American Airlines pilots reject tentative contract

(Reuters) - Pilots at AMR Corp's American Airlines rejected a tentative contract from the carrier by a wide margin, leaving a major issue unresolved with the most powerful employee group at the bankrupt company.

Pilots could face stricter terms should the judge overseeing American's bankruptcy case now allow the carrier to abandon its current contract with the pilots union.

"We are disappointed with the outcome of today's voting results, as ratification of the pilot tentative agreement would have been an important step forward in our restructuring," American Airlines spokesman Bruce Hicks said in a statement.

"However, we respect the rights of our pilots to voice their opinions in the voting process. We now must await a ruling by Judge (Sean) Lane that will allow the company to implement the changes necessary to move forward with our restructuring," Hicks added.

The Allied Pilots Association, which represents 10,000 pilots, said 4,600 pilots voted against while 2,935 pilots voted in favor of the tentative contract, which represented American's best and last offer to pilots after years of unsuccessful talks.

Resolving labor issues would allow American to shift focus to its planned emergence from bankruptcy and whether it will do so alone or as part of a merger.

Also on Wednesday, the Transport Workers Union said two of its factions that represent mechanics and store clerks at American Airlines approved contract agreements that reduce concessions AMR had asked for.

Workers in mechanics and related classifications approved their agreement by a vote of 50.25 percent to 49.75 percent, the TWU said. The stores employees, who work closely with mechanics handling inventory and materials for plane maintenance, voted 79 percent to 21 percent in favor.

"Nobody is happy with a concessionary agreement, and our members are still waiting to see a business plan that instills confidence," TWU International President James Little said in a statement.

But Little added the current result was "a lot better than what our members would have faced with a court-imposed solution."

American Airlines is seeking more than $1.2 billion in cost cuts from its unions annually, a key factor in its decision to seek Chapter 11 protection from creditors last November.

(Reporting by Karen Jacobs; Editing by Gerald E. McCormick, Gary Hill)

Source: http://news.yahoo.com/american-airlines-pilots-reject-tentative-contract-180542004--finance.html

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