Bankruptcy still close, says airline's parent

FORT WORTH, Texas (AP) -- American Airlines may still have to file for bankruptcy protection from its creditors despite winning concessions from its unions and suppliers, the carrier's parent company warned in a government filing.
American parent AMR Corp. may have to file under Chapter 11 of the bankruptcy laws "because its financial condition will remain weak and its prospects uncertain," the company said in the Securities and Exchange Commission filing Thursday.
The world's largest carrier recently dodged bankruptcy by securing a series of cost-cutting measures aimed at netting $4 billion in annual savings.
Fort Worth-based American Airlines announced Thursday it would issue stock to suppliers and other creditors in exchange for agreements that will save the company $175 million a year. Last month, employees agreed to $1.8 billion in annual labor concessions.
But those cuts may not be enough to keep the company out of bankruptcy court.
The weak U.S. economy, lingering effects of the war in Iraq and fear of more terrorist attacks either have or may hurt the ailing carrier, the filing said.
Also cited were the spread of severe acute respiratory syndrome, the company's "inability ... to satisfy the liquidity requirements or other covenants in certain of its credit arrangements" and its "inability ... to access the capital markets for additional financing."