Flight Attendants Union Tentatively Rejects AA Proposal

After reports that American Airlines flight attendants narrowly rejected the airline's labor concession agreement, an Association of Professional Flight Attendants spokesperson today said that both parties have extended the final vote until tomorrow at 5 p.m. central time.

AA said it would be forced into bankruptcy if any of its three unions rejected the agreement, which today was ratified by the pilots union and the transport workers union.

The agreement proposes that the airline cut labor costs by $1.8 billion per year through "a combination of changes in wages, benefits and work rules," according to its annual earnings report filed today with the Security and Exchange Commission.

Of the estimated $1.8 billion in savings, American expects to salvage $1 billion through wage and benefit reductions while the remaining $800 million savings would be achieved through changes in work rules, which would result in additional job reductions.

Resistance among the carrier's unions preceded today's vote as a group of pilots yesterday filed a lawsuit contesting the union ratification process and the flight attendants union on Monday asked for an extension to the vote's deadline, which American initially declined.

The narrow voting margins echoed the reluctance within the unions. Sixty percent of the pilots union and 53 percent of the transport workers union voted in favor of the agreement. However, the flight attendants union, after a filibuster that continued hours after the vote's original deadline, now has another 24 hours to complete its vote.

In its annual report released today, the carrier stated that its revenues have slipped $1.7 billion, or 8.8 percent, to $17.3 billion in 2002. American cited the slump in revenue to the "residual effects" of Sept. 11, an economic slowdown, declines in business travel, the "geographic distribution" of its network and increased competition from low-cost carriers.