American Airlines pilots still waiting for contract ruling

Oct 9 (Reuters) - The judge overseeing American Airlines'bankruptcy declined on Tuesday to rule on a pilots' appeal topreserve their old labor agreement, meaning the airline cancontinue making work changes while the two sides continuecontract talks.

U.S. Bankruptcy Judge Sean Lane ruled last month that theairline, the operating unit of AMR Corp , could rejectthe previous labor agreement, which had been under negotiationsince 2006.

The union appealed the decision and it has asked the courtto stop the airline from making changes while the appeal ispending, arguing that the changes cause "irreparable harm" tomembers.

At a hearing on Tuesday, Judge Lane declined to rule onunion's motion to suspend and did not set a date for a ruling onthe issue.

AMR has been in bankruptcy since November, and through thatprocess aims to find cost savings the airline says it needs tosurvive.

The airline says most of the changes in labor terms arebased on a tentative agreement that the union leaders and theairline reached earlier, but that was rejected by members.

"The vast majority of the old contract never changed," saidBruce Hicks, an American Airlines spokesman. "Of the things wehave changed, a significant majority came from the tentativeagreement that was reached with the union board in June, but notratified by membership."

But the Allied Pilots Association, the union representing10,000 American pilots, said the new terms would among otherthings eliminate an 11 percent retirement fund contributionpilots received annually and cuts compensation by $55 millionover the six-year life of the contract.

"The pilots are incensed by the new terms," said DennisTajer, an APA spokesman. "It's an overreach by management. Itputs us well below the industry standard and that's why we'refighting."

Hicks said the airline had deferred a number of changes forOctober, including the planned elimination of night pay andchanges to premiums paid for international flights.

"We are committed to working with the APA to secure a newpilot agreement that works for the pilots and allows American tosuccessfully restructure, and we're pleased that we have jointlyagreed to resume negotiations immediately," Hicks said.

Tajer said the APA also is "continuing to focus onnegotiations."

(Reporting by Alwyn Scott; Editing by Tim Dobbyn)