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American Airlines, Union Labor Talks Grounded After Proposals Rejected

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FORT WORTH (CBSDFW.COM) – Labor talks between American Airlines and the pilots’ union have been temporarily grounded after both sides rejected the other’s proposal this week for a new contract.

On it’s website, www.aanegotiations.com, American Airlines’ Vice President of Employee Relations, Mark Burdette, said the company is “committed to working with labor leaders throughout the negotiations process.”

While the airline’s parent company AMR stands by it’s proposed contract, stating it would put them on a path towards growth and prosperity, the pilots’ union rejected the offer.

“The offer that management made simply doesn’t meet the minimum standards,” said Tom Hoban, spokesperson for the Allied Pilot’s Association. “It’s our goal to sit back down with management and hash out the remainder of an agreement in relatively short order.”

But with contract negotiations in a deadlock, it raises concerns among some analysts that the company – which employs nearly 25,000 people – may be forced into Chapter 11 bankruptcy.

AMR won’t comment on speculation or rumor, but the pilots’ union said that hasn’t come up during labor talks.

“There’s been very little discussion of bankruptcy from management and from us,” Hoban said, “We’re interested in averting a bankruptcy. It doesn’t benefit either party to see this corporation in bankruptcy.”

CBS11 Financial Analyst Jim LaCamp believes bankruptcy is an unlikely option since AMR just sold $725.7 million in bonds in September.

“It would be highly unusual for a bankruptcy to occur this fast after a bond offering,” he said. “In fact it would open up a whole new can of worms including questions of deceit, misrepresentation or even fraud.”

“Could it be a negotiating ploy? Maybe somebody leaked something, the pilots hear about it, while going back and forth, I think it’s absolutely within the realm of possibilities,” LaCamp added.

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