=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SF Gate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2003/02/26/f= inancial0858EST0029.DTL ---------------------------------------------------------------------- Wednesday, February 26, 2003 (AP) Pilots union: AMR may be bankrupt as soon as May (02-26) 05:58 PST DALLAS (AP) -- 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, The Dallas Morning News reported Wednesday. 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 told the newspaper that the airline will not comment on specifics of the union's findings, but he said American's talks with its 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. The APA said it reached its findings after receiving full access to AMR's accounting books and discussing the matter thoroughly with AMR chief executive Don Carty and president Gerard Arpey. The union outlined its assessment in board meetings and discussions over the past few days, the newspaper reported. The union said it found that although American began the year with $2.7 billion in cash, $775 million of that is restricted, meaning it cannot be used to pay bills. That would leave $1.9 billion in ready cash, but American will be forced to refinance some debt this spring. The pilots said that move will cost $200 million, lowering the balance to $1.7 billion. The union said it believes that $1 billion is the minimum American needs to keep flying, the newspaper report said. =20 ---------------------------------------------------------------------- Copyright 2003 AP