Articles Detail

March 21, 2012

On March 16, 2012, by an agreement between the Allied Pilots Association (the "Pilots") and the Debtors authorized the Official Committee (the "Committee") of Unsecured Creditors to intervene in the adversary proceeding commenced by the APA on February 28, 2012. The Pilots seek a determination that section 1113 of the Bankruptcy Code did not apply to its collective bargaining agreement because that agreement had terminated by its terms. The Debtors filed a motion seeking to dismiss the Complaint as a matter of law arguing, among other things, that the Railway Labor Act prolongs agreements that are subject to its provisions regardless of what such agreements say about termination until the parties have exhausted dispute resolution and renegotiation processes. The Committee agrees with the Debtors' view that section 1113 is applicable notwithstanding the termination of the agreement. The Committee further adds that its principal focus is forward-looking towards the Debtors' transformation into a profitable and sustainable global. The Committee's objectives – including working with the Debtors to achieve a feasible and expeditious transformation of American Airlines and its related businesses that preserves, and hopefully enhances, business enterprise value – cannot be accomplished unless all material elements of the Debtors' revenue and expense structure are aligned with their principal competitors on a timely basis.

The Debtors' motion to dismiss is scheduled to be heard on March 22, 2012.