- The Washington Times - Wednesday, April 16, 2003

DALLAS, April 16 (UPI) — American Airlines' flight attendants Wednesday approved their share of $1.8 billion in wage and benefit concessions sought by the financially troubled air carrier, averting an immediate bankruptcy.

The Association of Professional Flight Attendants approved $340 million in concessions by more than 1,100 votes, after rejecting the package Tuesday. Voting was extended a day because of balloting problems.

"Our employees have delivered," said American chief executive Don Carty in a statement outside American Airlines headquarters in Fort Worth. "The people of American Airlines have together made history."

Carty said the agreements represented "the most ambitious effort ever to consensually restructure costs, not only in the airline industry, but in U.S. history." He said thousands of jobs were saved by the votes the airline has made "an investment in the future."

Although thousands of jobs may be saved, the $1.8 billion in concessions will mean about 6,000 American employees will lose their jobs. Others will take wage cuts of 15 percent to 23 percent effective May 1 under the agreements.

The APFA said 10,761 members voted for the concessions and 9,652 against in the final balloting. The issue failed by 533 votes Tuesday but a last-minute decision gave the flight attendants another day to vote.

American and the three unions agreed the APFA should have another day because its members were not allowed to change their votes during the two-week voting period as members of the other unions were. Some members also said they never received ballots and needed more information.

Union leaders said many members wanted to change their votes during the period because American sweetened the deal, offering to boost pay 4.5 percent if the airline's credit rating improved dramatically and reducing the length of the contracts by four months.

American had attorneys prepared to file Chapter 11 bankruptcy papers in New York Wednesday as it did Tuesday, the original deadline for the union votes. American had millions of dollars in loan repayments due Tuesday and Wednesday.

The Allied Pilots Association and the Transport Workers Union approved their portions of the concession package Tuesday. Sixty-nine percent of the pilots voted for $660 million in concessions and 53 percent of the TWU members approved $620 million in givebacks.

Carty had warned that if the company was forced to file for bankruptcy another $500 million in employee cost cuts would be necessary and a reduction in capacity. That could mean a loss of between 8,000 and 10,000 more jobs from the ranks of more than 100,000.

But the company cautioned that even with ratification of the agreements, American's financial condition is weak and its prospects remain uncertain.

Carty warned that the company is not yet "out of the woods," and "that given the hostile financial and business environment we find ourselves in and its inherent risks the success of our efforts is not assured."

The company has also announced cuts in pay, benefits and work rules for all non-union employees, including agents, representatives, planners, support staff and management Management will take $100 million in cuts.

Carty took a 33 percent base pay cut, declined a bonus for the third consecutive year, and participated in other changes that significantly reduced the value of compensation for senior officers, the airline said.

American has lost $5.2 billion in the past two years due to a downturn in business travel, higher fuel prices, and discount airline competition, losing $5 million a day. The airline began a program last year to slash $4 billion in annuals costs to return the company to profitability.



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