Unions Onboard Again At American

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Unions and management at American Airlines pledged Friday to work to save the nation's largest carrier, after employees agreed to concessions despite intense anger over executive perks.

The airline's flight attendants agreed Friday to concessions that the company said it needed to avoid bankruptcy. Following approval Thursday by the carrier's two other unions, the flight attendants' decision appeared to push American back from the brink of a Chapter 11 filing.

Leaders of the Association of Professional Flight Attendants had been badly split over a concessions offer that the company sweetened this week, with lingering anger aimed at Donald J. Carty, who resigned as chairman and chief executive Thursday.

"Without your cooperation and your help, we wouldn't be here," board member and former CEO of Sears department stores Edward A. Brennan, who will take over as chairman, told union leaders at a press conference.

"We fully appreciate the gravity of the decisions that we're making," said Brennan. "At the end of the day, what we want to do is make this airline successful and prosperous going forward."

Officials at the world's largest carrier had said the troubled company would file for bankruptcy protection unless all three unions accepted the wage and benefit concessions.

On Wednesday, the carrier's parent AMR Corp. reported a $1 billion loss for the first quarter. American's package of concessions are aimed at saving $1.8 billion a year.

The original concessions package was approved by workers last week but unraveled when employees learned of previously undisclosed executive perks, including bankruptcy-proof pensions and huge bonuses. Employees harshly criticized Carty.

Carty apologized for not telling workers sooner about the executive benefits. The company eventually canceled bonuses for the top seven executives but left in place the $41 million in pension funding for 45 executives.

The new deal shortens the length of concessions by nearly one year to five years and provides bonuses of up to 10 percent of wages for meeting company-performance goals that will be the same for labor and management, said officials of the pilots' and ground workers' unions.

But it also calls for painful sacrifices from the company's workers, a fact recognized by
Gerard Arpey, the company's president, who will replace Carty as CEO.

"Many will lose their jobs," Arpey acknowledged. He asked that departing workers conduct themselves with "grace and dignity."

"We will do our very best to get them back as quickly as we can," he said.

John Darrah, President of the Allied Pilots Association, said: "The blood, sweat and tears is ahead."

Darrah had high praise for Carty, saying he made selfless efforts to save the airline this week. Flight attendants union leader John Ward was less conciliatory, saying the sides needed to "repair the damage that has been done."

"The sacrifices we make represent an investment that we are going to watch very carefully," Ward said. "American Airlines is not out of the woods yet."