Donald Carty, whose handling of executive perks enraged employees, on Thursday resigned as chairman and CEO of troubled airline carrier

AMR

(AMR)

.

At the same time, union leaders told the

AP

that they had agreed to a package of concessions needed to keep the airline out of bankruptcy.

After accepting Carty's resignation, the AMR board announced it was elevating company President and COO Gerard Arpey to the top spot. Board member Ed Brennan would take over as chairman, according to the company.

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A union official said negotiators had agreed to a deal that brought some added cash to employees and shortened the period of wage concessions to five years from six, according to the

AP

.

Union negotiators for pilots and maintenance workers said their boards had approved the new deal. The flight attendants union and the AMR board must do likewise.

The airline, which announced a $1.06 billion

loss Wednesday, is seeking to avoid Chapter 11 bankruptcy by paring $1.6 billion in annual labor costs.

Outraged employees had approved 25% pay cuts when it was learned that top management had plans to protect its pensions and bonuses in the event of a bankruptcy filing.

AMR board member David Boren, president of the University of Oklahoma, told a local newspaper that he planned to ask for Carty's resignation, saying the CEO had lost credibility and trust.

In a statement released by AMR, Carty acknowledged the issue, saying the new chair and CEO would move toward "a new culture of collaboration, cooperation and trust."