American Airlines Dodges the Chapter 11 Bullet

American Airlines has the final labor concession approval it needed to stay out of bankruptcy, but American, the world's largest airline still faces widespread resentment from its employees and difficult financial fundamentals for its segment of the airline industry. Nearly half of the airline's unionized employees voted against concession pacts despite support for the agreements from union leadership and threats of deeper cuts if airline filed for bankruptcy.

What are the concessions worth to the company? American should see a total of $1.8 billion in annual labor cost savings from the agreement with the flight attendants, coupled with the deals approved Tuesday by the other unions. But while demanding deep sacrifices from rank-and-file union employees, the airline was building in some guarantees for its top executives, according to a report in the Wall Street Journal Thursday. This part of the deal ain't pretty.

Stay tuned. We have not heard the last of this situation.

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