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AMR Begins Talks with Pilots on Cost-Cutting (AMR)

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AMR Corp. (PINK:AAMRQ), the parent company of American Airlines, commenced talks with its pilots about concessions on Monday. AMR’s held similar discussions with flight attendants, but failed to reach an agreement on cost-cutting measures.

The discussions between AMR and its unions are being mediated by a federal judge. In case, the bankrupt company fails to reach an agreement with unions on issues such as layoffs, benefit reductions and other changes, the federal bankruptcy judge will have to decide by June 22 on whether the airline can impose its own terms.

AMR had filed for bankruptcy back in November after failing to turn in a profit in the last few years. AMR’s financial performance has been hurt by higher labor costs compared with other major U.S. airlines.

American Airlines’ discussions with the Association of Professional Flight Attendants ended last Friday, with the two parties failing to reach any agreement. American Airlines’ spokesman Bruce Hicks said that although the airline is disappointed, it hopes to continue to communicate with the union.

The bankrupt company began discussions with the Allied Pilots Association on Monday. AMR plans to layoff 400 pilots in 2012, however, the company says that it plans to grow 20% over the next five years, which would lead to 2,500 new pilot jobs and also a risen pilots’ pay.

A spokesman for the Allied Pilots Association, however, notes that there is not much credibility in the numbers as the company is not prepared to include them in a labor proposal.

The unions, meanwhile, support AAMRQ’s potential takeover by US Airways (NYSE: LCC) as they believe that the takeover is the best way to protect jobs.

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