American Airlines pilots on Friday voted to ratify a new union contract, ending a years-long labor dispute and stabilizing American's parent, AMR Corp, as it tries to emerge from bankruptcy.
The contract, approved by nearly three-quarters of the pilots who voted, gives the Allied Pilots' Association a 13.5 percent equity stake in AMR and offers what the union sees as a path to "industry-standard" pay, union spokesman Dennis Tajer told Reuters.
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AMR filed for bankruptcy in November 2011, primarily due to high labor costs. It said it needed to cut those costs by $1 billion a year. It achieved concessions from its ground workers and flight attendants but remained at odds with pilots in bitter labor talks that date to 2006.
AMR creditors had deemed labor peace a major priority, saying labor uncertainty could make it difficult for creditors and potential investors to assess the company's post-bankruptcy viability.
Friday's vote could be seen as addressing that concern and providing AMR a clearer path toward exiting Chapter 11.
Denise Lynn, a senior vice president at AMR, in a statement called the deal with pilots "an important step forward in our restructuring."
"Today's ratification gives us the certainty we need for American to successfully restructure," Lynn said.
How the company will look when it exits bankruptcy is still unclear. AMR is considering standalone and merger options, and smaller competitor US Airways Group has made an aggressive takeover push.
The pilots' union says it has lost faith in AMR management, led by Chief Executive Tom Horton, and strongly supports a US Airways takeover.
"This ratified agreement should not in any way be viewed as support for the American standalone plan or for this current management team," Tajer said. "This contract represents a bridge to a merger with US Airways."
The case is In re AMR Corp et al, U.S. Bankruptcy Court, Southern District of New York, No. 11-15463.
(Reporting By Nick Brown; Editing by Gerald E. McCormick and John Wallace)