Pilots Warn of American Bankruptcy
The Associated Press
AMR Corp., parent company of American and American Eagle airlines, could be forced into bankruptcy as soon as May, its pilots'' union warned.
An analysis of AMR''s finances by the Allied Pilots Association found the Fort Worth-based company has just three months'' worth of cash reserves.
American Airlines pleaded with employees earlier this month to accept steep cuts in wages and benefits to save $1.8 billion annually. The pilots'' analysis concluded that might not be enough.
Realize that the $1.8 (billion) is a minimum figure, a posting on the union''s Web site says. There is no guarantee that AMR won''t ask for more. AMR states the alternative is bankruptcy.
American spokesman Bruce Hicks said the airline would not comment on specifics of the union''s findings, but said talks with unions were productive.
They understand the sense of urgency that we need, he said.
Most major airlines have struggled financially since the Sept. 11 terror attacks and two - United Airlines and US Airways - have sought bankruptcy protection.
AMR chief financial officer Jeff Campbell said in January that American was losing about $5 million a day and would continue to do so during the winter, the weakest part of the travel season. Based on that, the pilots calculate American would need to file for bankruptcy May 25.
The union said it hopes to take only two months to reach a contract, present it to members and obtain approval. If talks take much longer, the union said, American''s chances of filing for bankruptcy are 100 percent.
American''s flight attendants and ground workers have contracts in place that make them among the best paid in the industry. Contracts for the Association of Professional Flight Attendants and the Transport Workers Union are up for revision in 2004.
The Transport Workers Union began intensive contract discussions this week. The flight attendants'' union said they would also begin discussions if the situation becomes urgent.
Last modified: February 26. 2003 6:55AM
The Associated Press
AMR Corp., parent company of American and American Eagle airlines, could be forced into bankruptcy as soon as May, its pilots'' union warned.
An analysis of AMR''s finances by the Allied Pilots Association found the Fort Worth-based company has just three months'' worth of cash reserves.
American Airlines pleaded with employees earlier this month to accept steep cuts in wages and benefits to save $1.8 billion annually. The pilots'' analysis concluded that might not be enough.
Realize that the $1.8 (billion) is a minimum figure, a posting on the union''s Web site says. There is no guarantee that AMR won''t ask for more. AMR states the alternative is bankruptcy.
American spokesman Bruce Hicks said the airline would not comment on specifics of the union''s findings, but said talks with unions were productive.
They understand the sense of urgency that we need, he said.
Most major airlines have struggled financially since the Sept. 11 terror attacks and two - United Airlines and US Airways - have sought bankruptcy protection.
AMR chief financial officer Jeff Campbell said in January that American was losing about $5 million a day and would continue to do so during the winter, the weakest part of the travel season. Based on that, the pilots calculate American would need to file for bankruptcy May 25.
The union said it hopes to take only two months to reach a contract, present it to members and obtain approval. If talks take much longer, the union said, American''s chances of filing for bankruptcy are 100 percent.
American''s flight attendants and ground workers have contracts in place that make them among the best paid in the industry. Contracts for the Association of Professional Flight Attendants and the Transport Workers Union are up for revision in 2004.
The Transport Workers Union began intensive contract discussions this week. The flight attendants'' union said they would also begin discussions if the situation becomes urgent.
Last modified: February 26. 2003 6:55AM
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