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December 19, 2012

Judge approves American's new contract with the pilots

At a bankruptcy hearing in New York on Wednesday, U.S. bankruptcy judge Sean Lane approved American Airlines' new contract with its pilots.

The six-year contract will provide $315 million in annual savings to the bankrupt carrier and was ratified by the Allied Pilots Association's members on December 7.

"Lane said the agreement with the Allied Pilots Association is a significant step to resolving the bankruptcy case that began more than a year ago and helps achieve “long-term viability” for the airline.

"'There is no doubt pilots represented by the APA are vitally important to the debtor’s business enterprise and thus crucial to any successful reorganization,' the judge said," according to this Bloomberg article.

At the hearing, the judge also granted American's request to extend its exclusivity period to file a restructuring plan with the court from January 28 to March 11. The request had the support of the Unsecured Creditors Committee.

-Andrea Ahles

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