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Last Updated: Friday, 25 April, 2003, 23:05 GMT 00:05 UK
American Airlines saved from the brink
American Airlines
AA is the world's biggest airline

American Airlines narrowly escaped going bust after it said it had reached a last-minute deal with its flight attendants.

The cash-strapped airline on Friday agreed on a revised concession deal with the Association of Professional Flight Attendants (APFA).

The flight attendant's union was the only party still holding out after the world's biggest airline reached an agreement with its pilots and ground workers and mechanics unions earlier.

It has been reported American Airlines' board of directors were ready to throw in the towel and file for Chapter 11 bankruptcy protection if the flight attendants had not accepted a revised concession deal.

Heads rolling

On Thursday, AA's chief executive Don Carty resigned amid a rebellion over his failure to disclose executive perks while employees had to accept heavy pay cuts.

AMR, American Airlines' parent company, said on Friday it had replaced Mr Carty with current president and chief operating officer Gerard Arpey.

Shares in AMR initially jumped 20% on the news.

AMR closed 41 cents higher, or 10%, to $4.45.

The unions agreed on wage concessions after American Airlines said it would change its profit-sharing terms, decrease the terms of the deal from six years to five years, and allow the contracts to be renegotiated after three years.

"This will ensure flight attendants will receive fair treatment when the company returns to financial viability," said APFA President John Ward.

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