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Horton said American will focus in coming weeks on renegotiating debt and aircraft-lease deals. He said the company will ground some planes and shrink before it can grow again. According to a Wolfe Trahan & Co. analyst, AMR has cut passenger-carrying capacity for the next three months by 2.5 percent, nearly double the airline's own November forecast. Horton said American needed to get "competitive labor contracts" with unions
-- the company says its labor costs are higher than other airlines. The CEO also said that "opportunists" might try to buy American, sell it or break it up, but he advocated keeping the company together. Analysts have speculated that US Airways Group Inc. could try to buy American. J.P. Morgan analyst Jamie Baker estimated that AMR will use bankruptcy protection to shrink 10 percent and cut labor and pension costs by $500 million a year, less than the company is targeting. He said AMR will emerge financially "much improved," but not superior to bigger rivals United and Delta.
[Associated
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