This article from NYTimes.com has been sent to you by psa188@juno.com. American Asks Unions for $1.8 Billion in Cuts February 5, 2003 By REUTERS CHICAGO, Feb. 4 - American Airlines asked its unions and other workers today for $1.8 billion in annual cost cuts, in what it called a last resort to turn the airline around. The president of the airline, Gerard J. Arpey, said that the unions were aware of the magnitude of the financial problems and that, while the airline's liquidity was good, the talks "can't take forever." American's parent company, the AMR Corporation, recently reported a net loss of $3.5 billion in 2002, the worst shortfall in aviation history. Mr. Arpey, at the company's headquarters in Fort Worth, declined to name any date that a bankruptcy filing would become inevitable if the talks had not achieved results by then. He also declined to comment on a bankruptcy process, and said meetings with the unions were expected to go on continuously. American said in a news release that the cuts would come from wages, benefits and work rules. American proposed $660 million a year in concessions from pilots, $340 million from flight attendants, $620 million from employees represented by the Transport Workers Union, and $80 million from ticket agents and representatives. Management and related staff would give up $100 million, on top of more than $200 million in annual management-related cuts the airline says it has secured to date. American said it had evaluated labor costs at some competitors to help determine how much it would ask from each group. United Airlines and US Airways Group have both asked for hefty concessions from workers. US Airways said Monday that it had secured $1.9 billion in overall annual savings. United's five labor unions have agreed to temporary pay cuts to help the airline reorganize and meet its financing agreements. American said it would also cut costs by closing 2 of 10 domestic reservations offices, affecting about 910 jobs in Norfolk, Va., and Las Vegas. The pilots' union at American, the Allied Pilots Association, said today that it was committed to helping the airline but was reserving judgment on the cost-cutting initiative. "What we have to do in the next few days is get a better understanding of how the numbers were arrived at," a union spokesman, Gregg Overman, said. The Association of Professional Flight Attendants said on its Web site that it wanted management to substantiate the need for cost savings and that meetings were set for Friday to explain how the $1.8 billion figure was reached. American has already identified $2 billion in annual savings. But the airline said today that it needed to cut expenses by twice that amount to keep its business afloat as competition from low-cost carriers reduces profits and market share. The risk that American will soon follow United Airlines, a division of the UAL Corporation, and US Airways into bankruptcy proceedings has risen considerably, analysts have said, as American burns through $5 million a day. Shares of AMR fell 8 cents, to $2.87. http://www.nytimes.com/2003/02/05/business/05AIR.html?ex=1045540269&ei=1&en=effbf02c3451e7bf HOW TO ADVERTISE --------------------------------- For information on advertising in e-mail newsletters or other creative advertising opportunities with The New York Times on the Web, please contact onlinesales@nytimes.com or visit our online media kit at http://www.nytimes.com/adinfo For general information about NYTimes.com, write to help@nytimes.com. Copyright 2002 The New York Times Company