Many keep flying American despite bankruptcy fears

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03/17/2003 - Updated 10:01 AM ET
Many keep flying American despite bankruptcy fears

FORT WORTH, Texas (AP) =97 Gospel singer Beverly Crawford is in the air=
 three=20
or four times a week, traveling to perform in California, New York and just=
=20
about everywhere in between. She and her husband, Todd, prefer American=20
Airlines because they can fly directly to most of the concert cities, and=20
they like the expanded leg room and perks that go with being frequent=20
flyers. But they plan to change airlines if American goes bankrupt. "That's=
=20
the scary thing =97 you don't know," Todd Crawford, his wife's manager, said=
=20
this weekend at the Dallas-Fort Worth International Airport. "They might=20
not offer the same routes or as many flights, or prices may go up. It would=
=20
be a bad situation." Other travelers expressed similar concerns about=20
American, which is losing $5 million a day.

Donald J. Carty, American's chairman and chief executive, has stressed that=
=20
the company's focus remains on avoiding bankruptcy. "We still have the=20
opportunity to fix our structural problems and make ourselves into a=20
formidable competitor," Carty said in a recorded hot line message to=20
employees late last week. The world's largest airline is already=20
negotiating with pilots and is to start official meetings Monday with=20
flight attendants and ground workers. The airline has proposed $660 million=
=20
in concessions from the Allied Pilots Association, $620 million from the=20
Transport Workers Union and $340 million from the Association of=20
Professional Flight Attendants. Those proposals are part of American's plan=
=20
to slash annual costs by $4 billion. The new bargaining talks signal hope=20
for American, which traditionally has had a strained relationship with its=
=20
five unions, including two for American Eagle. "At this point, it's a whole=
=20
new game. The survival of the carrier is at stake," said George Price, the=
=20
flight attendants union spokesman.

The Dallas Morning News reported in its Saturday editions that officials at=
=20
Fort Worth-based AMR Corp., the airline's parent company, hired well-known=
=20
bankruptcy attorney Harvey Miller. AMR declined to comment. Miller has been=
=20
involved in the nation's biggest Chapter 11 cases since the late 1970s,=20
including Continental Airlines, Texaco, Bethlehem Steel and Braniff=20
International. Miller formerly worked at the New York law firm of Weil,=20
Gotshal & Manges. He now is a managing director at the investment banking=20
firm Greenhill & Co. "Everybody in the bankruptcy bar knows Harvey," David=
=20
W. Dykhouse, an attorney with the New York firm Patterson, Belknap, Webb &=
=20
Tyler, told The Associated Press. "He was perhaps the most pre-eminent=20
bankruptcy lawyer for several decades." Miller worked with American two=20
years ago as it tried to acquire Trans World Airlines. The lawyer and his=20
associates advised TWA to go into bankruptcy, which made it a more=20
attractive purchase by freeing any buyer from its contract=20
liabilities.  The hiring of Miller signals that American is seriously=20
considering filing Chapter 11 as an option, said Anthony Sabino, associate=
=20
law professor at St. John's University. "It would be a last act of=20
desperation," Sabino told The AP. "If there is an airline out there that=20
can avoid bankruptcy, I think American is well-suited."





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