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Latest News - July 2012

July 9, 2012
Heavy-handed unions may keep one airline from taking off
Source: OneNewsNow
By: Chris Woodard

A business advocacy organization is hoping that American Airlines will be allowed to reject current labor agreements in its bid to reorganize under Chapter 11 bankruptcy.

Airline unions are seeking new labor agreements out of American Airlines, while AMR, the airlines' Texas-based parent company, is in this bankruptcy procedure.

Stephen DeMaura of Americans for Job Security says that is not only bad for the airline, but for creditors, employees and, most of all, customers.

"Essentially, what the labor unions are trying to do is force a merger with another airline before the bankruptcy procedure ends out, and we're concerned that this has longer-range implications other than this one merger," he explains. "It would be much like what happened in the Chrysler deal, where the labor unions really won out at the expense of investors, and creditors and, in long-term, employees."

DeMaura adds that American Airlines already has a 28 percent labor cost, well above that of United, Delta and US Airways. "That is really bad for the industry," he says.

AMR expects to learn next month whether it will be granted permission to reject current labor agreements in its bid to reorganize under Chapter 11 bankruptcy.



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