The Transport Workers Union representing American Airlines pilots turned down a six-year cost-cutting contract yesterday, as the airline’s’ mechanics and aircraft stock clerks ratified new labor agreements.
The offer would have rescinded the current labor agreement — and offered modest raises, furlough protection, a 401k boost and an equity stake in the airline’s parent company AMR Corp (PINK:AMMRQ).
Now, the issue will be taken to U.S. Bankruptcy Court, which has been overseeing the reorganization of AMR. This will delay the process — if the agreement had been ratified, the company would have won all its labor-saving costs through negotiation and would have reaped those savings faster.
The contract was rejected by a a vote of 61%, or 4,600 pilots, while the remaining 30%, or 2,935, voted for the new agreement.
Shares of U.S. Airways have more than doubled since January, while AMR Corp has also seen solid gains of around 25%.