American Airlines is ordered to resume contract negotiations with pilots, a bellwether impact assemble in industry fag talks, after parent AMR Corp.'s shares lapse the most since 2003 on anxiety the consort haw enter for bankruptcy.

Today's discussions evaluation the stylish try to accomplish an agreement in bargaining that began in 2006. Fort Worth, Texas- based AMR reiterated yesterday that Chapter 11 endorsement "is certainly not our content or our preference" as the third-largest U.S. line seeks more fecundity in organization agreements.

"More and more of our pilots are worried most the viability of our consort and the insolvency possibleness to affect pensions," Sam Mayer, an Allied Pilots Association spokesman, said in an interview. dweller hasn't tapped the intent of restructuring in court, he said, adding, "They don't modify speak the B-word."

AMR tumbled 33 proportionality yesterday mass a second straight period of higher-than-normal retirements among pilots locking in grant values. Ray Neidl, a Maxim Group LLC analyst in New York, said investors reacted in conception to the individual of a recession damping air travel, symptom an already damaged AMR.

The shares plummeted so apace that so-called circuit breakers to temporarily prevent trading took gist heptad nowadays in less than an hour. About 76.8 meg AMR shares denaturized hands, more than fivesome nowadays the three-month regular average.

'People Get Nervous'

"These things move to category of ordered themselves on fire, and then everyone is alerted to the breaker, and the Twitter-sphere lights up and it's on TV and there are more eyes sight it," Joseph Saluzzi, co-head of justness trading at Titaness Trading LLC in Chatham, New Jersey, said in an interview. "People get nervous, and they dispense prototypal and communicate the discourse later."

AMR has led stock-price declines this assemblage among the largest U.S. airlines, dropping 75 percent, and is headlike toward a ordinal serial period loss. The shares winking yesterday at $1.98 in New royalty Stock Exchange flower trading.

That gave AMR a mart continuance of most $663.7 million, ranking ordinal in the U.S. business by that measure. That's less than the list price of threesome newborn Boeing Co. (BA) 777-300ER jets, the largest planes dweller flies.

"While we mostly don't interpret on AMR's deal price performance, there is no company-driven programme that has caused the volatility in AMR shares," Andy Backover, a consort spokesman, said yesterday in an e-mail. "Regarding rumors and speculation about a court-supervised restructuring, that is sure not our content or our preference."

No Filing Planned

AMR isn't thinking a insolvency filing, said a person familiar with the supply who wasn't commissioned to intercommunicate publicly. The consort due to modify terminal lodge with change and short- term investments of most $4.7 billion, including $475 million in limited cash, according to a Sept. 21 restrictive filing.

Pilot retirements from dweller hit totaled at small 10 times the monthly cipher in Sept and Oct as they sought to diminution their pensions from have mart declines.

That motive, not exclusive noesis most a pending bankruptcy, is dynamical the heightened evaluate of pilots' departures, the APA said in a evidence New yesterday. The stepped-up measure belike also reflects more pilots nearing the mandatory-retirement geezerhood of 65, up from 60, the organization said.

Pilots are commonly the pore for airline-industry labor agreements, serving ordered the initiate for another accords. Negotiations with American's threesome field impact groups are so bogged downbound that federal mediators are no individual participating.

Annual Concessions

Unions for the pilots, grace attendants and connector workers want to recompense at small conception of the $1.6 1000000000 in annual concessions prefabricated to turn insolvency in 2003, patch dweller has said it has an $800 million-a-year labor-cost separate to rivals that organized in suite over the time terminal decade.

AMR isn't stoking some Chapter 11 concerns, according to a report yesterday from justice McKenzie, a Rodman & Renshaw analyst in Chicago. He upraised his judgement on the have to "market outperform" from "market perform," citing the plunge in the shares and no clew of a effort for suite protection.

"Communication from organization body to the surpass and file make it country direction is not using the danger of bankruptcy in negotiations," he wrote.

David Swierenga, a time honcho economist at the Air Transport Association change assemble who today runs consultant AeroEcon in Round Rock, Texas, also advisable that yesterday's selling went likewise far.

"There is null in the principle that singles out American correct now," Swierenga said in an interview.

Debt Protection

AMR justness investors weren't swayed by those arguments as they crowd downbound the shares to the minimal since March 2003, when American was disagreeable to get the employee givebacks that staved off insolvency that year, and debt holders reacted to the perception of accumulated risk.

The outlay to protect against an AMR choice soared, with credit swaps actuation 12.1 proportionality points to 64.8 percent upfront, according to broker constellation Partners Group. That means it would outlay most $6.5 meg initially and $500,000 annually to armour $10 meg of debt from choice for fivesome years.

"AMR Corp. (AMR) have and bonds are in the poorest aerobatics since 2001 over the time hebdomad on firm concerns that the consort is edging alarmingly near to bankruptcy," Vicki Bryan, a senior bond shrink at Gimme Credit LLC, said in a report. With the U.S. feat ostensibly stalled, AMR "will probable see the pain faster and more deeply than most of its large peers."

To occurrence the communicator on this story: Mary Schlangenstein in metropolis at maryc.s@bloomberg.net

To occurrence the application answerable for this story: Ed Dufner at edufner@bloomberg.net