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American Air dodges bankruptcy
FORT WORTH, Texas (CNN) -- Flight attendants at American Airlines voted Wednesday to accept $340 million in wage concessions, helping the world's largest airline dodge bankruptcy, their union announced Wednesday. American chairman Don Carty, who had threatened to file for Chapter 11 bankruptcy if members of the Association of Professional Flight Attendants voted no, said their approval of the carrier's cost-restructuring plan would clear the way for a "leaner, smarter and far more competitive airline." "We have asked much of our employees, and our employees have delivered," he said. "With these agreements, thousands of jobs have been saved." Unions representing American's pilots, mechanics and ground workers approved the plan on Tuesday, accepting steep wage cuts and changes in work rules in an effort to save American about $1.8 billion a year and keep it out of bankruptcy court. The leadership of the APFA, representing 26,000 American flight attendants, had extended voting until Wednesday at 5 p.m. (6 p.m. ET), after the proposal narrowly failed to gain approval Tuesday. Union leaders had reluctantly recommended a yes vote, fearing even steeper cuts might be imposed by a bankruptcy judge. In the final tally, flight attendants approved the airline's cost restructuring plan by a margin of about 1,100 votes, a 1,660-vote swing from Tuesday's result. But APFA spokesman Lori Bassani said, "This is not a day for rejoicing. Tough times lie ahead for our airline and for our members." "By ratifying this agreement, we will be giving up a great deal to try to keep our airline out of bankruptcy," she said. "Our vote signals our willingness as employees of this airline to step up and do our part to save our company." Although APFA's leaders had recommended approval, union officials also complained Wednesday that American representatives violated labor rules by passing out information and lobbying flight attendants to approve the concessions. "Once again, the company is showing total disrespect for the flight attendants and for their designated bargaining representative. And once again, the company has demonstrated its ability to shoot itself in the foot," said John Ward, APFA's president, in a letter to American management. Fort Worth-based American and its regional airline affiliates, with more than 100,000 employees, currently serve 149 cities in North America, the Caribbean, Latin America, Europe and the Pacific Rim. Like other major carriers, American has been losing vast quantities of money because of sluggish travel and higher security costs in the wake of the Sept. 11, 2001, terrorist attacks and the war with Iraq, both coming amid an economic downturn. In the fourth quarter of last year, the airline lost $529 million, and it lost a staggering $3.5 billion for all of 2002. American would have been the third major U.S. carrier forced into bankruptcy court since the terrorist attacks, following United, which is still in court reorganization, and US Airways, which recently emerged from bankruptcy protection. Despite Wednesday's approval of the cost-restructuring package, Carty warned employees that "we are not out of the woods yet." "This is a very tough economy, and the travel industry has been hit particularly hard. Many of the factors that affect our business are clearly beyond our control and beyond the control of our employees. But with the structural changes that we have made ... we're now in a much better position to survive the tough times and to take on our toughest competitors."
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