American Airlines isn’t the only airline still in bankruptcy court negotiating over labor contracts. Memphis based airlines, Pinnacle Airlines, has been under Chapter 11 protection since early April. After months of negotiations, good news came late last week that the current pilot labor contracts could be safe from cuts for a little while longer.
Working to resolve some $1.42 billion in debts, the company has attempted major cuts to labor contracts over the last few months. These tough negotiations, along with the news that American Airline’s pilots are likely to lose negotiations over their own contracts, have Pinnacle Airline’s union pilots increasingly concerned over their fate.
However, a U.S. bankruptcy judge has given Pinnacle pilots some leverage at the bargaining table. Having refused to allow Pinnacle to impose new work terms on its 2,400 pilots, the victory for the pilot’s union is important. The judge felt that Pinnacle had “overreached” in its debt restructuring proposal, stating that the costs listed by the company for their labor obligations was “substantially over market”.
With the backing of the bankruptcy judge came the decision to reject Pinnacle’s motion to eliminate the current pilot contract, which would have included more than $60 million in annual cuts. Already one of the lowest paid pilots unions in the airline industry, Pinnacle pilots are holding out for a better deal.