The three major unions representing employees at AMR Corp. (BB-/Watch Neg./--) unit American Airlines Inc. (BB-/Watch Neg./--) have agreed to enter into talks with management about pay and other concessions to lower the airline's costs and counter heavy losses. Standard&Poor's Ratings Services' ratings on both entities remain on CreditWatch with negative implications. The fairly rapid response and the cautiously cooperative tone of the three unions appears to reflect the clear severity of American's financial problems and the examples provided by the bankruptcies of competitors United Air Lines Inc. and US Airways Inc. Still, the talks are likely to be difficult, particularly on the question of whether any labor concessions will be temporary or permanent, and could take months.
