American Airlines' pilots union match pitch for federal help

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02/28/2003 - Updated 09:12 AM ET
American Airlines' pilots union match pitch for federal help

FORT WORTH, Texas (AP) =97 The union representing American Airlines pilots=
=20
appealed Thursday for federal help with security and insurance costs to=20
help the carrier, which is losing millions of dollars a day. Leaders of the=
=20
Allied Pilots Association, which represents American's 13,500 pilots, said=
=20
Congress should give airlines immediate relief from security costs and=20
higher insurance premiums imposed after the 2001 terrorism attacks "The=20
grim projections for the airline industry are symptomatic of a larger=20
problem that the companies, workers and experts agree needs to be addressed=
=20
to keep the industry from collapsing," said John Darrah, the union=20
president. "But employees and companies can't do it alone." Darrah called=20
airline employees "the first casualties in the war on terrorism."=20
American's chairman and chief executive, Donald J. Carty, has also been=20
arguing in speeches and testimony before Congress for federal help. Carty=20
has said the airline industry will need government help to survive if there=
=20
is war against Iraq, which could lead to higher jet fuel prices and=20
increased fear of terrorism.

After the terrorism attacks, Congress approved $5 billion in grants to the=
=20
airlines. American began losing money in early 2001, as the economy slowed=
=20
and fewer business travelers bought full-fare tickets. American's losses=20
grew after the terrorism attacks of Sept. 11, 2001, and it lost $3.5=20
billion last year. American this month raised the specter of bankruptcy in=
=20
asking employees for $1.8 billion in annual wage and benefit concessions,=20
about one-third from pilots. This week, a pilots' union official caused a=20
stir when he estimated the carrier could be forced into bankruptcy by late=
=20
May, given current cash reserves and levels of spending. The union=20
disavowed the estimate, and a spokesman for the company called it=20
inaccurate. An analyst for J.P. Morgan said Thursday there was a 25 percent=
=20
chance that American's parent, Fort Worth-based AMR Corp., would have to=20
file for bankruptcy. The outcome will be largely driven by labor costs,=20
Jamie Baker said. Baker told clients that the $1.8 billion concession=20
package proposed by American would be a bitter pill for unions but that=20
upheaval at United Airlines and US Airways, which are both in bankruptcy=20
proceedings, would give American's unions incentive to accept pay cuts.=20
Northwest Airlines asked its pilots to take a 20 percent pay cut. United,=20
Delta and US Airways are also seeking to cut labor costs.



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