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American pay deadline extended
FORT WORTH, Texas (CNN) -- Flight attendants at American Airlines have narrowly rejected $340 million in wage concessions designed to keep the largest air carrier in the U.S. out of bankruptcy court. But the airline has agreed to give union leaders one more day to try to secure approval of the agreement. A bankruptcy filing is expected to have little immediate effect on customers, because American has said it would continue to fly its normal schedule, but the airline would likely make schedule cuts as part of the reorganization. American, based in Fort Worth, Texas, and its regional airline affiliates serve 149 cities in North America, the Caribbean, Latin America, Europe and the Pacific Rim. It operates domestic hubs in Dallas-Fort Worth, Chicago and Miami. "With almost 10,000 jobs hanging in the balance, and the future of 100,000 employees at stake, we agreed to take this risk and make this investment for our employees because we believe that all employees will be better off if we can save jobs and restructure our costs consensually, rather than through the bankruptcy process," said American's chairman, Don Carty, in a written statement. The company had set a deadline for Tuesday for ratification of the proposal, saying it would immediately file for bankruptcy protection if the concession package was not approved. But the company announced late Tuesday afternoon that it would extend the deadline until Wednesday 6 p.m. ET. The union, which represents 26,000 American flight attendants, will extend the balloting process to allow members to change their votes, the company said. According to the APFA's Web site, the initial proposal was rejected with 9,842 votes opposed and 9,309 votes in favor. Carty made it clear that Wednesday's deadline would be the "last chance" to avoid Chapter 11 bankruptcy, which would protect the airline from creditors while it reorganizes its finances. "So that there is absolutely no confusion or uncertainty, I must make completely clear that if we fail to secure flight attendant ratification by tomorrow, we are -- regrettably -- left with no alternative but to immediately file for bankruptcy," he said. The company had announced Tuesday that American's pilots agreed to give up $660 million in concessions, including pay cuts and changes in work rules, while the Transport Workers Union, representing mechanics and ground workers, agreed to a package of concessions worth $620 million, union officials said. Approval by flight attendants was the last hurdle in the airline's quest to prevent a bankruptcy filing through cost-cutting. The leadership of all three unions reluctantly urged their members to accept the concessions, saying they were preferable to even steeper cuts that might be approved by a bankruptcy judge. "It's not pretty. But it does represent perhaps the best chance we have at this time for keeping American Airlines out of bankruptcy," said John Ward, the president of the flight attendants' union, in a message to members. American, which is due to report first quarter financial results on April 23, lost $529 million in the fourth quarter of 2002 and a staggering $3.5 billion for the entire year. If it goes into Chapter 11, it will join two other major carriers, United and US Airways, that have declared bankruptcy since a sharp downturn in air travel after the September 11, 2001, terrorist attacks.
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