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The union representing pilots at American Airlines said yesterday that it was making preparations to call a strike vote should the carrier implement new work terms on its members, Reuters reported yesterday. The move comes days after American Airlines parent AMR again asked a bankruptcy court to void its collective bargaining agreements with the Allied Pilots Association union. A hearing on the motion has been set for Sept. 4. Should a bankruptcy judge allow the carrier to scrap its current contracts with the union, American could implement new work terms. The pilots' union yesterday said that its board approved motions directing its officers to prepare to take a strike poll and conduct electronic balloting of members should AMR impose harsher work terms.

American Airlines is going back to court to throw out its contract with union pilots after making changes to satisfy the bankruptcy judge, the Associated Press reported on Friday. If it wins in court, American could cut annual spending on pilots by more than $300 million and do more revenue-sharing deals with other airlines. American parent AMR Corp. filed a motion in U.S. bankruptcy court in New York on Friday, two days after a judge denied American's first attempt to cancel the pilots' contract. The judge rejected the company's demand for unlimited power to furlough pilots and make so-called code-sharing deals. AMR now proposes to limit possible furloughs to about 1,750 or less than one-fourth of its pilots, a ceiling set in the pilots' current contract. The company also seeks to greatly expand code-sharing but not on all routes.

AMR Corp's creditors' committee yesterday urged pilots' and flight attendants' unions to promptly reach consensual contracts with the bankrupt parent of American Airlines, saying that those employees would do far better in agreed deals than if the court abrogated contracts, Reuters reported yesterday. The creditors' committee said that American cannot afford to sweeten its latest contract offers. Any additional concessions would endanger a successful Chapter 11 bankruptcy reorganization for the airline and it would oppose them. The committee spoke out a day after a Bankruptcy Judge Sean Lane denied a request by American to abandon collective bargaining agreements with its pilots' union.

Bankruptcy Judge Sean Lane yesterday denied a request by American Airlines parent AMR Corp. to abandon collective bargaining agreements with its pilots' union, Reuters reported. Judge Lane turned down American's motion in part because it would give the carrier unrestricted ability to temporarily lay off pilots and engage in code-sharing. Judge Lane said that AMR failed to show that such "unfettered discretion" was necessary for its own operations or that it was common in competitors. AMR said that it would alter its motion and resubmit the request to terminate its agreements with the Allied Pilots Association by Friday.

A long-running dispute over pensions at United Airlines will end with small raises for some retirees, the Associated Press reported yesterday. United retirees have long claimed that the federal Pension Benefit Guaranty Corp. under-valued the $7.3 billion in assets it got from United when it walked away from its pension plans. The agency now says that it under-valued the pension assets by less than 1 percent, or $58 million. The PBGC, which took over United's pensions in 2005 during its bankruptcy, said yesterday that 8,247 United retirees — about 18 percent of pensioners — will get small raises of 1 percent or less.

Pilots at AMR Corp.'s American Airlines rejected a tentative contract from the carrier by a wide margin yesterday, leaving a major issue unresolved with the bankrupt airline's most powerful employee group, Reuters reported yesterday. Pilots could face stricter terms should the judge overseeing American's bankruptcy case now allow the carrier to end its current contract with the pilots union. The Allied Pilots Association said 61 percent of pilots that voted, or 4,600, rejected the tentative contract while 2,935 pilots voted in favor. The agreement, which included pay increases and the offer of a 13.5 percent equity stake in the New American, represented the carrier's best and last offer to pilots after years of unsuccessful talks.

US Airways Group Inc. CEO Doug Parker was snubbed three times as a merger partner in deal-making that produced the world’s biggest airlines, but taking over AMR Corp. may be his last chance to break into the top tier of U.S. carriers, according to a Bloomberg News report today. Parker engineered the 2005 merger creating the US Airways in its current form, ushering in a round of consolidation that reshaped the industry. With fewer competitors, the largest carriers have mostly stayed profitable even with higher fuel prices. AMR's bankruptcy gives him an opening to orchestrate a deal to vault US Airways past its rivals to claim the No. 1 spot in global traffic. Falling short again would leave the Tempe, Arizona-based airline in fifth place among U.S. peers, with few prospects to improve that status.

The Federal Aviation Administration is seeking a record $162.4 million of proposed and potential civil penalties from American Airlines parent AMR Corp., the Wall Street Journal reported today. The FAA is seeking a total of $156.5 million from American Airlines alone for alleged maintenance problems going back to 2007. That sum includes one previously disclosed civil penalty, $24.2 million, proposed in 2010 for the company's alleged improper fixes of electrical wiring around landing gear on its MD-80 fleet in 2008. Because the agency had to file its claims by the July 16 deadline in the AMR chapter 11 case, a number of major probes are still under way and American has not received formal penalty letters about them. The largest potential penalties listed for individual enforcement cases are $39.3 million, $28.8 million and $27.6 million.

American Airlines parent AMR Corp., which recently committed to exploring possible merger scenarios as an alternative to its plan to emerge from bankruptcy reorganization on its own, sent a nondisclosure agreement to suitor US Airways Group Inc., the Wall Street Journal reported yesterday. US Airways late on Friday said that it received the nondisclosure agreement and is reviewing it, but declined further comment. Earlier, in consultation with AMR's creditors committee, the Fort Worth, Texas-based airline targeted deal exploration with US Airways and four smaller carriers: JetBlue Airways Corp.; Alaska Air Group Inc.; Republic Airways Holdings Inc.'s Frontier Airlines unit; and closely held Virgin America.

Tom Horton, chief executive of American Airlines parent AMR Corp., says that he is feeling better about his company's prospects after nearly eight months of restructuring in bankruptcy court, the Wall Street Journal reported today. Horton, an AMR veteran who ascended to the top job on the day the company filed for chapter 11, once seemed intent on the company exiting bankruptcy alone. But amid pressure from AMR's creditors, he has softened his position, saying that the carrier is ready to evaluate possible mergers as an alternative to a reorganization plan that would see it exit court protection on its own. US Airways Group Inc. has aggressively courted its rival, even negotiating tentative deals with AMR's unions on how their members would be treated in a marriage. AMR plans to hold discussions with other airlines, and perhaps private-equity firms. In a recent meeting with creditors, named four other airlines besides US Airways that AMR will study for possible deals.