Another airline may put up its tray tables

The board of American Airlines holds a meeting Thursday that will determine whether a fourth major US carrier is forced into bankruptcy - cementing this as the aviation industry's worst era ever.

It's a move the airline narrowly averted last week, after unions at the world's largest carrier approved $1.8 billion in wage concessions to help the company avoid Chapter 11. But in a major miscalculation, management had delayed the disclosure that it set aside millions in special bonuses and protected pension benefits for itself.

Feeling betrayed, the enraged unions are now balking at the give backs. The result is Thursday's high-stakes meeting that will help set the tone for the future of the domestic airline industry.

Even if American doesn't file for Chapter 11, its employees will have to make concessions - whether by choice or by the decree of a bankruptcy panel. That, in itself, marks a watershed for the airline industry. In past economic downturns, labor was able to negotiate stakes in a company or delayed salary and benefit increases to keep workers content. Now, American's employees are faced with making long-term concessions - or losing their jobs.

While this choice is most striking in the airline industry, labor experts say workers across the country, from the steel industry to municipal government, are facing similar alternatives. "When the economy is slow, labor has to make concessions - but it's far worse now," says Neil Bernstein, a labor-law professor at Washington University in St. Louis. "The kinds of concessions being made are the largest I've ever seen, and I've been in this business since the 1960s."

Workers in the airline industry are facing some of the starkest choices: The economic downturn, fear of terrorism, war in Iraq, and the threat of SARS have forced unprecedented changes in an industry long known for its boom and bust cycles. Before USAirways emerged from bankruptcy last month, its workers agreed to cut wages and benefits by 30 percent. United's employees have agreed to givebacks of 20 percent. And management at Delta, Continental, and Northwest are also looking for big savings from labor, which typically makes up about half an airline's expenses.

"It really does feel like it's open season on workers," says Patricia Friend, international president of the Association of Flight Attendants, which represents United's flight attendants. "The company made it clear to us that they'd use the hammer of the bankruptcy court to get what they wanted, so it was like having a gun to your head."

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