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American Airlines reaches deal with unions, averts bankruptcy
Washington, Apr 27: American Airlines concluded belt-tightening agreements with three labour unions and averted a bankruptcy filing.
Washington, Apr 27: American Airlines concluded belt-tightening agreements with three labour unions and averted a bankruptcy filing.
The deals reached yesterday capped a tumultuous week in which the world’s largest carrier ousted its top executive and had to fend off criticism about hefty perks being offered to top managers even as it was seeking big concessions from rank-and-file employees.
The Association of Professional Flight Attendants was the last of three unions to endorse the offer by American's parent firm AMR Corp.
In all, American said the cuts will save 1.8 billion dollars annually. Gerard Arpey, the AMR executive tapped late Thursday to be chief executive, said the new management team would "strive quickly and diligently to rebuild the financial strength of our company."
Arpey said the airline industry still faces turbulence. "By any measure, we have our work cut out for us. We are not out of the woods yet. But as your new CEO, I am up to the task. Together with our unions, we will put American Airlines back on top," he said.
Standard and Poor's said in a research note that AMR still faces troubles even with the cost-cutting deals. The deals "should materially improve American's operating cost structure, narrowing the airline's losses and operating cash flow outlook, " analysts Betsy Snyder and Philip Baggaley said in the note. The deals "should materially improve American's operating cost structure, narrowing the airline's losses and operating cash flow outlook, " analysts Betsy Snyder and Philip Baggaley said in the note.
Bureau Report
The Association of Professional Flight Attendants was the last of three unions to endorse the offer by American's parent firm AMR Corp.
In all, American said the cuts will save 1.8 billion dollars annually. Gerard Arpey, the AMR executive tapped late Thursday to be chief executive, said the new management team would "strive quickly and diligently to rebuild the financial strength of our company."
Arpey said the airline industry still faces turbulence. "By any measure, we have our work cut out for us. We are not out of the woods yet. But as your new CEO, I am up to the task. Together with our unions, we will put American Airlines back on top," he said.
Standard and Poor's said in a research note that AMR still faces troubles even with the cost-cutting deals. The deals "should materially improve American's operating cost structure, narrowing the airline's losses and operating cash flow outlook, " analysts Betsy Snyder and Philip Baggaley said in the note. The deals "should materially improve American's operating cost structure, narrowing the airline's losses and operating cash flow outlook, " analysts Betsy Snyder and Philip Baggaley said in the note.
Bureau Report