American Airlines turnaround in jeopardy

FORT WORTH, Texas, April 28 (UPI) -- American Airlines' turnaround, propped up by union concessions in 2003, is running out of steam, industry observers said Monday.

The airline's parent, AMR Corp., could have to declare bankruptcy sometime in 2009, the Fort Worth Star-Telegram reported.

Union officials said the airline's second brush with financial insolvency will not likely be met with the same willingness to accept concessions as the first time around.

In 2003, unions agreed to $1.6 billion in annual concessions, which kept the airline afloat after Gerard Arpey, then president and chief operating officer, told them the company was two weeks away from bankruptcy court.

The day after agreeing to the concessions, newspapers announced the company had a $25 million pension plan for top executives that was legally safe from bankruptcy proceedings.

"We felt like we had been duped," Jim Little, the Transport Workers Union's international president, told the Star-Telegram.

Should things get worse for the airline, under regulatory and fuel-cost pressures, "the employees aren't going to go back and gut the contract again," Little said. "That was a one-time deal."