Airline borrowing money to make payroll, CEO says

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Airline borrowing money to make payroll, CEO says

DALLAS (AP) =97 American Airlines, which is borrowing money to make payroll,=
=20
needs to cut additional costs and is turning to labor unions, the carrier's=
=20
chief executive says. With American losing several million dollars a day,=20
CEO Donald Carty says managers need faster cooperation from unions=20
representing airline employees to get out of the cash crunch. The world's=20
largest carrier, which says it has already cut $2 billion a year in=20
structural costs, wants to extract another $2 billion in labor-related=20
savings to reach its $4 billion annual goal. Fort Worth-based American last=
=20
August announced 7,000 layoffs and the mothballing of jets. In December,=20
the airline announced it limit flight attendant layoffs to 400 by allowing=
=20
almost 500 workers to take unpaid leave and letting others share jobs in an=
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agreement reached with a union. The airline's Securities and Exchange=20
Commission filings show it has $2.8 billion in cash and liquid assets.=20
Analysts say parent AMR is in no immediate danger of bankruptcy. Carty has=
=20
said American doesn't plan to go down the road of United, the world's=20
second-biggest airline, which has filed for Chapter 11 bankruptcy=
 protection.

Instead, American wants to make work rules more favorable for managers and=
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rewrite language in labor contracts. Consultants say pilot cooperation=20
remains essential for any restructuring to succeed. "Never ask for a small=
=20
giveback," industry consultant and academic Darryl Jenkins of the Aviation=
=20
Institute at George Washington University told The Dallas Morning News in=20
Tuesday's editions. "It's so difficult that if you're going to do it, you=20
might as well ask for a lot." The Allied Pilots Association, the most=20
powerful of the three major labor groups, has been in on-and-off contract=20
talks with American since last year. But two members of the union's=20
negotiating committee unexpectedly resigned last week. The APA board of=20
directors meets Tuesday to elect replacements to the negotiating committee.


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