By The Associated Press
DALLAS — Shares of American Airlines' parent fell 12 percent yesterday as investors weighed the possibility that the world's largest carrier could file for bankruptcy protection as early as next week.
News that American reached the first labor-concessions agreement with one of its unions did little to stop the slide in confidence in the carrier, as the war in Iraq and a hitch in talks with pilots took their toll.
Shares of Fort Worth-based American fell 21 cents to close at $1.58. The stock has lost 94 percent of its value in the past year.
American is negotiating with lenders to secure $1.5 billion in financing to be used in the event of a bankruptcy filing, which could happen as early as next week, a source familiar with American's situation said yesterday.
Executives at American have said the carrier would be forced into Chapter 11 if it could not get $1.8 billion in concessions from its various labor groups.
Union and company officials say progress is being made, but deals have still not been reached with pilots, flight attendants or mechanics — the three main worker groups.
"There has been rampant speculation on this issue for many weeks, with dates (for a bankruptcy filing) ranging from mid-March to the end of the year," said American spokeswoman Tara Baten. "Right now our plan and focus is to do everything possible to avoid bankruptcy."
The Association of Professional Flight Attendants said yesterday it had given American a proposal that would meet the company's demand for $340 million in annual cost cuts. Union president John Ward said the group was committed to helping the company deal with its financial situation.
American said it was reviewing the union's proposal.
Three U.S. carriers — United Airlines, US Airways and Hawaiian Airlines — have filed for bankruptcy in the past year. American and other airlines are lobbying Washington for relief from taxes and other costs, which they say they need to avoid more airline bankruptcies.
American has lost nearly $5.3 billion in the past two years. It is meeting daily with unions representing pilots, mechanics and flight attendants over cost cuts.
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