American Airlines Details Plans to Scale Back : Aviation: The carrier says some hubs may be closed and it may quit some markets, but it denies reports of a massive restructuring.

As part of its efforts to cut costs, American Airlines may close some airport hubs, withdraw from poorly performing markets and sell parts of the company, the nation’s largest airline said in an employee newsletter.

But American on Wednesday downplayed subsequent published reports that it is on the verge of a massive restructuring that would knock it down to the No. 3 spot behind United and Delta.

American spokesman Marty Heires called the reports “much ado about nothing.”

An article in Flagship News, a bimonthly employee newspaper, outlined potential cost-cutting measures similar to those Chairman Robert Crandall discussed with securities analysts in New York two months ago.

Earlier this year, American said it would lay off nearly 1,000 employees as part of a plan to reduce costs by about $300 million next year.

Heires said American officials wanted to let employees know the company’s options. But some industry analysts said Crandall was preparing employees for the worst.

“He’s just softening up the troops for what’s coming,” said Michael Boyd, president of Aviation Systems Research, a Denver-based consulting firm. “This is a company that is quite concerned, if not in sheer panic.”

American’s message is also aimed at putting its unions on notice about the airline’s serious intentions to cut back costs, said Andrew Nocella, an analyst at Avmark, a Washington-based aviation consulting firm.

American was among the most aggressive carriers during the 1980s, expanding its east-west route structure while adding north-south services along both coasts. It also developed the most sophisticated and profitable reservations systems and led the industry with the introduction of a frequent flier program.

But American’s attempt to develop its north-south routes through hubs in San Jose, Calif., and Raleigh-Durham, N.C., have failed to live up to expectations, analysts said. Those two hubs might be top candidates for closure should the airline decide to dramatically reduce operations, Nocella said.

“In the mid-1980s, American decided it wanted to be all things to all people,” Nocella said. “That strategy is not working.”

American and other full-service carriers are caught in the same dilemma: Passengers want low fares but do not want to sacrifice all the costly services to which they’re accustomed.

In a recent discussion with Crandall, travel business executive Thomas Nulty said American’s chairman complained that operating costs were too high while passengers were reluctant to pay for all the services the airline provides.

Crandall told Flagship News that “if we want to be in this business for the long term--and we all do--we must find a way to make a profit at the low fares people want to pay.”

Bloomberg Business News contributed to this story.