The deal must still be approved by flight attendants, transport workers and the board.
By David Koenig
AP Business Writer

FORT WORTH, Texas – Negotiators for American Airlines and its unions have reached a tentative deal to keep the company out of bankruptcy, a union official said Thursday.

The president of the pilots’ union, John Darrah, said the deal would change the pay cuts approved by unions last week and would shorten the nearly six-year term of the concessions.

While the pilots’ union board has approved the deal, it is still contingent on approval by the flight attendants and transport workers, Darrah said.

The company’s board of directors also needs to vote on the deal.

The board met Thursday to consider a possible bankruptcy filing and the fate of chief executive Donald J. Carty as management tried to assuage labor leaders angry over executive perks disclosed last week.

Board members seen leaving a Dallas hotel declined to comment, referring questions to the company.

Workers and union leaders learned 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.

Word of the perks brought calls for new votes on the concessions that Carty insisted were necessary to ward off a Chapter 11 bankruptcy filing.

Carty has apologized for not telling workers sooner about the executive benefits. The company canceled the bonuses but not the $41 million in pension funding for 45 executives.

On Wednesday, American’s parent, AMR Corp., reported a worse-than-expected $1.04 billion first-quarter loss 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.