Speculation that American Airlines, the largest carrier in the US may seek bankruptcy protection, was renewed today with news that parent company AMR is to be dropped from the Standard & Poors 500 index.
American`s share price has been plunging and, although the airline has refused to comment on its plans, the New York Times reported that the carrier is negotiating finance of up to USD$2 billion to enable it to operate under bankruptcy protection.
The financial crisis at American has been growing since the huge downturn in air travel following the terrorist attacks of September 11 and costs for security and insurance have soared.
The airline has called for major savings from its workers and today thousands of union members will conduct pickets in eight major cities (Boston, Chicago, Dallas-Fort Worth, Los Angeles, Miami, New York, San Francisco and Washington, DC) as part of their efforts to save the ailing carrier from bankruptcy and highlight the crisis facing the industry as a whole.
Transport Workers Union President Sonny Hall, who is taking part in the picket, said in a statement: “The situation at American Airlines is dire. But it is not unique. All of the men and women who work in the airline industry are under attack.
“Since September 11, air travel has decreased. The government has required airlines to add needed security measures - without providing any funds for these critical public safety improvements. Fuel and insurance costs have increased dramatically. These factors are crippling the industry and workers are being asked to bear the burden.
“We understand that we have a role to play in helping the airline get back on its feet. But we cannot shoulder this enormous task alone. Management needs to show it is prepared to shoulder some of the burden and Congress and the White House need to step up to the plate and provide relief for an industry critical to our nation`s economic future.”