American, Airbus Reach Agreement 

To Pay Damage Claims From Crash

     By ANDY PASZTOR
     Staff Reporter of THE WALL STREET JOURNAL

     American Airlines and Airbus, temporarily setting aside a dispute over why
     an A300 jetliner's tail ripped off above New York City 18 months ago, have
     agreed jointly to pay for damage claims stemming from the accident that
     killed 265 people.

     The filing earlier this week in federal district court in New York, which
     surprised some of the law firms representing survivors of the victims,
     means lawyers for the families expect to be largely restricted from
     delving into detailed reasons for the November 2001 crash.

     The legal focus instead has shifted to determining the extent of damages,
     which the carrier and jet maker told the court they initially agreed to
     split between them. But down the road, the companies and their insurance
     carriers have reserved the right to battle it out to determine liability.
     By opting to delay any legal battles between themselves, the companies
     hope to create a united front against the plaintiffs and reduce the size
     of damage awards. Clay McConnell, chief spokesman for Airbus in the U.S.,
     said the companies worked out a 50-50 funding agreement, but they will
     more precisely "determine the burden" each will share once certain claims
     by the plaintiffs are resolved. John Hotard, a spokesman for AMR Corp.'s
     American Airlines unit, said he wasn't aware of the latest filings.

     The crash of American Flight 587 shortly after takeoff from John F.
     Kennedy International Airport has raised questions about pilot training,
     design and maintenance of composite parts and how much average commercial
     pilots knew about the dangers of rapidly moving a plane's rudder from side
     to side.

     During adversarial public hearings before the National Transportation
     Safety Board in October, representatives of American and Airbus clashed
     over the most important factors that led to the crash.    

     Write to Andy Pasztor at andy.pasztor@wsj.com
     Updated June 6, 2003