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American Airlines Turns Up The Heat On Its Unions

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The airline is making its way through bankruptcy and plans to ask a judge to throw out all its union contracts. The airline is making its way through bankruptcy and plans to ask a judge to throw out all its union contracts.
American Airlines says it's lost $10 billion over the past ten years, more than a billion in 2011 alone. American Airlines says it's lost $10 billion over the past ten years, more than a billion in 2011 alone.
Swinson says it's important to remember this motion request is one step through bankruptcy. Swinson says it's important to remember this motion request is one step through bankruptcy.
TULSA, Oklahoma -

American Airlines is turning up the heat on its unions.  As the airline works through bankruptcy, it's announced it will ask a judge to throw out all its union contracts.

American Airlines says it's lost $10 billion over the past ten years, more than a billion in 2011 alone. The airline filed bankruptcy last November.

In a letter posted online, the senior V.P. of human resources said, "We are preparing for this step now because we must face our current challenges head on and can no longer afford to wait."

"This means they're getting serious," said Sid Swinson, a Tulsa bankruptcy attorney.  He says the request to break the contracts means American is playing hardball.

"This could either be a negotiating tactic or it could be a real threat that American Airlines intends to file this motion," Swinson said.

If a judge grants the request all contracts between American and its unions would no longer be valid. Swinson says this could be a case of the airline trying to force the unions to accept a new contract that would help the airline get out of bankruptcy quicker.

Read The Letter

"Who knows exactly what's going on behind the scenes. They could be close, you just don't know. I'm sure there's a lot of negotiation that's going on that people like you and I are not aware of," Swinson said.

The president of TWU International released a statement Thursday saying, "We have always been prepared to fight for our members -- either by reaching an agreement or going to court. We are prepared for either eventuality."

Swinson says it's important to remember this motion request is one step in bankruptcy.

"It's just all part of the process in order to get to what will probably be an ultimate compromise in the form of a reorganization plan," Swinson said.

Once the motion is filed the bankruptcy judge will have 51 days to make a decision, which could include deciding to delay a decision.

American says no union has ever had a contract permanently imposed on it in the history of airline bankruptcies.

02/27/2012 Related Story: American Airlines Says No To Union's Early-Out Proposals

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