attorney for the Allied Pilots Association, which represents the airline’s pilots, said American needs to present an alternative business plan now, such as a merger with US Airways.
Laura Glading, the president of the Association of Professional Flight Attendants, agreed. "All the employees love this company, and they’d do anything to save it," she said. "I really think that’s the path we need to take."
Despite Monday’s drama outside the courthouse, American quietly revealed that it had presented a new contract offer to TWU ground workers that preserves jobs.
"The total number of jobs to be reduced will be substantially fewer if that proposal is accepted by the membership," said American Airlines spokesman Bruce Hicks.
The TWU said its membership will vote on the proposal within a week.
But it will take the court a little longer to make its billion-dollar decision. The company insists it needs additional flexibility to survive, but workers worry that will bankrupt them, instead.
American is calling 12 witnesses during its case this week, including analysts and several senior executives. Chief Reorganization Officer Beverly Goulet testifies on Tuesday.
Unions present their case against canceling contracts on May 14, and the judge is expected to make a decision by June 7.