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American Airlines Flight Attendants Accept Concessions Package - 2003-04-25

Flight attendants for American Airlines have joined pilots and ground crews in agreeing to labor concessions, aimed at keeping the troubled carrier out of bankruptcy.

American Airlines appears to have narrowly avoided financial ruin for the second time in as many weeks. The concessions package approved by flight attendants closely mirrors an earlier deal reached last week. But it shortens the time that painful wage cuts will be in place, and stipulates a bonus for employees, should the carrier's fortunes improve.

Under the first agreement, labor unions representing pilots, flight attendants and ground workers approved wage cuts and other concessions totaling $1.8 billion. American Airlines said, without the deal, the carrier would have no choice but to file for bankruptcy.

But the agreement promptly fell apart. Shortly after the union votes, reports surfaced that American Airlines had approved pay bonuses and pension protection plans for its top executives. The company said the measures were designed to keep executives from leaving the company during what is expected to be a painful reorganization process in the carrier's quest for profitability.

Union leaders were outraged, accusing American Airlines of deception and failure to disclose information that might have swayed rank-and-file employees to vote against the concessions package.

The carrier's chairman, Donald Carty, apologized profusely, then resigned earlier this week. His resignation appears to have assuaged union leaders, who have expressed hope for better relations between management and employees.

American Airlines has lost more than $5 billion in the last two years. Like all carriers, American says it has suffered from a weak economy, rising fuel costs and concerns about terrorism in the aftermath of the September 11 attacks in New York and Washington in 2001.