From: http://www.smh.com.au/articles/2003/04/20/1050777164634.html

[u]American Air deal in jeopardy[/u]

New executive perks may crash a labour-management deal designed to save the world’s largest airline from bankruptcy.

The deal appeared in jeopardy on Saturday after the leader of a key union, angered by the disclosure of the privileges, called for a new vote on the cost-cutting American Airlines package.

John Ward, president of the Association of Professional Flight Attendants (APFA), said he had sent American chairman and chief executive officer Don Carty a letter “notifying him that APFA intends to reballot the membership on the restructuring participation agreement”.

The announcement came amid a growing outcry among American Airlines’ union members over a new executive compensation package that came to light just after the unions voted to accept $US1.8 billion ($2.94 billion) in annual salary cuts to save the struggling company from going belly up.

The package, revealed in a filing with the US Securities and Exchange Commission, included hefty retention bonuses for six top airline executives and a special trust to protect the pensions of 45 top company officials in the event of bankruptcy.

Mr Carty said the purpose of the package was to give top managers an incentive to stay with the company in the difficult post-September 11 environment “when many were being offered more generous packages to go elsewhere”.

But faced with anger among American employees he issued his apologies and said the company was cancelling the retention plan.

Mr Ward, however, said he was not impressed. “No doubt, this cancellation is only a result of the fact that they were caught with their hands in the cookie jar,” he said.

He stressed that the flight attendants’ union remained committed to doing everything possible to enable the company to avoid bankruptcy but that it was also determined to protect the best interests of its membership.

“That necessitates that our members be given a fresh opportunity to vote on the proposed terms in an untainted environment,” Mr Ward said.

He did not say when a new vote might take place. But industry analysts believe a new ballot could easily scuttle the cost-cutting plan, to which the flight attendants gave only narrow approval last week – and only on a second attempt.

Like most other US airlines, American has been haemorrhaging cash since the September 11, 2001, terrorist attacks when the fear of new hijackings turned thousands of passengers away from air travel.

The company’s losses reached a staggering $US3.5 billion last year.