Bankruptcy fears rise after union rescinds 'tainted' vote

DALLAS -- A decision by a union at American Airlines to toss out the results of an election on labor concessions has renewed fears that the troubled airline may have to file for bankruptcy.

The flight attendants' union announced late Friday night that it would vote again on its share of $1.8-billion in annual concessions. The union had approved the cuts earlier in the week.

The union called for a new election after American belatedly disclosed bonuses for seven top executives and partial funding of extra pension benefits for 45 executives. The perks were approved last year but not disclosed until the end of regular voting by employees on the concessions, which for all employees total about $10-billion in wages and benefits over six years.

"The vote is so tainted that we are proceeding with a revote," said John Ward, president of the Association of Professional Flight Attendants.

American booted the bonuses Friday. The airline had said it would file for bankruptcy immediately if any of its three main unions failed to approve the concessions.

American has given only a limited public reaction to the call for a new election by the Association of Professional Flight Attendants. A company spokesman would say only that the airline "has a valid, ratified agreement with the APFA."

But the flight attendants' move appears to have ruffled feathers at the union representing American's pilots, which fears that its members' pensions could be wiped out if American files for bankruptcy.

An aviation consultant said that holding a new election would be driven by emotions, not economics.

"It's psychology. It's emotions-driven," said Richard Aboulafia of the Teal Group in Fairfax, Va. "We're in the realm of possibly the irrational here."

But another expert, Lance Compa, a labor law professor at Cornell University, said the flight attendants might have a good legal case that American failed to bargain over concessions in good faith by withholding information about the bonuses and pension perks for executives.

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