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American Airlines CEO quits
FORT WORTH, Texas (CNN) -- Don Carty, the embattled chief executive officer of the world's largest airline, resigned Thursday as the company faced the prospect of filing for bankruptcy, the company said. The resignation also follows sharp criticism aimed at Carty over plans to give executives bonuses while union members agreed to hundreds of millions of dollars in wage concessions. Carty's resignation from American Airlines came after the board of directors of the carrier's parent company, AMR Corporation, held an emergency session to discuss his fate and that of the airline. "The AMR board of directors accepted the resignation of CEO and Chairman Don Carty today," the company's statement said. Edward A. Brennan was named as executive chairman and current president, and Chief Operating Officer Gerard J. Arpey was named as the new chief executive officer, the statement said. "Ed Brennan, on behalf of the AMR board of directors, thanked Don Carty for his years of service and dedication to the company," the statement said. "They were especially grateful for his stewardship during the most difficult years in aviation history." Carty praised his successors and said their appointments will "begin to build a bridge back to the path that promised a new culture of collaboration, cooperation and trust." Arpey said he would lead the company by example. "Actions, of course, speak louder than words," he said in the AMR statement. Arpey vowed to do his very best to lead American "through these extraordinary times" and "restore the confidence of all employees in their great company," the AMR statement said. Last week, the carrier's three unions ratified concession labor pacts that would save the airline $1.6 billion a year over the next six years. But when the unions found out that management had approved retention bonuses and pension guarantees for the airline's top executives, they threatened to pull out of the labor deals.
Some progress appeared to occur Thursday when union leaders representing American Airlines pilots and ground workers said they will honor concession agreements, with slight modifications that could avert bankruptcy. But it wasn't clear whether the third key union, the Association of Professional Flight Attendants, would join in following lingering anger over management perks. The Transportation Workers Unions and the Allied Pilots Association say that with some slight modifications they are going along with pacts voted on last week that would save the airline $1.6 billion. Carty, 58, who had threatened to file for bankruptcy if the unions did not endorse the concessions, announced that the company had canceled the executive bonus plan on Friday, a day after the unions learned about it -- and two days after the flight attendants had voted in favor of $340 million in wage cuts. Carty said it was a "big mistake" that he had not told union leaders about the executive compensation packages.
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