American Airlines Chapter 11
Recently there have been stories of pilots and flight attendants suffering some sort of breakdowns in the middle of flights. That’s scary enough, but would you want to fly on an airline where all the employees are unhappy with their employer?
American Airlines filed for bankruptcy reorganizing protection back in November 2011. Some of the reasons for filing for bankruptcy given were massive debt, high fuel costs and struggles with their labor unions.
Now American Airlines has asked a federal bankruptcy Judge in New York for permission to break their union contracts and impose cost-cutting measures on workers.
American Airlines asked the U.S. bankruptcy court to allow it to break contracts with their pilots, flight attendants, mechanics and bag handlers. It is assumed that American is trying to pressure their unions to accept concessions.
As expected, union leaders opposed and criticized American Airline’s request. Union leaders state that breaking contracts would cause lasting damage with their employees.
(Disclaimer: I am not implying that American Airlines would stop giving excellent customer service or put their passengers in any danger)
Last month the pilots’ union sued American claiming federal law prohibits American from breaking union contracts due to bankruptcy.
Bankruptcy law allows companies to break union contracts if they can demonstrate the contracts would impact the reorganization negatively and if negotiations with unions have failed.
American also plans to reduce its flight schedule and cut 13,000 jobs.
Is American Airlines doing the right thing? How do you think this will affect future service?
