ADVERTISEMENT

DALLAS – A federal judge has rejected an attempt by American Airlines to quickly cut off benefits for many of its retirees.

American wants retirees who wish to keep their benefits to pay all the cost. Now the dispute could go to negotiations or a trial.

On Friday, U.S. Bankruptcy Court Judge Sean Lane in New York rejected a request made by American’s former parent, AMR Corp., for the right to immediately eliminate retiree benefits for former pilots, flight attendants and other union workers. Lane granted AMR’s request for a group of nonunion workers.

American was left to ponder its next move.

“American will review his ruling and consider next steps related to the retiree health and life insurance benefits,” American spokesman Casey Norton said in an emailed statement. “We always remain open to productive discussions to finally resolve this matter.”

American pays about $10 million a month in health and life insurance benefits for retirees. The financial impact of the judge’s decision wasn’t immediately clear.

AMR argued that it could change health and life insurance benefits for retirees even though the company didn’t reserve the right to do so in the language of the benefit plans.

AMR filed for bankruptcy protection in November 2011 and emerged last December as American Airlines Group Inc. after merging with US Airways. .