American Airlines chief quits in bonuses row
The chairman and chief executive of American Airlines resigned yesterday following a row over undisclosed executive bonuses at the struggling carrier.
Don Carty stepped down following sharp criticism of his failure to disclose executive perks while workers were accepting swingeing wage cuts.
AMR Corporation, the parent of American Airlines, said that it was replacing him with the current president and chief operating officer, Gerard Arpey.
The furore over bonuses erupted as American was on the verge of filing for bankruptcy. The move would represent the largest bankruptcy filing in airline history, outstripping that of UAL's United Airlines last December.
Earlier this week, American reported recording the largest loss in airline history last year, and it lost more than $1bn (£628,615) in the first quarter of 2003 alone.
Airlines have been buffeted by the worst crisis in their history since the September 11 terrorist attacks on the US. Since then, they have suffered one setback after another, including higher fuel prices, the Iraq war and the Sars virus.
American has been trying to win wage concessions from its flight attendants, who have been reluctant to accept deep pay cuts. The airline's board was ready to file for bankruptcy today, but decided give flight attendants one more chance to accept concessions.
The unions representing pilots and ground staff have already agreed to accept a sweetened deal consisting of improved potential bonuses and shortening the duration of concessions by one year to five years.
Mr Carty made his position untenable by his failure to tell the airline's unions of special pension privileges and retention bonuses for executives until after rank-and-file workers agreed to pay cuts.
The move poisoned the atmosphere at American and earned him criticism from government, shareholders and, ultimately, the board of directors.
His resignation comes at a time when corporate America is under close scrutiny because of scandals over accounting, fraud and executive excess.
Don Carty stepped down following sharp criticism of his failure to disclose executive perks while workers were accepting swingeing wage cuts.
AMR Corporation, the parent of American Airlines, said that it was replacing him with the current president and chief operating officer, Gerard Arpey.
The furore over bonuses erupted as American was on the verge of filing for bankruptcy. The move would represent the largest bankruptcy filing in airline history, outstripping that of UAL's United Airlines last December.
Earlier this week, American reported recording the largest loss in airline history last year, and it lost more than $1bn (£628,615) in the first quarter of 2003 alone.
Airlines have been buffeted by the worst crisis in their history since the September 11 terrorist attacks on the US. Since then, they have suffered one setback after another, including higher fuel prices, the Iraq war and the Sars virus.
American has been trying to win wage concessions from its flight attendants, who have been reluctant to accept deep pay cuts. The airline's board was ready to file for bankruptcy today, but decided give flight attendants one more chance to accept concessions.
The unions representing pilots and ground staff have already agreed to accept a sweetened deal consisting of improved potential bonuses and shortening the duration of concessions by one year to five years.
Mr Carty made his position untenable by his failure to tell the airline's unions of special pension privileges and retention bonuses for executives until after rank-and-file workers agreed to pay cuts.
The move poisoned the atmosphere at American and earned him criticism from government, shareholders and, ultimately, the board of directors.
His resignation comes at a time when corporate America is under close scrutiny because of scandals over accounting, fraud and executive excess.
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