American Airlines may land in bankruptcy court DALLAS (Reuters) =97 American Airline's slogan, "Something special in the=20 air" could take on a new meaning this week as the world's largest carrier=20 could very well be flying under bankruptcy protection. Banking sources=20 close to the matter told Reuters that American has ramped up discussions=20 for $1.5 billion in debtor-in-possession financing and could file for=20 bankruptcy protection as early as Monday. Unions at American were=20 scrambling over the weekend to reach concession deals with the carrier on=20 the grounds that they were better off reaching agreements on pay and=20 benefit cuts through talks with the airline rather than letting a=20 bankruptcy judge possibly slash or revoke current contracts. American, the= =20 world's largest carrier, was struggling prior to the Sept. 11, 2001 attacks= =20 on the United States. A difficult situation turned into a financial crises= =20 after the attacks, due to the sharp drop in air travel. Although it has=20 tried to cuts costs, banking sources have said the carrier, a division of=20 AMR, cannot easily recover from a drop in air travel bookings brought about= =20 by the war in Iraq. If it does file for bankruptcy, it will be the largest= =20 carrier ever to seek Chapter 11 protection and the first major U.S.=20 corporate casualty of the war in Iraq. A Chapter 11 bankruptcy filing=20 allows a company to continuing operating while it reorganizes its finances.= =20 AMR, based in Fort Worth, Texas, posted an industry record $3.5 billion=20 loss in 2002, nearly a third of the more than $11 billion in losses posted= =20 by the top eight U.S. carriers. Since the Sept. 11 attacks, rivals United's= =20 UAL Corp. and US Airways have filed for bankruptcy. Discussions among the=20 bank groups with AMR were continuing over the weekend, the sources said,=20 including debates on where the potentially huge Chapter 11 filing would=20 take place: in New York or Texas. PILOTS PRESENT CONCESSION PLAN On Sunday, the Allied Pilots Association, which represents about 13,500=20 pilots at American, said it had presented the airline with a deal that met= =20 the $660 million in concessions the carrier was seeking from the group. The= =20 union has said it intends to have a deal by Monday that will be put to a=20 vote by APA leadership. The APA said the concessions would mostly come=20 through proposed work-rule changes and across-the-board pay rate=20 reductions. An American spokesman said the company is in the process of=20 reviewing the proposal and its calculations. Union officials and the=20 carrier have not said if any deals would be binding under bankruptcy=20 protection. However, American may be following the example of bankrupt=20 carrier US Airways, which struck labor deals with its unions before heading= =20 to court to seek Chapter 11 protection. "We would hope, that as much as=20 possible, that any consensual agreement reached out of bankruptcy would=20 remain if we were ever forced into that situation. But there can be no=20 guarantees," said airline spokesman Bruce Hicks. He added that bankruptcy=20 presents new strains on the cost structure for any company and said it was= =20 in the best interest of employees to reach consensual agreements to help=20 avoid Chapter 11. AMR has said it needs to cut structural costs by about $4= =20 billion a year to avoid bankruptcy. It is in talks with all three of its=20 major unions over its call for $1.8 billion in annual wage concessions from= =20 employees. American is losing about $5 million a day currently and analysts= =20 have said the sooner American files for bankruptcy, the more cash it will=20 have on hand. That should make restructuring less painful than if it waited= =20 longer to file for protection. LABOR GROUPS TALKS DEALS On the labor front, the airline has reached tentative agreements on=20 concessions with seven of the eight work groups represented by the=20 Transport Workers Union. The TWU, which represents some 34,500 mechanics=20 and ground personnel, is one of the three major unions at American, which=20 has about 100,000 employees. The largest remaining TWU group without a deal= =20 is the group of 16,200 mechanics. A top TWU official said that if unions do= =20 not reach deals now, the carrier could ask employees for at least $500=20 million more in concessions under Chapter 11. "One consideration driving=20 our discussions is the simple fact confirmed in our (talks) with the=20 company officials that American's potential debtor-in-possession finances=20 will demand at least half a billion (dollars) more in employee concessions= =20 if the company files for bankruptcy," Jim Little, director of the TWU's Air= =20 Transport Division, wrote on the union's Web site. "It was also made clear= =20 that without such loans the company could not operate," he said. The union= =20 representing 26,000 flight attendants at American said Friday it presented= =20 the carrier with a concession deal that will meet the airline's goal of=20 achieving $340 million in cuts it is seeking from the group. American said= =20 it was looking over the proposal's numbers. A spokesman for the Association= =20 of Professional Flight Attendants said the union hoped to have an agreement= =20 in short time. *************************************************** The owner of Roger's Trinbago Site/TnTisland.com Roj (Roger James) escape email mailto:ejames@xxxxxxxxx Trinbago site: www.tntisland.com Carib Brass Ctn site www.tntisland.com/caribbeanbrassconnection/ Steel Expressions www.mts.net/~ejames/se/ Site of the Week:http://www.ttsailing.org/ TnT Webdirectory: http://search.co.tt *********************************************************