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Last Updated: Saturday, 19 April, 2003, 05:41 GMT 06:41 UK
American Airlines retreats on perks
American Airlines
The airline badly needs a deal
The world's largest airline, American Airlines, has dropped plans to award bonuses and special pension funding to its top executives following criticism by unions.

Donald Carty, chairman and chief executive, said that both he and his management team were not in the business solely for monetary reasons and they would give up the special payments.

The unions had earlier said the payments were unacceptable and warned they might reconsider their decision to support cost-cutting measures in order to save American Airlines from bankruptcy.

Pilots, flight attendants and ground staff have voted in favour of the deal - which the world's largest airline says will save $1.8bn a year.

Speaking before Mr Carty's announcement, Jim Little, the director of the union representing mechanics and ground workers, said unions had only been informed of the perks through a filing with the Securities and Exchange Commission, as the rank and file were concluding a vote on the concessions.

"If members had known about these compensation agreements, there would have been a higher turnout of No votes," he said.

'Obscene'

The disclosure of the perks had also drawn criticism from the flight attendants' union.

Its leader, John Ward, had described it as "the equivalent of an obscene gesture from management".

Flight attendants initially rejected their share of the cost-cutting plan, but reversed their decision on Wednesday, after the company extended the original deadline.

Under the plan, American Airlines' managers are to continue to run the business and cut losses, rather than handing over to a judge who would have taken control if the company had filed for bankruptcy protection.

The airline says it is losing $5m a day.

Over the past two years, it has made losses of $5.3bn as a result of a weak economy, the effects of the 11 September attacks and tough competition from low-cost operators.


WATCH AND LISTEN
The BBC's Stephen Evans
"American Airlines say they are losing five million pounds a day"



SEE ALSO:
American Airlines on critical list
15 Apr 03  |  Business
United strikes new pay deal
11 Apr 03  |  Business
US airlines fly towards extinction
27 Mar 03  |  Business
American Airlines avoids bankruptcy
01 Apr 03  |  Business
Congress approves airline aid
04 Apr 03  |  Business
Debt crushes Air Canada
01 Apr 03  |  Business


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