American Airlines has experienced some turbulence since it filed for Chapter 11 bankruptcy three months ago.
When American filed for Chapter 11 protection on Nov. 29, 2011, it claimed its labor cost structure wasn’t competitive with other airlines. According to Bloomberg, companies can use bankruptcy to reject labor contracts in order to cut costs. But yesterday, American’s pilots’ union, Allied Pilots Association (APA), sued the airline, saying its parent company, AMR Corp., can’t use the bankruptcy case to reject a collective bargaining agreement that expired in 2008. The union seeks to block American from forcing new employment terms on its more than 10,000 members.