American Airlines avoids bankruptcy filing

? American Airlines flight attendants reversed themselves and approved $340 million in labor concessions Wednesday, pulling the world’s largest carrier back from the brink of bankruptcy. American welcomed the reprieve but warned that its troubles may not be over.

The Association of Professional Flight Attendants said 10,761 votes were cast for the concessions package and 9,652 against — a 1,642-vote swing from just one day earlier, when the attendants had narrowly rejected the package of layoffs, wage cuts and reduced benefits.

The union and company extended the balloting, saying some workers had run into difficulty in voting. American had vowed that if the concessions were rejected, the carrier would quickly file for bankruptcy protection.

“The people of American Airlines have together made history,” said Donald J. Carty, American chairman and CEO. “These agreements represent the most ambitious effort to consensually restructure costs ever, not only in airline history but in U.S. history.”

But in a statement, American parent company AMR Corp. said American’s financial condition is weak and its prospects remain uncertain. Said Carty: “Given the hostile financial and business environment we find ourselves in and its inherent risks, the success of our efforts is not assured.”

The board of directors of American’s parent company, AMR Corp., had been prepared to meet by teleconference Wednesday night and approve the bankruptcy filing, company spokesman Bruce Hicks said. He said the company faced credit payments of at least $50 million Wednesday and would have filed to avoid those payments and conserve cash.

Airlines have been reeling for months, hurt by the sluggish economy, fallout from the Sept. 11 attacks, the SARS virus and the war in Iraq. United Airlines is already in bankruptcy.

American has struggled against low-cost competition and AMR has lost nearly $5.3 billion in the past two years. To stay afloat, the airline asked its three biggest unions to approve $1.8 billion in labor cuts, including the layoffs of 2,500 pilots, 2,000 flight attendants and up to 1,400 ground workers.