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AMR Corp., parent of American Airlines and American Eagle, this week notified some 11,000 mechanics and groundworkers that they could be laid off as part of the company's bankruptcy restructuring, although actual layoffs will be far fewer, the Chicago Tribune reported today. Of the 11,000 members of the Transport Workers Union who received notices, fewer than 40 percent, or 4,400, will eventually be laid off, said AMR said. The 4,400 layoffs are far fewer than the 8,500 called for in AMR's original restructuring plan announced in February. The layoffs number was bargained down in contract negotiations between the company and the union.

American Airlines pilots have outlined their appeal of a bankruptcy court ruling that paves the way for the airline to toss out their labor contract and impose new, concessionary terms, Dow Jones Daily Bankruptcy Review reported on Friday. The Allied Pilots Association, which represents about 10,000 American Airlines pilots, last month appealed a bankruptcy judge's opinion that significant changes to the pilots' contract were necessary to AMR Corp .'s restructuring. The union originally declared the Aug. 15 ruling from Bankruptcy Judge Sean Lane a "rare chapter 11 victory for labor" because he denied AMR's request to toss the pilots' existing contract and impose new terms. However, the judge only did so because he found AMR overreached in two areas, and once AMR fixed its proposal, he approved the request early this month. In court papers filed on Wednesday, the union laid out the questions that it would ask the district to consider as part of its appeal. Among those questions are whether the bankruptcy court even had the right to authorize AMR to toss a labor agreement the union insists had expired.

AMR Corp.'s American Airlines won bankruptcy court approval of new cost-cutting labor agreements with unions for flight attendants and mechanics, which will get equity stakes in the airline, Bloomberg News reported yesterday. Six-year contracts were approved Bankruptcy Judge Sean Lane, who said that "labor peace" was valuable to the bankrupt airline. The accords secure savings that Fort Worth, Texas-based American says are critical for its restructuring. Pilots are now the airline's only union that has not agreed on concessions. Judge Lane last week approved American’s request to reject the collective-bargaining agreement with pilots and impose cost cuts. The ruling came after the pilots rejected a proposed contract.

U.S. Trustee Tracy Hope Davis is objecting to American Airlines’ agreement to pay professional fees incurred by the Transport Workers Union (TWU) and Association of Professional Flight Attendants (APFA), the Dallas Morning News reported today. In a limited objection to new contracts approved by TWU and APFA members, Davis said that those fees and expenses should undergo the same scrutiny as those incurred by others involved in the bankruptcy case of American and parent AMR. Bankruptcy Judge Sean Lane is scheduled on Sept. 12 to hear American's motion to approve new collective bargaining agreements between American and the two unions.

AMR Corp.'s American Airlines and United Continental Holdings Inc. must face a federal trial over negligence claims tied to the hijackings of jetliners on Sept. 11, 2001, used in the terrorist attacks that killed about 3,000 people in New York, Washington, D.C., and Pennsylvania, Bloomberg News reported yesterday. World Trade Center Properties LLC, which owned the twin skyscrapers in lower Manhattan destroyed in the attacks, sued the airlines in 2008 alleging negligence against the carriers for allowing terrorists to board and hijack the planes that were flown into the buildings. U.S. District Judge Alvin Hellerstein in Manhattan said that a trial is required.

AMR Corp.'s American Airlines won court approval to throw out its labor agreement with pilots, capping the airline's campaign to force cost cuts on the lone union it could not reach a deal with on concessions, Bloomberg News reported today. Bankruptcy Judge Sean Lane yesterday granted American's request to reject the pilots' contract, saying that proposed changes to the agreement are necessary for the airline's restructuring. The Allied Pilots Association had argued that American's demand for $370 million in cost savings from the pilots "greatly exceeds" the amount required to reorganize.

American Airlines and US Airways said on Friday that they have started confidential merger talks, the Associated Press reported on Friday. Such a merger would put the combined airline on par with the world's largest — United Continental Holdings Inc. — and the slightly smaller Delta Air Lines. Its position as the No. 1 or No. 2 airline in the world, based on how many miles its passengers fly, would depend on how many routes anti-trust regulators force the combined airline to abandon. Many industry experts say that the only way American and US Airways can compete with larger rivals is by merging their strengths. US Airways would gain American's lucrative international routes while American's larger hubs would be fed passengers from US Airways' network in smaller U.S. cities.

Pilots at American Airlines will not go on strike unless it is legal to do so, the president of the pilots' union said yesterday, Reuters reported. The Allied Pilots Association had said last week that it was making preparations to call a strike vote should American implement harsh new work terms on pilots. The carrier has been operating under chapter 11 bankruptcy protection since late last year. Keith Wilson, who was named to head the pilots' union earlier this month after his predecessor resigned, said yesterday that while the union is exploring legal options, it would be difficult to stage a walkout while American, a unit of AMR Corp., is in bankruptcy. A hearing on a second American Airlines request to void the carrier's collective bargaining agreements with the pilots' union is scheduled for Sept 4.

American Airlines parent AMR Corp. said that a group of "substantial creditors" is interested in potentially providing financing for the airline’s bankruptcy reorganization, Bloomberg News reported yesterday. The creditors expressed an interest in participating in the development of a bankruptcy plan and "potentially providing for equity and other financings" that may be needed, AMR said in a court filing yesterday. "The negotiations with the group are an integral part of American's efforts to move forward to achieve the objectives of chapter 11," Fort Worth, Texas-based AMR said in the filing. "The commitments, if obtained, will facilitate the proposal and confirmation of a chapter 11 plan."

AMR Corp. is asking a bankruptcy judge to sign off on new labor agreements with its mechanics that will save the American Airlines parent nearly $172 million per year while also providing for annual pay increases, Dow Jones Newswires reported yesterday. Transport Workers Union (TWU) of the America members ratified the concessionary labor agreements earlier this month. AMR said that the new collective bargaining agreements, which last for six years, will save it $171.7 million annually and give it greater flexibility. The scope and requirements of certain jobs will be expanded, certain job protections will be eliminated and overtime, vacation and sick leave terms will be modified. Employees will benefit from annual pay increases and company contributions into their pension plans, while their existing pensions will be frozen.