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American wants to redo airline union pacts

Members of American Airlines’ unions rally in Manhattan

Members of American Airlines’ unions rally in Manhattan on Monday. The carrier’s management says layoffs and pension adjustments are necessary. Unions say American must bring in more revenue. (April 23, 2012) Credit: AP

American Airlines argued before a federal bankruptcy judge Monday that its union contracts need to be changed to make the company financially stable.

The airline lost more than $10 billion in the decade leading up to its declaration of bankruptcy in November. During that same period most of its major rivals used the bankruptcy process to cut wages and benefits, which American says has left it saddled with higher labor costs.

American wants to eliminate 13,000 union jobs -- about one in every four union workers -- freeze or terminate pension plans, curb health benefits, reduce time off, and impose many other cuts.

"A restructured job is better than no job at all," said Jack Gallagher, a lawyer for the airline. Noting that once-great airlines such as Pan Am and TWA have disappeared, he said, "We don't want to join them." The airline also told the court that management costs will be cut by 20 percent through layoffs and wage cuts.

American said in February it employed 3,855 people at Kennedy Airport and 3,006 at LaGuardia Airport, both in Queens.

The airline's unions say company leaders are unfairly blaming workers instead of bringing in more revenue.

On Friday, the unions expressed their defiance by supporting a potential bid by US Airways to merge with American's parent company, AMR Corp.

On Monday, the unions rallied outside the courthouse, blocks from Wall Street, saying that the workers were part of "the 99 percent." They carried signs that said, "Profits First, Workers Last" and "Merge don't purge."

American is expected to take the entire week to make its case. Those arguments will be followed by a two-week break for the company and unions to try to negotiate an agreement. If none is reached, the unions will present their case and the judge is expected to issue a decision by June.

With Carrie Mason-Draffen

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