%1

Leaders of American Airlines' flight attendants' union will let its members vote on the company's latest contract offer, possibly heading off a threat by the carrier to abandon current labor deals and impose stricter terms unilaterally, Reuters reported on Friday. The Association of Professional Flight Attendants' eight-member executive committee voted unanimously late on Thursday to send the plan to members for a vote. American's parent, AMR Corp, declared bankruptcy in November, citing untenable labor costs, and had been mired in unsuccessful negotiations for concessions from its three primary unions. Earlier this year, AMR asked a bankruptcy court for permission to scrap its labor contracts and impose stricter, interim terms unilaterally as long-term negotiations carried on. However, Bankruptcy Judge Sean Lane has not yet had to rule on that request, and may not have to issue a ruling at all if the company can reach consensual deals with its labor factions.

US Airways Chief Executive Doug Parker said on Wednesday that he is pleased with AMR executives' recent decision to weigh a standalone restructuring of the airline against such other options as a merger with a rival during bankruptcy, Dow Jones Daily Bankruptcy Review reported today. However, Parker, who has spent months courting AMR but largely has been rebuffed by AMR's management, warned against delay. "US Airways is here now, and we're ready to do this now. There's no guarantee that'll be the case forever," Parker said. Last week, AMR said that it would work with its unsecured creditors to discuss possible mergers as an alternative to its preferred strategy of emerging from its chapter 11 bankruptcy as a restructured, but independent, company. It sought chapter 11 protection last November and is working to secure new union agreements in a bid to reduce its annual labor costs by $1.25 billion.

In related news, American Airlines parent AMR Corp. won more time to develop its plan to restructure and exit bankruptcy as it works to consider possible mergers, Bloomberg News reported yesterday. American's request for an extension of a deadline for filing the plan was approved by Bankruptcy Judge Sean Lane at a court hearing yesterday. The ruling extends American's exclusive right to file a proposal to Dec. 28 and blocks competing plans. Read more.
http://www.bloomberg.com/news/print/2012-07-19/amr-wins-extension-of-so…

AMR Corp., which has been restructuring in chapter 11 protection since late last year, today posted a smaller net loss and the second quarter and said that its revenue hit a record high, the Wall Street Journal reported today. The Fort Worth, Texas-based company, parent of American Airlines, said that it earned $95 million, excluding $336 million in items and reorganization charges, bringing its net loss to $241 million. In the year-earlier quarter, a time before the company sought protection from its creditors, AMR posted a net loss of $286 million. Stripping out the one-time items, the latest quarterly result represents a $381 million improvement over the prior-year result.

US Airways Group Inc., which seeks a merger with AMR Corp.'s American Airlines, supports the carrier's bid for more time to develop a bankruptcy restructuring plan, Bloomberg News reported yesterday. AMR, based in Fort Worth, Texas, has asked to extend to the end of the year the company's exclusive right to file a plan as it considers mergers. US Airways, based in Tempe, Ariz., said yesterday that it supports the request, citing AMR's intention to consider strategic alternatives.

American Airlines parent AMR Corp. plans to sound out potential partners about a merger or other investment deals in coming weeks, the Wall Street Journal reported today. AMR plans to send nondisclosure agreements to other airlines as soon as this month, kicking off a formal process in which the parties would exchange nonpublic information to consider possible deals. The airline also could invite private-equity firms and other investors to study the company's books.

The parent company of bankrupt American Airlines has sought court permission to reduce retiree health benefits and add out-of-pocket costs for access to certain coverage, Reuters reported on Friday. AMR Corp. said that it would discontinue retiree life insurance and would end medical coverage for those over 65. That group would, instead, have access to a Medicare supplement at their own cost. Retirees under 65 would still have access to company plans, but at their own expense as well, according to the company. AMR asked a bankruptcy judge to declare that it has the right to alter company-funded retiree benefits because they were never vested. American's retiree health plans cover more than 40,000 people.

American Airlines parent AMR Corp. is seeking a three-month extension to its exclusive right to file bankruptcy reorganization plan as a pilots union vote pushes back the timetable for winning labor savings, Bloomberg News reported on Friday. Extending the deadline to Dec. 27 from Sept. 28 would delay any formal merger proposal to creditors from US Airways Group Inc., which is weighing a takeover. It also may mean missing American Airlines CEO Tom Horton’s goal of a 2012 bankruptcy exit as he works to keep Fort Worth, Texas-based American independent while the airline restructures. While pilots union leaders agreed last week to let members vote on $315 million in givebacks, balloting will not end until Aug. 8.

AMR Corp.'s American Airlines won court approval for new labor agreements with five groups represented by the Transport Workers Union as the airline works to reach deals with pilots and flight attendants, Bloomberg News reported yesterday. Bankruptcy Judge Sean Lane said at a court hearing today that American, which is seeking to cut labor costs as part of its restructuring, can enter into the new agreements. The approval comes as pilots at American are set to vote on new contract terms with the airline. Flight attendants and two other TWU groups that have not reached agreements with the carrier are planning to resume talks.

American Airlines pilots will vote on a revised contract proposal paring bankrupt AMR Corp.'s bid for concessions, and the carrier said that a judge would delay ruling on a request to void contracts with its biggest unions, Bloomberg News reported yesterday. The Allied Pilots Association board agreed today to hold an election on the latest accord, which calls for shrinking AMR’s demand for labor savings by 15 percent, to $315 million. That step came just before the deadline set by Bankruptcy Judge Sean Lane. The move marks progress in Fort Worth, Texas-based AMR's effort to win $1.25 billion in annual labor savings. While five employee groups in the Transport Workers Union have approved givebacks, two other TWU groups held out. Neither the pilots nor flight attendants unions have accepted demands from AMR, which has asked Judge Lane to cancel its existing agreements.

Days before a U.S. bankruptcy judge is expected to rule on labor savings at American Airlines parent AMR Corp., two unions indicated they are willing to resume bargaining over new contracts the carrier said it needs to successfully restructure, the Wall Street Journal reported today. Meanwhile, the leaders of a third union, representing American pilots, are meeting to decide whether to put AMR's latest contract offer out to a membership ratification vote. The Association of Professional Flight Attendants, which has not made much progress in negotiations with AMR, also may be gearing up for new talks. Last week, the board of the Allied Pilots Association voted 11-to-5 against putting to a membership vote what AMR termed its final offer. But the two sides asked Bankruptcy Judge Sean Lane to give them a few more days so the union could clarify its understanding of the offer. Judge Lane agreed, but insisted the pilots board make its decision known by the end of today.