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The Honolulu Advertiser
Posted on: Wednesday, December 12, 2001

Red ink rising, airline tells workers

Associated Press

FORT WORTH, Texas — American Airlines chairman Donald J. Carty is warning employees that the world's largest carrier is still losing millions every day and struggling to make travelers feel comfortable about flying.

Carty said the airline would record a "very, very big" loss in the fourth quarter and the full year.

But he tempered his comments by saying there are "some encouraging signs," including that passenger bookings have increased through December into early January.

Carty made the comments in weekend messages on American's Web site and its telephone hot line for 115,000 employees.

American, a unit of Fort Worth-based AMR Corp., has already lost $964 million in the first nine months of the year. Analysts expect AMR to post a record loss of up to $1.75 billion in the fourth quarter.

American's business fell off sharply after the Sept. 11 terrorist attacks late in the third quarter. Two of American's jets were hijacked and crashed.

American's planes flew on average about one-third full immediately after the attacks, and the airline cut 20 percent of its flights. With the reduced schedule, the airline projects occupancy percentages in the mid-80s during Christmas week and the high 60s in early January, Carty said.

"We're still losing millions of dollars every day because, as you know, we have pulled a lot of flying out of our schedule and we're still selling seats at incredibly low prices," Carty said. "And we're doing that just to get folks back in the air again and comfortable with flying."

Carty acknowledged that employees are dealing with extra work, fewer flight assignments and reduced or eliminated overtime. At the same time, the company is negotiating a new contract with its pilots, who hope to get raises equal to those of counterparts at Delta and United airlines.

AMR, which owns the American Eagle commuter line, has announced 20,000 layoffs.

The parent company last week folded TWA into American, and unions are fighting over where TWA employees fit on American's seniority list — seniority affects which employees get the best assignments and who gets laid off first.

On the Web
www.amrcorp.com