American Recovering Rapidly From Strike : Airlines: The carrier says it will continue to downsize. Meanwhile, a slowdown by United's machinists poses possible holiday delays.


American Airlines on Tuesday quickly restored much of its operations as flight attendants returned to work after a five-day strike. But the carrier's labor and financial problems are far from over, American executives said.

Meanwhile, United Airlines said flights were operating normally in the face of a 2-week-old union policy that labor leaders say could disrupt service during the busy Thanksgiving holiday. Angered over the recent sale of United's unionized flight kitchens, the machinists union has asked members to strictly abide by work rules, which could slow down some operations, union officials said.

United, the nation's biggest carrier, expected no problems over the holidays, but it has plans to handle any delays related to the slowdown, spokesman John Kiker said.

The nation's airline system cannot bear much disruption today or on Sunday, when hundreds of thousands of holiday travelers jam airports.

In addition to the regular holiday crowds, many carriers have had to accommodate displaced American passengers who switched airlines during the flight attendants strike. American, the nation's second-largest carrier, had anticipated that only 40% of its flights would operate normally this week because it lacked sufficient numbers of qualified flight attendants.

But Tuesday, one day after President Clinton intervened to end the strike, Ft. Worth-based American was able to fly at least 76% of its approximately 2,500 daily flights with passengers on board. At Los Angeles International Airport, all of the nearly 50 departures were expected to leave with passengers as scheduled. Figures were unavailable for John Wayne Airport in Orange County, Burbank Airport and Ontario International Airport.

By today, 85% of American's flights are expected to operate normally, and the carrier plans to return to a full schedule Thursday.

American officials said there was plenty of room on flights for customers who had switched to other carriers.

"We have the space. We are back," said Michael A. Smith, head of American's passenger sales division in Los Angeles. "We'd love for people to contact us."

In fact, American's reservation lines were busy all day Tuesday with customers checking on seat availability. There were spaces aplenty in the morning on flights that had been deserted by strike-wary travelers, American officials and travel agents said.

"The pressure is off now," said Thomas A. Jackson, president of World Travel Bureau, an Orange County-based agency with 15 offices. "It's a euphoric situation. There's a great deal of sighing and relief around here."

Some passengers who had switched to other airlines during the strike now want to go back to their original plans to fly on American--but only with guaranteed flights, travel agents said. American's rival carriers say they will continue to take American tickets, if seats are available, through Nov. 30.

But most travel agents reported light business Tuesday. Several said that even before the strike was called off, they had managed to switch their customers to other carriers without having to resort to trains or buses. All customers of Seaside Travel in Long Beach, according to owner Ada Brown, were able to switch without having to pay higher fares for a different class of service.

"Even at these peak travel times, we were able to cover our clients with other carriers," Brown said.

American Airlines and the 21,000-member Assn. of Professional Flight Attendants also prepared for binding arbitration to resolve their dispute. The union and airline have clashed over changes in work rules, pay and concessions that American says are needed to ensure long-term profit and survival.

An arbitrator, who has not yet been selected, might take 60 days or more before delivering a settlement, airline and union officials said. If both groups fail to agree on an arbitrator, the selection falls to the National Mediation Board, which oversees transportation labor disputes.

Next year, American begins what are expected to be tough contract negotiations with pilots.

American executives said the airline will continue to shrink as it withdraws from routes where it cannot profitably compete with low-fare carriers. The results could be more furloughs and layoffs.

"Downsizing will have to continue until we achieve an airline that is capable of competing profitably," said Robert Baker, American's executive vice president of operations.

American officials said they remain open to employees buying a large stake in the company in return for concessions to reduce labor costs, a move other airlines have contemplated or adopted. Northwest Airlines, for example, sold a stake in the company last summer to employees in exchange for wage cuts and money-saving changes in work rules. United and its unions were also working on a similar deal, but the negotiations fell apart when the airline sold its flight kitchens.

On Wall Street, American's stock and those of other carriers fell. Some industry analysts said the airlines might be less aggressive in seeking cost savings from labor negotiations if there is a good chance the President will force both sides into binding arbitration.

On the New York Stock Exchange, shares of AMR Corp., American's corporate parent, fell $3.50 to $65.125. United's shares fell $2.50 to $136.50, and Delta Air Lines stock lost $1.50 to close at $57.50.

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