FORT WORTH, Texas - Fght attendants at American Airlines 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 F. Carty, who resigned as chairman and chief executive Thursday.
"With new leadership in place at AMR, there was a renewed willingness from management to begin to repair the damage done to relations with its employees," said John Ward, president of the flight attendants' union.
The sweetened concession offer includes potential bonuses up to 10 percent for employees and shortens the length of concessions to five years, with limited renegotiations possible even sooner.
Unions representing pilots and ground workers approved the new offer Thursday and urged the flight attendants to follow suit, sources said.
Airline officials said the world's largest carrier would file for Chapter 11 protection unless all three unions accepted the wage and benefit concessions.
Employees voted last week to accept concessions but reacted angrily when they later learned that the company had approved bonuses and pension payments for top executives. Carty apologized for not disclosing the executive perks sooner, but his relationship with employees was beyond repair, union leaders said.
With the airline's fate still up in the air and its financial situation deteriorating, Carty resigned after an emergency meeting of parent AMR Corp.'s board Thursday in Dallas.
"It is now clear that my continuing on as chairman and CEO of American Airlines is still a barrier that, if removed, could give improved relations - and thus long-term success - the best possible chance," Carty, 58, said in a statement.
Arpey, the company's president, will replace Carty as CEO, while board member and former Sears CEO Edward A. Brennan will take over as chairman.