Cabin staff vote leaves American facing bankruptcy again

American Airlines flight attendants were given one more day to approve wage cuts and other concessions the airline says it needs to avoid bankruptcy, after their union said they narrowly rejected the deal.

Members of American's two other major unions – pilots and ground workers – approved concessions yesterday, but the flight attendants' union said its members had rejected concessions by fewer than 500 votes among 19,000 cast.

The world's biggest airline had said it would quickly file for bankruptcy unless all three unions approved their portions of $1.8bn (£1.1bn) in labour cuts by yesterday. But in a statement last night the airline said flight attendants would be allowed to continue voting – and to change their vote – until tonight.

Don Carty, the chairman of American's parent company, AMR Corp, said: "This is our last chance to avoid bankruptcy." He said if the flight attendants did not ratify the concessions by the new deadline, the airline would file for bankruptcy immediately.

The Allied Pilots Association said its members had approved the concessions 69 to 31 per cent. The union said 10,200 pilots – a high turnout – took part. The margin was narrower – 53 to 47 per cent – among ground workers, the Transport Workers Union said. Leaders of the three main unions had said they reluctantly supported the cost-cutting deals as an alternative to bankruptcy, which could lead to even deeper cuts.

But angry employees packed union meetings to complain the concessions were too harsh. They objected to the length of the deals – nearly six years – and small raises in later years. American sweetened the deals last week by offering one-time bonuses of up to 4.5 per cent in 2006 or later if the company's credit ratings improve sharply.

But workers began voting shortly after their unions reached tentative agreements with American on 31 March, and while pilots and ground workers were able to change their votes until yesterday, flight attendants were not. Many flight attendants may have rejected the deal before American improved its offer.

American was seeking $660m in concessions from its 12,000 pilots, $620m from 34,000 ground workers and $340m from 24,000 flight attendants.

American has been battered by a weak economy, terrorism and competition from low-cost airlines on 80 per cent of its routes. Those factors have hit hard at business travel, which was a lucrative part of American's business. American says it has cut other costs by $2bn per year. But it is still losing about $5m a day and has lost nearly $5.3bn in the past two years.