Unions accept wage cuts |
http://www.sina.com.cn 2003/04/18 11:46 Shanghai Daily |
American Airlines flight attendants approved US million in job, pay and benefit cuts to keep the world's biggest carrier out of bankruptcy. Flight attendants accepted the concessions, reversing an initial rejection after getting an extra day to cast or change ballots. AMR Corp's American had said it would file for bankruptcy if it didn't get US.8 billion in combined labor savings. Pilots, mechanics and other workers approved concessions on Tuesday. After US.3 billion in losses in the past two years, American needs to lower costs to match a decline in ticket prices to 15-year lows and a slide in demand made worse by war and the outbreak of severe acute respiratory syndrome. The attendants voted 10,761 to allow the cuts and 9,652 against. The deadline was extended to give some members a chance to vote after technical problems in the ballot system and to allow all members to view recent changes to the proposal. "Because of our employees' willingness to sacrifice, both union and non-union alike, we have taken a giant step toward returning our company to financial health," Chief Executive Officer Don Carty told workers in a recorded message. The airline will also benefit from its share of US billion the US government will make available to carriers for Iraq war-related losses and a recent decline in fuel prices. Carty cautioned that the Fort Worth, Texas-based airline is "not yet home free." American also needs to negotiate lower payments with lessors and suppliers, and faces the threat of a future bankruptcy if travel and fares don't increase, he said. American said it would require at least US million more in labor savings if it seeks bankruptcy protection. American has about US.8 billion in liabilities. The company's cost reductions may allow it to renegotiate covenants on an US million loan that requires it to have a minimum of US billion in unrestricted cash and short-term investments as of June 30, said James Higgins, a Credit Suisse First Boston analyst. American had warned it was likely to violate the requirement. Under the flight attendants' agreement, pay will be reduced 15.6 percent and as many as 2,400 attendants furloughed. The pilots union approved US million in concessions, including an initial 23 percent pay cut and 2,500 job reductions. The changes take effect on May 1. |
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