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Two American unions OK deals

Vote by pilots, ground workers clears 2 of 3 hurdles airline needs to avoid bankruptcy.
April 15, 2003: 12:24 PM EDT



NEW YORK (CNN/Money) - American Airlines pilots and ground workers agreed to concession contracts, letting the world''s largest airline clear two of three hurdles needed in its effort to stay out of bankruptcy.

The rank and file of the Allied Pilots Association voted 69 percent in favor the pact, which is expected to save the airline $660 million a year in labor costs. The Transport Workers Union, which represents ground workers such as mechanics and baggage handlers, also approved their deals, but by more narrow margins. But the airline has said it also needs rank and file approval by the Association of Professional Flight Attendants to avoid bankruptcy, and there was no immediate word on results of that vote. The company had set an 11 a.m. CT deadline for all the ratifications to take place.

Shares of AMR (AMR: up $0.62 to $3.70, Research, Estimates) were up nearly 20 percent immediately following the midday announcement.