American Airlines asks employees to accept pay freeze

AMR Corp's American Airlines has asked its employees to accept a salary freeze, the company said in a statement.

The airline's management and support staff will forgo pay increases for the second straight year, with Chairman and Chief Executive Officer Dan Carty also asking all other employees to accept a wage freeze.

Carty and President and Chief Operating Officer Gerard Arpey submitted the request to freeze salaries in a meeting with unions representing American employees Friday.

In the letter they underlined the need for other employee groups to go without scheduled wage increases in 2003 to "buy enough time to find the additional $2bn in permanent, annual structural changes needed to survive."

Maintaining salary levels stands to produce savings of some $130m.

"American's employees have an enormous stake in the financial stability of our company, and I have been heartened by their support and willingness to work with us to position American to survive and prosper," Carty said in a statement.

However, Carty added the freeze may not be enough to see American through.

"While forgoing scheduled increases is a necessary and important short-term step in our march toward survival, it cannot be the only one," he said in his letter.

"The restructuring of our labor agreements is inevitable and fundamental to our long-term goal of remaining competitive and restoring profitability."

The pay freeze comes amid a weekend board meeting by UAL Corp amid speculation United Airlines is close to seeking bankruptcy protection.