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Flight Attendants Balk at American's Pay Cut

Workers get extra day to vote on plan called airline's last chance to avoid bankruptcy.

April 16, 2003|From Associated Press

FORT WORTH — American Airlines flight attendants balked at approving $340 million in wage concessions Tuesday but were given one more day to change their minds and keep the world's largest airline out of U.S. Bankruptcy Court.

"This is our last chance to avoid bankruptcy," said Don Carty, chairman of American parent AMR Corp.

Pilots and ground workers accepted their portions of $1.8 billion in cuts American says it needs to avoid filing for Chapter 11 bankruptcy protection. But flight attendants were on the verge of rejecting the deal by a margin of less than 3% Tuesday, the original deadline, a union official said.

The firm said Tuesday that flight attendants would be allowed to continue voting -- and to change their votes -- until 3 p.m. PDT today.

Leaders of American's three main unions support the concessions as a better alternative to operating under Bankruptcy Court protection. They fear that American would use the bankruptcy process to impose even harsher cuts and reduced pension benefits.

"To willingly take our airline and our company into bankruptcy would not be a better alternative," said John Darrah, president of the Allied Pilots Assn.

But after labor leaders reached tentative accords with the company two weeks ago, angry employees packed union meetings to complain that terms of the concessions were too harsh. They objected to the length of the deals -- nearly six years -- and small raises in later years.

American then sweetened the deals last week by offering one-time bonuses of up to 4.5% in 2006 or later if the company's credit ratings improve.

AMR stock rose 32 cents to $3.40 on the New York Stock Exchange and gained 27 cents more after hours.

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