Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Bankruptcy Court Approves American Eagle Labor Contracts
Author: Joel R. Glucksman
Date: January 4, 2013
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American Eagle and its sister company American Airlines will be allowed to move forward with new labor contracts following court approval of the restructured collective bargaining agreements.
U.S. Bankruptcy Judge Sean Lane gave permission to American Eagle and its unions to move forward with the new terms, marking another step forward in the company’s volatile bankruptcy proceedings. The approval applies to the airlines and their unions, including Transport Workers Union, Association of Flight Attendants-CWA and Air Line Pilots Association. American Eagle president and CEO Dan Garton said he is happy that this phase of the bankruptcy is over, and is eager to continue moving forward.
“His ruling paves the way for us to begin implementing the labor cost savings that are required for our successful restructuring,” Garton told employees following the ruling. “While the past year for the Eagle team has been extraordinarily challenging, we believe what we have accomplished positions us well for a bright future.”
Although the parties stated they are pleased with the new contracts, obstacles still remain as a likely merger with U.S. Airways is being discussed. The potential partnership has forced the airlines involved to more seriously discuss labor contract issues with U.S. Airways pilot unions, who indicated they are unhappy with their current contract. While the groups are exploring solutions to longstanding labor disputes with the pilots, they are engaging in heavier talks as the merger appears to be imminent.
American Eagle, American Airlines and parent company AMR Corp. filed for protection under bankruptcy law 13 months ago, and have been involved in several labor and contract disputes that have greatly hindered their restructuring efforts.
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