American Airlines continues to stagger through financially difficult times
FORT WORTH, Texas (AP) – American Airlines reported a billion-dollar first quarter loss Wednesday as it struggles to regain control of a tumultuous labor situation and ward off bankruptcy.
The labor unrest and financial distress increase pressure on the company’s board to remove chairman and chief executive Donald J. Carty, analysts said. The board is scheduled to meet Thursday.
American canceled a Wednesday conference call to discuss its quarterly results as Carty met again with labor leaders to try to salvage cost-cutting deals that he said American needs to avoid bankruptcy.
Workers and union leaders have been outraged since learning last week that while they were asked to accept $1.8 billion in annual cuts, American had approved bonuses and pension payments for executives that would be protected even in bankruptcy.
The company has canceled the bonuses but not the $41 million in pension funding.
Pilots are threatening to join other unions in balking at wage and benefit cuts they already approved to keep the airline solvent. Although the Allied Pilots Association said Tuesday it won’t call for a new vote on the measure, a spokesman said union directors were considering telling their president, John Darrah, not to sign ratification papers.
Unions representing flight attendants and ground workers do plan to hold new votes on the concessions.
The quarterly loss was equivalent to $6.68 per share, compared with a loss of $1.56 billion, or $10.09 per share, in last year’s first quarter. Analysts surveyed by Thomson First Call had expected a loss of $6.08 per share, or $948 million.
Carty blamed the first-quarter results on weak travel demand caused by the sluggish economy, war in Iraq and the SARS outbreak, along with high fuel prices and low fares.
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