Report: American Airlines to Reject Labor Contracts as Merger Rumors Continue

American Airlines, in the midst of bankruptcy proceedings, says it plans to formally reject its current labor agreements next week, unless there is a last-minute agreement with the unions.

American Airlines to Cut 13,000 Workers

Time Running Out for Labor Agreement

The Dallas Morning News cited a letter to American workers from an AA senior vice-president that says, “We have been unable to make sufficient progress with our unions to achieve the necessary savings.” The letter went on to point out that the airline has lost more than $10 billion dollars over the past decade, including more than $1  billion in 2011 alone.

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The American executive did not shut the door on a labor agreement pointing out that, “There is still time for the unions and the company … to get this done” but clearly time is running out.

Merger Partner for American?

Meanwhile, US Airways CEO Doug Parker says his airline continues its evaluation of a bid for American Airlines and acknowledged all the rumors swirling around the possibility. However, he would not comment much beyond that, except to say the evaluation of a potential merger bid continues and probably will for some time.

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Published: March 22, 2012