Today is a big day for determining the fate of American Airlines, as representatives from both the company and employee unions are scheduled to meet in bankruptcy court today. With so much on the line, the fate of the company is ultimately up to the bankruptcy judge who must determine the best procedures for restructuring the company for a successful exit.
Laying It On The Line
After talks of a buyout from US Airways have strengthened over the last few weeks, American Airline executives are becoming impatient in their debt negotiations with creditors and employee unions. Union representatives have been fighting tooth and nail to prevent American from eliminating pensions and cutting employee benefits, a measure that company executives have been advocating for quite some time. Insisting that the company cannot move forward without a minimum $1 billion in cuts from employee costs, American is hoping the court will rule in their favor.
As both sides meet in court this week, the judge will be presented with arguments for the elimination of pension and benefits. The court is then scheduled to break for two weeks before hearing counterarguments from union representatives, who are requesting alternative debt restructuring measures or supporting the US Airways buyout. It will be weeks before the bankruptcy court makes its final ruling regarding the case, but history dictates that American executives may just get their way.