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Crash adds to woes for American

American Airlines workers may have figured things couldn't get any worse for the nation's largest carrier.

The airline lost two jets on Sept. 11. One crashed into the World Trade Center, the other into the Pentagon. Caught in the financial vortex that followed, American began cutbacks that will cost 15,000 employees their jobs.

But the crash Monday of American Airlines Flight 587 into a Queens, N.Y., neighborhood will only make jittery travelers more nervous. And it could prolong a travel slump that has American and the rest of the airline industry in deep trouble.

"We're not going to lose American, but this is going to hurt," said Darryl Jenkins, head of the Aviation Institute at George Washington University. "This hurts the whole industry. It's the worst possible time for this to happen."

The best chance to control the damage, airline experts said, is if investigators quickly confirm that something other than a terrorist act caused the A300 jet to crash.

"If terrorism can be ruled out in the next 48 hours, it's likely the impact for American and everyone else will be relatively modest," said Jon Ash, managing director of Global Aviation Associates, airline consultants in Washington, D.C.

Like most airlines, American is suffering huge financial losses because the number of passengers flying plummeted after Sept. 11.

AMR Corp., the parent of American and TWA Airlines LLC, reported a net loss of $414-million for the three months ending Sept. 30, even after receiving $508-million after taxes from the federal airline bailout.

"Clearly, no company can sustain this magnitude of loss for very long," AMR chairman Donald J. Carty told employees in a recent letter.

But the company headquartered in Fort Worth, Texas, remains in a strong financial position compared to many of its debt-ridden rivals, airline experts said. AMR had $2.3-billion in cash on Sept. 30 and owned $8-billion in aircraft it could use as collateral for loans.

"They're in a much stronger financial position, along with Southwest Airlines, than any of the carriers out there," said Bill Oliver, vice president of the Boyd Group, aviation consultants in Evergreen, Colo.

Still, Oliver said, the crash clearly would shake the confidence of travelers and American employees. "What we've seen with American Airlines is unprecedented, the loss of three planes in such a short period of time," he said.

American faced some tough questions about its performance even before Sept. 11.

Last month, a federal air safety board found that fatigue-induced crew errors probably caused a crash in 1999, when an MD-82 skidded down a runway in Little Rock, Ark., and struck a light structure. The captain and 10 passengers were killed, and 110 of the remaining 134 people were injured.

But a review by Air Safety Week after the accident found American's record for fatal accidents was in the middle of the pack for 20 U.S. domestic carriers.

AMR shares fell $1.64, or 9 percent, closing at $16.49 Monday. Shares in United, Delta, Continental and Northwest also dropped as investors expected passenger traffic to fall off.

"Whether it's a terrorist act or some mechanical problem, it will be hard to get people comfortable to fly again," said John Waterman of Rittenhouse Financial Services in Radnor, Pa.

Other experts said passengers would return to the skies _ if the accident was not tied to terrorists.

"People are adopting a different mind-set post-Sept. 11," said Ash, the Washington consultant. "They recognize there's a threat, but they can't crawl in a hole. There's a higher tolerance for adversity."

American flight attendant Cheryl Mohn of Apollo Beach said there wasn't an empty seat on her flight last week from Boston to Miami, also on an A300.

Monday's tragedy churned all kinds of anxieties in her mind. If passengers abandoned the skies again, would that mean more layoffs? Is it possible that workers are so obsessed with security that their primary jobs are suffering?

"It makes you feel disturbed and disconnected," said Mohn. "How much more can our families take? But I know we'll come back. We're Americans."

_ Times researcher John Martin contributed to this report, which includes information from Bloomberg News. Steve Huettel can be reached at or (813) 226-3384.