American Airlines Could Throw Out Union Contract Soon

The American Airlines saga continues -- now, the company says it will file a motion to reject the collective bargaining agreement as soon as next week if a consensual agreement isn't reach soon.

"With cumulative losses of $10 billion over the past ten years - and more than $1 billion in 2011 alone - as well as our now stronger competitors continuing to benefit from their own restructurings, we face mounting financial pressures and real threats in the market," said Jeff Brundage, AA's Senior VP of Human Resources, in a letter to colleagues.

"We must act quickly to put the business plan in place. Continued delay and distractions are not only counterproductive, but come at real risk to the jobs and livelihoods of thousands of employees," said Brundage.

The statement comes after union members met with executives to discuss the planned cuts at American Eagle. In an effort to save jobs, the airline wants to cut salaries, vacations and holiday"We know the reductions proposed will be difficult, but the future of American Eagle is at stake," spokesperson Bruce Hicks said in a statement on Wednesday. Thursday, Hicks said the company will ask a federal bankruptcy judge next week to throw out its union contracts if they can't reach a deal."So we have advised our unions and the court, if we don't reach consensual agreements, we'll file the Section 1113, seeking court approval to reject the current collective bargaining agreements."

That means the company would seek to void several collect-bargaining agreements that have been under intense negotiations since American and its parent company, AMR, filed for bankruptcy last November."Thus far, we have been unable to make sufficient progress to achieve the savings necessary to return American Airlines to industry leadership," Hicks said.

The president of the Transport Workers Union says he expects the company to ask the judge to throw out its labor contracts within days.

The company initially wanted to terminate the pension plan.A union spokesman said earlier this month that there is still a lot unknown with the company's bankruptcy plan.

In February, AMR{} announced plans to cut 2,100 jobs at Tulsa's maintenance base and up to 13,000 jobs company-wide.