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