Flight Attendants And Mechanics Will Get Equity Stake In The Airline

U.S. Bankruptcy Judge Sean Lane has approved six-year contracts between American Airlines and its flight attendants and mechanics unions which will give those groups an equity stake in the airline. Judge Lane said resolving the dispute in this way was "a wise thing to do."

Bloomberg News reports that the deals will help American realize savings in labor costs it seeks in order to emerge from bankruptcy. The deals leave the airline's pilots as the only labor group without an agreement.

The deal with the AFA-CWA gives flight attendants a three percent equity stake in the carrier when it emerges from bankruptcy. Those represented by the Transport Workers Union, which includes mechanics, baggage handlers, and other units, will receive an equity stake of 4.8 percent.

Last week, the judge allowed AMR to scrap its labor agreement with the pilot's union after the rank and file rejected the airline's "last and best" offer in August.

The savings from the agreements announced Wednesday are expected to save the airline some $900 million per year. That number jumps to $1.1 billion when non-union workers are taken into account.

FMI: www.aa.com