Airline stocks rebound as investors eye quick war

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Airline stocks rebound as investors eye quick war
By Dan Reed, USA TODAY

FORT WORTH =97 Airline stocks rebounded sharply Monday as investors, airline=
=20
executives and employees waited to see how travelers will respond to signs=
=20
of an imminent war with Iraq. Investors seemed to be betting that a quick=20
war could help the battered industry by eliminating uncertainty and=20
pessimism about airlines' financial prospects. Stocks of AMR, American=20
Airlines' parent, and Delta, closed up 7.9% and 6.7%, respectively. The=20
chief executives of both United and British Airways have said publicly that=
=20
war could force them to scale back operations 10% to 20%. Other carriers=20
have been less specific, saying they'll make any cutback decisions after=20
they see how consumers respond. One possibility: doing nothing. Spokesmen=20
for several carriers said planes have been full as of late and are expected=
=20
to remain that way for a month because of strong spring break and=20
Easter/Passover holiday demand and many deeply discounted fares.

Meanwhile, negotiations intensified Monday between American Airlines and=20
its three unions for $1.8 billion a year in concessions that management=20
says it needs to avoid bankruptcy reorganization. American officials hope=20
to reach tentative deals with all three groups by the end of March. United,=
=20
in Chapter 11 bankruptcy protection since December, asked the bankruptcy=20
court to abrogate its labor deals so it can achieve the cost savings=20
demanded by its bankruptcy lenders. The motion will be heard sometime in=20
April. A decision is not expected for 60 days. But negotiations toward=20
voluntary concessions will continue. One possible source of help for the=20
beleaguered airlines could be Congress. Rep James Oberstar, D.-Minn., is=20
expected to introduce a bill Wednesday that could reduce or eliminate=20
airport security fees and taxes, provide retraining and placement services=
=20
for displaced workers, and possibly reopen the $10 billion loan guarantee=20
program for airlines enacted after the Sept. 11 terrorist attacks.

Contributing: Marilyn Adams and Barbara De Lollis

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