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Back on the 737
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- Jun 12, 2004
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Courtroom drama deepens for United
By Julie Johnsson
As it heads into a crucial courtroom confrontation with its unions, United Airlines is coping with another legal setback after a Chicago appellate court said it would allow aircraft leasing firms to repossess eight aircraft from the struggling carrier.
United had successfully blocked a maneuver by the lessors to reclaim the planes last fall, claiming that they had formed an illegal cartel to negotiate with the Elk Grove Township-based airline. A Chicago bankruptcy court agreed, blocking the maneuver with a temporary restraining order.
The U.S. Court of Appeals for the Seventh Circuit overturned that action Friday, ruling that United’s "antitrust claim is thin to the point of invisibility."
The ruling strengthens the negotiating stance of aircraft lessors, known as the "Chapman Group" for their counsel, Chicago law firm Chapman & Cutler. The leasing firms, which own 175 of the 460 aircraft flown by United, want the troubled airline to either make good on its original loan terms or return their airplanes.
"It clearly reduces their flexibility," says attorney Ronald Barliant, describing the impact of the appellate court’s ruling on United. "And it increases the flexibility of the lessors." Mr. Barliant is a principal with Chicago law firm Goldberg Kohn, which is co-counsel with Chapman & Cutler.
Meanwhile, United and its unions are preparing for legal hearings this week that will determine whether United can impose wage cuts on its workers and cede control of its pension plans to the Pension Benefit Guaranty Corp.
Unions representing the airline’s 6,750 mechanics and 20,000 flight attendants have already voted to strike if United breaks its existing collective bargaining agreement; a union representing 20,000 ramp workers will announce the result of its strike vote on Wednesday.
Spokesmen for the Airline Mechanics Fraternal Assn. and the International Assn. of Machinists and Aerospace Workers say they will not take any job action until the Chicago Bankruptcy Court rules on United’s motion to break their existing contracts.
However, a spokeswoman for the Assn. of Flight Attendants, says the flight attendants could strike as early as tomorrow, if United terminates the group’s pension plans. "Let’s be clear: we don’t want to strike," she adds. "We want United Airline’s management to be gone and to bring someone in who can build a viable business plan for the (airline) other than attacking its own employees."
A United spokesperson could not be reached for comment.
By Julie Johnsson
As it heads into a crucial courtroom confrontation with its unions, United Airlines is coping with another legal setback after a Chicago appellate court said it would allow aircraft leasing firms to repossess eight aircraft from the struggling carrier.
United had successfully blocked a maneuver by the lessors to reclaim the planes last fall, claiming that they had formed an illegal cartel to negotiate with the Elk Grove Township-based airline. A Chicago bankruptcy court agreed, blocking the maneuver with a temporary restraining order.
The U.S. Court of Appeals for the Seventh Circuit overturned that action Friday, ruling that United’s "antitrust claim is thin to the point of invisibility."
The ruling strengthens the negotiating stance of aircraft lessors, known as the "Chapman Group" for their counsel, Chicago law firm Chapman & Cutler. The leasing firms, which own 175 of the 460 aircraft flown by United, want the troubled airline to either make good on its original loan terms or return their airplanes.
"It clearly reduces their flexibility," says attorney Ronald Barliant, describing the impact of the appellate court’s ruling on United. "And it increases the flexibility of the lessors." Mr. Barliant is a principal with Chicago law firm Goldberg Kohn, which is co-counsel with Chapman & Cutler.
Meanwhile, United and its unions are preparing for legal hearings this week that will determine whether United can impose wage cuts on its workers and cede control of its pension plans to the Pension Benefit Guaranty Corp.
Unions representing the airline’s 6,750 mechanics and 20,000 flight attendants have already voted to strike if United breaks its existing collective bargaining agreement; a union representing 20,000 ramp workers will announce the result of its strike vote on Wednesday.
Spokesmen for the Airline Mechanics Fraternal Assn. and the International Assn. of Machinists and Aerospace Workers say they will not take any job action until the Chicago Bankruptcy Court rules on United’s motion to break their existing contracts.
However, a spokeswoman for the Assn. of Flight Attendants, says the flight attendants could strike as early as tomorrow, if United terminates the group’s pension plans. "Let’s be clear: we don’t want to strike," she adds. "We want United Airline’s management to be gone and to bring someone in who can build a viable business plan for the (airline) other than attacking its own employees."
A United spokesperson could not be reached for comment.
