AMR's Plan to Scrap Pilot Union Pacts Denied

Features Reuters

A U.S. judge on Wednesday denied a request by American Airlines parent AMR Corp to abandon collective bargaining agreements with its pilots' union, an unexpected decision and setback for bankrupt AMR in its quest to save more than $1 billion a year in labor costs.

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In a written ruling in U.S. Bankruptcy Court in Manhattan, Judge Sean Lane, who is overseeing AMR's restructuring, denied the carrier's motion to abrogate the deals and implement a term sheet that would have threatened hundreds of pilot jobs.

AMR filed for bankruptcy protection in November.

The case is In re AMR Corp et al, U.S. Bankruptcy Court, Southern District of New York, No. 11-15463.