NEW YORK, March 29: AMR Corp., parent of the world’s biggest carrier American Airlines, is fighting to avoid bankruptcy within days as the Iraq war hits traffic, analysts said on Friday.

“We think time has run out, primarily because of the Iraq war,” said a report by Buckingham Research Group.

“This pushes up the timing of a bankruptcy filing, which we had initially thought would come in June or July if no labour concessions were granted,” it said.

“As it appears as though time is running out, we expect that AMR will file for Chapter 11 (bankruptcy) as early as Sunday,” it said.

Shares in AMR slumped 21 cents, 11.73 per cent, to $1.58, completing a 33.6-per cent slide so far this week. The stock has crumbled 93.9 per cent from its year-ago price of $25.70.

Other analysts held out hope for AMR, however.

“We think next week has the potential to be a make or break week for AMR,” said a report by analysts from Salomon Smith Barney.

AMR was expected to conclude tentative agreements from pilots, flight attendants and mechanics for new contracts in line with AMR’s demand for $1.8 billion in permanent annual savings, it said.

The carrier was in feverish discussions with its debt holders and lessors of its planes and ground equipment to renegotiate payments, the analysts said.

“Should the carrier not succeed in achieving labour savings in the very near term along with relief from its debt holders, we think there is very significant possibility of the carrier filing (for bankruptcy),” it said.

Thursday, AMR said it was in talks “around the table, around the clock” with each of its unions.

American said it was asking all employees, including management, for a total of $1.8 billion in permanent, annual savings “to help save the company” and to allow it to compete effectively.

Fitch Ratings said the start of the Iraqi war had compounded pressure on American Airlines to reach a deal with its unions on cutting costs and liberalizing rules to compete with budget carriers.—AFP