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American union seeks to avoid bankruptcy

  |   March 11, 2003 at 7:18 PM
FORT WORTH, Texas, March 11 (UPI) -- The flight attendants' union at American Airlines has agreed to discuss wage and benefit concessions with the financially troubled airline, union officials announced Tuesday.

The Association of Professional Flight Attendants' board of directors authorized its negotiators and advisers to take whatever action necessary to reach an agreement with American in order for the company to avoid a Chapter 11 bankruptcy filing.

"After presentation of a thorough review of the company's finances, the APFA board of directors has determined that APFA should begin substantive discussions with American in order to reach an agreement that will help the carrier avoid bankruptcy," said APFA President John Ward.

The APFA's 25,000 members must approve any agreement reached.

"The APFA has no knowledge of an imminent bankruptcy filing by American Airlines. However, we are cognizant of the time sensitivity of this situation," Ward said. "Avoiding bankruptcy is in the best interest of both the APFA membership and American Airlines."

The announcement came four days after Ward told members that bankruptcy "may be sooner rather than later," a statement that rekindled talk of bankruptcy at American, which is asking for $1.8 billion in concessions from its major unions to avoid that fate.

AMR Corp., American's parent company, lost $3.5 billion last year and $1.8 billion in 2001.

APFA now joins the Allied Pilots Association and the Transport Workers Union in talks with American executives. The three unions represent two-thirds of the 100,000 employees at the world's largest airline.

American was pleased with the union's action.

"Our negotiating team is prepared to begin immediately the negotiations necessary to achieve the cost savings, a process which the APFA recognizes as necessary," the airline said in a statement. "The action by the APFA board is exactly what the company needs -- all of us working together to reach consensual agreements to restructure this company."

In early February, American asked for permanent concessions totaling $660 million from pilots, $620 million from ground workers, $340 million from flight attendants, $80 million from ticket agents, and $100 million from management.

American was expected to send a new concession proposal to the Transport Workers this week after the union rejected a proposal last week from the company.

American executives have said the company needs an estimated $4 billion in permanent annual savings to compete effectively and return to profitability. The Fort Worth-based airline is trying to avoid following United Airlines and US Airways into bankruptcy.

In other developments, Standard & Poor's said on Tuesday Apartment Investment & Management Co., a real estate company, will replace AMR Corp. in the S&P 500 Index, due to the airline operator's low market capitalization and stock price.

Shares of AMR lost 82 cents, or 34.02 percent, to close Tuesday at $1.59 on extremely heavy volume of 13.7 million shares traded on the New York Stock Exchange. On an average day, AMR trades 2.7 million shares on the NYSE.

Topics: John Ward
© 2003 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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