American Airlines has received approval from the bankruptcy court to reject its pilots contract and implement a new term sheet.
The decision by Judge Sean H. Lane will now let the Fort Worth-Texas airline lower its pilot payroll, a move which aims to quicken American’s emergence from Chapter 11 bankruptcy protection, either as a stand-alone airline or potentially merged with US Airways Group Inc.
“Judge Lane’s ruling is very important because it will allow us to implement the changes that are necessary for our successful restructuring,” says American, although the company also stated there was “no sense of accomplishment” in winning the ruling and the company still wants to negotiate a new contract.
The motion to void its pilots contract was opposed by the Allied Pilots Association (APA), which represents the employees, following a hearing in New York.
APA has reportedly approved a strike vote, which will begin when the new term sheet is implemented.
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