What A Difference A Day Makes

With The Donald gone and Gerard Arpey now in the pilot's seat, American Airlines Friday won back the wavering Association of Professional Flight Attendants and, for the moment, staved off bankruptcy once again. But, warned Arpey, his first day as American Airlines CEO, "By any measure, we have our work cut out for us - we are clearly not out of the woods yet."

A Close Call

Company executives and their crackerjack bankruptcy lawyers were in New York Friday, ready to pull the trigger on Chapter 11. American softened the package of concessions the APFA had already voted on twice - no the first time, a narrow yes the second - and got the flight attendants to sign on the dotted line. With that, AMR stock was on the rise again, up nine percent on a day when the DOW was off 133 points.

Hello Arpey, Goodbye Bankruptcy?

Arpey (right) took over after the AMR board of directors accepted the resignation of CEO and Chairman Don Carty. He took the fall for the ill-timed disclosure of a huge executive perks package - a disclosure that came just a day after the airline's three biggest unions narrowly voted yes on a $1.8 billion cut in salaries and benefits - one that included layoffs. After the disclosure, which came in an American Airlines filing to the Securitites and Exchange Commission, APFA and Transport Workers Union leaders threatened shove the carrier into bankruptcy court by rescinding the concession package.

APFA President John Ward said the biggest single issue was what union members perceived as a lack of credibility on Carty's part. It was a vote, Ward said, that had become inevitable under Carty's leadership at American. "This voting issue was a problem to the very end. They could not wait, even a short period."

And even though the APFA has agreed to a smaller concession plan, Ward warned there's still a lack of trust toward American. "We are not going to be idle or silent in the face of future actions or inactions by the company that we believe will threaten the long-term viability of American Airlines."

Former Oklahoma Senator David Boren, now Chancellor at the University of Oklahoma and an AMR board member, said Friday, "While it is still an uphill battle in the fight against bankruptcy, we are going to give it all we've got."

The Long Goodbye

American says it's still working out a "severance package" with Carty. It's also trying to figure out how to compensate Arpey and the company's new chairman, board member Edward Brennan (above, right), without starting the firestorm all over again.

FMI: www.aa.com