American Airlines flight attendants accept contract offer

NEW YORK Sun Aug 19, 2012 1:00pm EDT

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NEW YORK (Reuters) - Flight attendants at American Airlines on Sunday accepted the company's last and final contract offer, a decision that will help the bankrupt carrier in its bid to cut labor costs.

The Association of Professional Flight Attendants said in a statement that the vote was 59.52 percent in favor of the offer. It said 92.8 percent of the 13,544 eligible voters cast ballots.

The approval by the flight attendants eliminates the need for American parent AMR Corp to attempt to void those contracts and impose stricter labor terms. Union-represented ground workers have already approved new contracts with concessions.

AMR Corp spokesman, Bruce Hicks, said in a statement that the vote is an important step in the company's restructuring.

"We know this was not an easy decision for our flight attendants and we are very pleased with the choice they made," Hicks said.

The flight attendants' vote leaves pilots, who soundly rejected a tentative contract earlier this month, as American's only major work group that has not reached consensual deals with givebacks.

AMR has said it needs to save $1.06 billion in overall labor costs per year, and about $842 million from its unions.

The flight attendants' union said in its statement on the vote that it "will now continue our strong and concise message that we have zero confidence in this management team."

American renewed a request to the U.S. Bankruptcy Court in New York on Friday seeking to terminate its existing collective bargaining agreements with the Allied Pilots Association union and impose more draconian terms. That move followed an August 15 ruling by U.S. Judge Sean Lane denying American's original motion in part because it would give the carrier unrestricted ability to temporarily lay off pilots and engage in code-sharing.

Pilots voted down American's final contract offer by a margin of 61 percent to 39 percent on August 8. Should the bankruptcy court permit American to scrap the pilots' current contract, the carrier would still need to negotiate a long-term deal.

Resolving labor issues would allow American Airlines to shift focus to its planned emergence from bankruptcy and whether it will do so alone or as part of a merger. Last month, the carrier began sending non-disclosure agreements to potential merger partners.

American has started reviewing potential mergers, including a deal with US Airways Group, to determine whether merging with another carrier would offer greater value than emerging as a standalone carrier.

Leaders of the airline's flight attendants' union had urged members to accept AMR's offer. AMR's creditors committee had also weighed in last week, urging the unions to reach consensual contracts rather than be left at the mercy of abrogated deals the court could permit.

The case is In re AMR Corp et al, U.S. Bankruptcy Court, Southern District of New York, No. 11-15463.

(Reporting by Grant McCool and Karen Jacobs; Editing by Bernard Orr)

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