AMR Three Days From Bankruptcy

March 28, 2003
By PAUL THARP

American Airlines, the world's largest, is beginning a three-day countdown to file for bankruptcy over the collapse of the travel industry.

Sources say that unless the carrier wins $4 billion in pay cuts this weekend from its workforce, it will land in bankruptcy court as early as next week.

It would be the fourth airline to take refuge in bankruptcy court from the global slump in travel, which is costing the airlines more than $10 billion in losses this year alone.

Industry sources say American's bookings have been "terrible" since the Iraqi war started - and the federal government doesn't have any immediate plans to bail out the industry, as it did after the Sept. 11 terrorist attacks.

Plans already are under way for American to borrow $1.5 billion in emergency cash to keep operating while it goes into bankruptcy protection to reorganize its $27 billion in debt. "It's a liquidity imperative to file as soon as possible," said one industry insider familiar with the talks.

The world's second-largest carrier, United, is already in bankruptcy, along with US Airways and Hawaiian Airlines. American's bankruptcy talk sent shares of its parent, AMR, plunging 18 to $1.79, down 40 cents.

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